<PAGE> 1
As filed with the Securities and Exchange Commission on April 2, 1998
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
FREEDOM SECURITIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-3335712
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification Number)
ONE BEACON STREET
BOSTON, MA 02108
(Address of principal executive offices)
-------------------
FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED SAVINGS PLAN
PROFIT-SHARING RETIREMENT PLAN FOR EMPLOYEES OF SUTRO & CO. INCORPORATED
TUCKER ANTHONY INCORPORATED PROFIT SHARING RETIREMENT PLAN
(Full title of the plans)
-------------------
JOHN H. GOLDSMITH
CHIEF EXECUTIVE OFFICER
ONE BEACON STREET
BOSTON, MA 02108
(617) 725-2000
(Name, address and telephone number of agent for service)
Copies to:
KEVIN MCKAY, ESQ. HOWARD SCHNEIDER, ESQ.
GENERAL COUNSEL ROSENMAN & COLIN, LLP
FREEDOM SECURITIES CORPORATION 575 MADISON AVENUE
ONE BEACON STREET NEW YORK, NY 10022
BOSTON, MASSACHUSETTS 02108 (212) 940-8787
(617) 725-2000
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================
Title of Proposed maximum Proposed maximum Amount of
securities to Amount to be offering price aggregate offering registration
be registered registered per share (1) price (1) fee (1)
============================================================================================
<S> <C> <C> <C> <C>
Common Stock,
par value $.01
per share...... 3,000,000 $20.00 $60,000,000.00 $17,700
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plans described herein.
================================================================================
(1) Prior to its Registration Statement which became effective April 1,
1998, there has been no public market for the Common Stock. The initial
public offering price of the Common Stock on April 1, 1998 was $20.00
per share.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, or portions thereof, filed by the Company with
the Commission pursuant to the Rule 424(b) under the Securities Act of 1933 are
incorporated by reference in this Registration Statement:
a. The Company's Registration Statement on Form S-1
(Registration No. 333-44931), which became effective on April 1, 1998;
and
b. The information in respect of the Company's common stock,
$.01 par value (the "Common Stock") under the caption "Description of
Capital Stock" contained in the Company's Registration Statement on
Form S-1 (Registration No. 333-44931), which became effective on
April 1, 1998.
All documents subsequently filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment hereto indicating that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of this Registration Statement from the
respective dates of filings of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides as follows:
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorney's
fees), judgements, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and
2
<PAGE> 3
in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect to any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
In addition, pursuant to its Articles of Organization and Bylaws, the
Company shall indemnify its directors and officers against expenses (including
judgments or amounts paid in settlement) incurred in any action, civil or
criminal, to which any such person is a party by reason of any alleged act or
failure to act in his capacity as such, except as to a matter as to which such
director or officer shall have been finally adjudged not to have acted in good
faith in the reasonable belief that his action was in the best interest of the
corporation.
ITEM 8. EXHIBITS
Exhibit No. Description
3.1 Restated Articles of Organization (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form
S-1, Registration No. 333-44931, as amended).
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-1,
Registration No. 333-44931, as amended).
4.1 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form
S-1, Registration
3
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No. 333-44931, as amended).
*4.2 Freedom Capital Management Corporation Deferred Savings Plan,
as amended.
*4.3 Profit-Sharing Retirement Plan for Employees of Sutro & Co.
Incorporated, as amended.
*4.4 Tucker Anthony Incorporated Profit Sharing Retirement Plan, as
amended.
*5.1 Opinion of Rosenman & Colin LLP.
*5.2 Determination Letter of Internal Revenue Service re: Freedom
Capital Management Corporation Deferred Savings Plan.
*5.3 Determination Letter of Internal Revenue Service re
Profit-Sharing Retirement Plan for Employees of Sutro & Co.
Incorporated.
*5.4 Determination Letter of Internal Revenue Service re Tucker
Anthony Incorporated Profit Sharing Retirement Plan.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Rosenman & Colin LLP (included in Exhibit 5.1).
- ----------------------------------
* Filed herewith
ITEM 9. UNDERTAKINGS
1. The undersigned registrant hereby undertakes (a) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in this registration statement
or any material change to such information in this registration statement; (b)
that, for the purpose of determining any liability under the Securities Act of
1933 (the "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; and (c) 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.
2. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act and each filing of
an employee benefit plan's annual report pursuant to Section 15 (d) of the
Securities
4
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Exchange Act that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
3. The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
4. Insofar as indemnification for liabilities arising under the Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant 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 registrant 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 Act and
will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Boston, State of Massachusetts, on this 1st day of
April, 1998.
FREEDOM SECURITIES CORPORATION
By: /s/ John H. Goldsmith
--------------------------
John H. Goldsmith
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
/s/ John H. Goldsmith Chairman, Director April 1, 1998
- ----------------------------- and Chief Executive
John H. Goldsmith Officer as well as
Chief Executive
Officer of Tucker
Anthony and Chairman
of Sutro (Principal
Executive Officer)
/s/ William C. Dennis, Jr. Chief Financial April 1, 1998
- ----------------------------- Officer (Principal
William C. Dennis, Jr. Financial Officer)
Director April , 1998
- -----------------------------
David V. Harkins
/s/ C. Hunter Boll Director April 1, 1998
- -----------------------------
C. Hunter Boll
Director April , 1998
- -----------------------------
Thomas M. Hagerty
/s/ Seth W. Lawry Director April 1, 1998
- -----------------------------
Seth W. Lawry
/s/ Winston J. Churchill Director April 1, 1998
- -----------------------------
Winston J. Churchill
/s/ John F. Luikart Director April 1, 1998
- -----------------------------
John F. Luikart
/s/ Robert H. Yevich Director April 1, 1998
- -----------------------------
Robert H. Yevich
/s/ Gregory N. Thomas Director April 1, 1998
- -----------------------------
Gregory N. Thomas
6
<PAGE> 7
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plans) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, State of
Massachusetts on this 1st day of April, 1998.
Freedom Capital Management Corporation
Deferred Savings Plan
By: /s/ DEXTER A. DODGE
---------------------------------
Name: Dexter A. Dodge
Title: Trustee
7
<PAGE> 8
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plans) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Francisco, State of
California on this 1st day of April, 1998.
Profit-Sharing Retirement Plan for
Employees of Sutro & Co. Incorporated
By: /s/ WILLIAM J. HEAP
---------------------------------
Name: William J. Heap
Title: Administrator
8
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Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plans) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, State of
Massachusetts on this 1st day of April, 1998.
Tucker Anthony Incorporated Profit
Sharing Retirement Plan
By: /s/ JAMES S. FOSS
------------------------------
Name: James S. Foss
Title: Trustee
9
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EXHIBIT INDEX
Exhibit No. Description
3.1 Restated Articles of Organization (incorporated by reference to
Exhibit 3.1 to the Company's Registration Statement on Form
S-1, Registration No. 333-44931, as amended).
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-1,
Registration No. 333-44931, as amended).
4.1 Form of Common Stock Certificate (incorporated by reference to
Exhibit 4.1 to the Company's Registration Statement on Form
S-1, Registration No. 333-44931, as amended).
*4.2 Freedom Capital Management Corporation Deferred Savings Plan,
as amended.
*4.3 Profit-Sharing Retirement Plan for Employees of Sutro & Co.
Incorporated, as amended.
*4.4 Tucker Anthony Incorporated Profit Sharing Retirement Plan, as
amended.
*5.1 Opinion of Rosenman & Colin LLP.
*5.2 Determination Letter of Internal Revenue Service re Freedom
Capital Management Corporation Deferred Savings Plan
*5.3 Determination Letter of Internal Revenue Service re
Profit-Sharing Retirement Plan for employees of Sutro & Co.
Incorporated.
*5.4 Determination Letter of Internal Revenue Service re Tucker
Anthony Incorporated Profit Sharing Retirement Plan.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Rosenman & Colin LLP (included in Exhibit 5.1).
- ----------------------------------
* Filed herewith
<PAGE> 1
Exhibit 4.2
FREEDOM CAPITAL MANAGEMENT CORPORATION
DEFERRED SAVINGS PLAN
AND TRUST AGREEMENT
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
Introduction............................................................. 2
1.01 Creation of Trust......................................... 2
1.02 Interpretation of Trust Agreement......................... 2
ARTICLE II
Definitions.............................................................. 3
2.01 "Affiliated Company"...................................... 3
2.02 "Agreement"............................................... 3
2.03 "Anniversary Date"........................................ 3
2.04 "Basic Contributions"..................................... 3
2.05 "Beneficiary"............................................. 3
2.06 "Board of Directors"...................................... 4
2.07 "Committee"............................................... 4
2.08 "Company"................................................. 4
2.09 "Compensation"............................................ 4
2.10 "Eligible Employee"....................................... 5
2.11 "Employee"................................................ 5
2.12 "Employment Commencement Date"............................ 5
2.13 "Family Member"........................................... 5
2.14 "Highly Compensated Employee"............................. 5
2.15 "Hour of Service"......................................... 7
2.16 "Investment Fund" or "Investment Funds"................... 8
2.17 "Matching Contributions".................................. 8
2.18 "Net Earnings"............................................ 9
2.19 "Normal Retirement Age"................................... 9
2.20 "Participant"............................................. 9
2.21 "Period of Service"....................................... 9
2.22 "Period of Severance"..................................... 9
2.23 "Plan".................................................... 9
2.24 "Plan Year"............................................... 9
2.25 "Reemployment Commencement Date".......................... 9
2.26 "Salary Reduction Agreement".............................. 10
2.27 "Severance from Service Date"............................. 10
2.28 "Trust"................................................... 10
2.29 "Trustees"................................................ 10
2.30 "Valuation Date".......................................... 10
(i)
<PAGE> 3
Page
ARTICLE III
Participation............................................................ 11
3.01 Eligibility for Participation............................. 11
3.02 Determination of Eligibility by Committee................. 11
3.03 Duration of Eligibility................................... 11
3.04 Salary Reduction Agreement................................ 11
ARTICLE IV
Contributions Under the Plan............................................. 13
4.01 Basic Contributions....................................... 13
4.02 Matching Contributions.................................... 13
4.03 Payment of Contributions.................................. 14
4.04 Reversion of Certain Contributions Made by the Company.... 15
4.05 Participant Contributions................................. 15
4.06 Rollover Contributions.................................... 15
ARTICLE V
Participants' Accounts; Allocation of Assets and Contributions;
Participants' Investment Elections.................................... 17
5.01 Participants' Accounts.................................... 17
5.02 Allocation of Basic Contributions......................... 17
5.03 Allocation of Matching Contributions
(Including Forfeitures)................................... 18
5.04 Allocation of Rollover Contributions...................... 18
5.05 Valuation and Allocation of Assets........................ 18
5.06 Distributions and Forfeitures............................. 19
5.07 Election of Investments................................... 20
ARTICLE VI
Limitations on Contributions and Allocations............................. 22
6.01 Contributions to be Deductible............................ 22
6.02 Limitation on Basic Contributions......................... 22
6.03 Return of Excess Deferrals................................ 25
6.04 Limitation on Matching Contributions...................... 26
6.05 Limitations on Allocations................................ 29
6.06 Contributions from Net Earnings........................... 30
ARTICLE VII
Payments to or for the Account of Participants or Terminated Participants 31
7.01 Restrictions on Payments and Distributions................ 31
7.02 Retirement................................................ 31
7.03 Disability Retirement..................................... 31
7.04 Death Benefits............................................ 32
7.05 Termination of Employment Prior to Retirement or Death.... 34
(ii)
<PAGE> 4
Page
7.06 Reemployment............................................... 35
7.07 Methods of Payment......................................... 35
7.08 Restrictions on Method and Timing of Payment............... 36
7.09 Withdrawals During Employment.............................. 38
7.10 Loans to Members........................................... 40
7.11 Discharge of Trustees' Obligation to Make Payments......... 42
7.12 Direct Rollovers........................................... 42
ARTICLE VIII
Amendment and Termination................................................. 45
8.01 Right to Amend or Terminate................................ 45
8.02 Amendment for Tax Exemption................................ 45
8.03 Liquidation of Trust in Event of Termination............... 45
8.04 Termination of Plan and Trust.............................. 46
ARTICLE IX
Administration of the Plan................................................ 47
9.01 Named Fiduciaries.......................................... 47
9.02 Appointment of Committee................................... 48
9.03 Powers of Committee........................................ 49
9.04 Action by Committee........................................ 49
9.05 Discretionary Action....................................... 50
9.06 Evidence on Which Committee May Act........................ 50
9.07 Employment of Agents....................................... 50
9.08 Compensation and Expense of Committee...................... 51
9.09 Indemnification of Committee Members....................... 51
ARTICLE X
The Trustees.............................................................. 52
10.01 Powers of Trustees........................................ 52
10.02 Investments............................................... 52
10.03 Method of Holding, Buying, and Selling Securities......... 53
10.04 Exercise of Rights........................................ 53
10.05 Reliance on Trustees as Owners............................ 54
10.06 Liquidation of Assets..................................... 55
10.07 Direction by Committee.................................... 55
10.08 Records and Accounting.................................... 55
10.09 Payment of Taxes.......................................... 56
10.10 Trustees' Compensation and Expenses....................... 57
10.11 Resignation or Removal of Trustees........................ 58
10.12 Appointment of Investment Managers........................ 58
10.13 Indemnification of Trustees............................... 60
(iii)
<PAGE> 5
Page
ARTICLE XI
The Company............................................................... 61
11.01 No Contract of Employment................................. 61
11.02 No Contract to Maintain Plan.............................. 61
11.03 Liability of the Company.................................. 61
11.04 Action by the Company..................................... 62
11.05 Successor to Business of the Company...................... 62
11.06 Dissolution of the Company................................ 62
ARTICLE XII
Additional Participating Companies........................................ 64
12.01 Participation............................................. 64
12.02 Effective Date............................................ 64
12.03 Administration............................................ 64
12.04 Termination............................................... 64
ARTICLE XIII
Top-Heavy Provisions...................................................... 66
13.01 General Rule.............................................. 66
13.02 Minimum Contribution Provisions........................... 66
13.03 Top-Heavy Plan Definition................................. 67
13.04 Key Employee.............................................. 69
13.05 Non-Key Employee.......................................... 70
13.06 Limitation on Contributions............................... 70
ARTICLE XIV
Miscellaneous............................................................. 71
14.01 Spendthrift Provision..................................... 71
14.02 Appointment of Person to Receive Payment.................. 71
14.03 Construction.............................................. 72
14.04 Impossibility of Performance.............................. 72
14.05 Definition of Words....................................... 72
14.06 Titles.................................................... 72
14.07 Merger or Consolidation................................... 72
14.08 Claims Procedure.......................................... 73
14.09 Special Provisions for Certain Leased Employees........... 73
14.10 Effective Date of Amendment and Restatement............... 74
14.11 Execution of Agreement.................................... 74
(iv)
<PAGE> 6
FREEDOM CAPITAL MANAGEMENT CORPORATION
DEFERRED SAVINGS PLAN
AND TRUST AGREEMENT
This Trust Agreement is made as of the 1st day of January, 1989, by and
between FREEDOM CAPITAL MANAGEMENT CORPORATION, a Massachusetts corporation
having its principal places of business in Boston, Massachusetts (hereinafter
called the "Company"), and Edward W. Weld, Dexter A. Dodge, Jr. and David L.
Richardson, Jr. (hereinafter called the "Trustees").
WITNESSETH THAT:
WHEREAS the Company recognized the contribution being made to the
successful operation of its business by its employees and desired to reward such
contribution and therefore established a profit sharing plan and trust entitled
"Tucker Anthony Management Corporation Deferred Savings Plan and Trust
Agreement" which has been subsequently amended from time to time; and
WHEREAS the Company now desires to amend and restate said profit
sharing plan and trust in its entirety to comply with the Tax Reform Act of 1986
and other relevant legislative and regulatory changes, and to rename said profit
sharing plan and trust as the "Freedom Capital Management Corporation Deferred
Savings Plan and Trust Agreement" and to make various other changes thereto;
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NOW, THEREFORE, the Company and the Trustees, each in consideration of
the covenants, agreements, and declarations of the other, mutually covenant,
agree, and declare as follows:
2
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ARTICLE I
Introduction
1.01 Creation of Trust. There has been hereby established a trust known
as the "FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED SAVINGS TRUST" (formerly
known as the "Tucker Anthony Management Corporation Deferred Savings Trust
Agreement") (the "Trust"). The Trustees shall receive any contributions paid to
the Trust and all contributions so received, together with the income therefrom,
shall be held, managed, and administered as a fund in trust pursuant to the
terms of this Agreement. The Trustees hereby confirm their acceptance of the
Trust created hereunder and agree to perform the provisions of this Agreement on
their part to be performed.
1.02 Interpretation of Trust Agreement. The Trust is established for
the exclusive benefit of Eligible Employees and their Beneficiaries. So far as
possible, this Agreement shall be interpreted in a manner consistent with this
intent and with the intent of the Company that the Trust established hereunder
shall continue to be a profit sharing plan and to satisfy those provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA") and of the
Internal Revenue Code of 1986 (the "Code") relating to exempt employees' trusts,
as either of them may from time to time be amended. Except as otherwise provided
in Section 4.04 hereof, under no circumstances shall any property, whether
corpus or income of the Trust hereunder, or any funds contributed to the Trust,
ever revert to or be used or enjoyed by the Company or be used for any purpose
other than for the exclusive benefit of the eligible Employees or their
Beneficiaries.
3
<PAGE> 9
ARTICLE II
Definitions
Whenever used in this Agreement, unless the context clearly indicates
otherwise, the following words shall have the following meanings:
2.01 "Affiliated Company" means (a) a corporation which, together with
the Company, is a member of a controlled group of corporations (as defined in
Section 414(b) of the Code), (b) a trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of the
Code) with the Company, (c) a corporation, partnership, or other entity which,
together with the Company, is a member of an affiliated service group (as
defined in Section 414(m) of the Code), or (d) any entity required to be
aggregated with the Company under Section 414(o) of the Code.
2.02 "Agreement" means this Agreement, as amended from time to time.
2.03 "Anniversary Date" means December 31 in each year.
2.04 "Basic Contributions" means the contributions made by the Company
pursuant to Section 4.01 of the Plan either in consideration of a Participant's
agreement to reduce his cash Compensation by a comparable amount pursuant to a
Salary Reduction Agreement or as a special Basic Contribution designed to cause
the test in Section 6.02(a)(i) or (ii) to be satisfied.
2.05 "Beneficiary" means the person or persons designated by a
Participant, pursuant to the provisions of Section 7.04 of this Agreement, to
receive distribution of such Participant's share upon his death, and includes a
co-beneficiary or a contingent beneficiary. The term "Beneficiary" also includes
a Participant's surviving spouse if such spouse is deemed to be such
Participant's Beneficiary pursuant to section 7.04.
4
<PAGE> 10
2.06 "Board of Directors" means the board of directors of the Company
in office from time to time or the Executive Committee of such board, with
respect to such powers as have been delegated to it by the Board.
2.07 "Committee" means the Administrative Committee constituted under
Article IX of this Agreement in office from time to time.
2.08 "Company" means Freedom Capital Management Corporation and also
means any successor to all or a major portion of its business which adopts this
Plan and Trust pursuant to Section 11.05.
2.09 "Compensation" of an Eligible Employee means the total salary and
wages paid by the Company to such Eligible Employee during the Plan Year while
such Eligible Employee is, or is eligible to be, an active Participant in the
Plan. Notwithstanding the foregoing, (i) Compensation shall include all amounts
which would have been paid to such Eligible Employee as Compensation but for an
election by such Eligible Employee under Section 125 or 401(k) of the Code, (ii)
Compensation shall not include contributions made by the Company to any other
benefit plan or any other form of compensation and (iii) an Eligible Employee's
Compensation for any Plan Year (A) shall not exceed $200,000 (subject to
cost-of-living adjustments made by the Secretary of Treasury or his delegate)
for any Plan Year commencing on or after January 1, 1989 and (B) shall not
exceed $150,000 (subject to cost-of-living adjustments made by the Secretary of
Treasury or his delegate) for any Plan Year commencing on or after January 1,
1994. In determining the Compensation of an Eligible Employee for purposes of
the limitations described in section (iii) of the preceding sentence for any
Plan Year, the rules of Section 414(q)(6) of the Code shall apply, except that
in applying such rules,
5
<PAGE> 11
the term "family" shall include only the spouse of the Eligible Employee and any
lineal descendants of the Eligible Employee who have not attained age nineteen
(19) before the close of such Plan Year. If the application of those rules
causes the adjusted dollar limitation to be exceeded, then the limitation shall
be prorated among the affected Eligible Employees in proportion to their
Compensation as determined under this Section 2.09 before the application of the
limitation.
2.10 "Eligible Employee" means any Employee who is employed on a
regular full-time basis whose customary work schedule is at least 1,000 Hour of
Service annually.
2.11 "Employee" means any person who is employed by the Company. An
Employee's employment shall be deemed to have commenced on the date on which he
first performs an Hour of Service as an Employee.
2.12 "Employment Commencement Date" means the first date on which an
individual performs an Hour of Service.
2.13 "Family Member" includes the spouse, lineal ascendants and
descendants of an Employee or former Employee and the spouses of such lineal
ascendants and descendants.
2.14 "Highly Compensated Employee" means either a highly compensated
active employee or a highly compensated former employee.
A highly compensated active employee means any Employee who performs
service for the Company during the "determination year" and who, during the
"look-back year": (i) received Compensation from the Company in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code); (ii) received
Compensation from the Company in excess of $50,000 (as adjusted pursuant to
Section 415(d) of the Code) and was a member of the "top-
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paid group" for such year; or (iii) was an officer of the Company and received
Compensation during such year that is greater than 50 percent of the dollar
limitation then in effect under Section 415(b)(1)(A) of the Code. The term
Highly Compensated Employee also includes: (i) each Employee who is both
described in the preceding sentence if the term "determination year" is
substituted for the term "look-back year" and one of the one hundred (100)
Employees who received the most Compensation from the Company during the
determination year; and (ii) each Employee who is a 5-percent owner at any time
during the look-back year or determination year.
If no officer has satisfied the compensation requirement of (iii) above
during either the determination year or look-back year, the highest paid officer
for either such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year. The top-paid group for any Plan Year shall be the group of
Employees consisting of the top twenty percent (20%) of the Employees when
ranked on the basis of Compensation paid during such Plan Year.
A highly compensated former employee includes any Employee who
separated (or was deemed to have separated) from service prior to the
determination year, performs no service for the Company during the determination
year, and was a highly compensated active employee for either the separation
year or any determination year ending on or after the Employee's 55th birthday.
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If an Employee is, during a determination year or look-back year, a
Family Member of either a 5-percent owner who is an active or former Employee or
a Highly Compensated Employee who is one of the top ten (10) Highly Compensated
Employees ranked on the basis of Compensation paid by the Company during such
year, then the Family Member and the 5-percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the Family Member and
5-percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the Family
Member and 5-percent owner or top-ten Highly Compensated Employee.
The determination of who is a Highly Compensated Employee, including
the determination of the number and identity of Employees in the top-paid group,
the top one hundred (100) Employees, the number of Employees treated as officers
and the Compensation that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
2.15 "Hour of Service" means:
(a) Each hour for which an employee is directly or indirectly paid
or entitled to payment by the Company or an Affiliated Company for the
performance of duties. These hours shall be credited to the employee for the
Plan Year(s) in which the duties are performed; and
(b) Each hour for which an employee is directly or indirectly paid
or entitled to payment by the Company or an Affiliated Company on account of a
period of time during which no duties are performed (irrespective of whether the
employment relationship has
8
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terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty or other similar reason. These hours shall be
calculated and credited pursuant to Section 2530.200b-2 of the Department of
Labor Regulations which are incorporated herein by reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Company or an Affiliated
Company. The same hours shall not be credited under both paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These hours
shall be credited to the employee for the Plan Year(s) to which the award or
agreement pertains rather than the Plan Year in which the award, agreement, or
payment is made; and
(d) each hour credited, at the rate of forty (40) hours per week
for each week involved, for the following periods of time:
(i) Unpaid periods of absence authorized by the Company in
accordance with standard personnel policies of the Company, provided
the Employee returns to employment with the Company immediately upon
the expiration of such authorized absence.
(ii) Unpaid military leave while the Employee's reemployment
rights are protected by law, provided the Employee returns to
employment with the Company within the period prescribed by law.
2.16 "Investment Fund" or "Investment Funds" means one or more of the
funds established by the Committee for the investment of Plan assets, as more
fully described in Section 5.08.
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2.17 "Matching Contributions" means the contributions made by the
Company pursuant to Section 4.02. In addition, for purposes of Section 6.04,
"Matching Contributions", shall include any Matching Contributions and "optional
contributions" made under the Plan in respect to Plan Years commencing prior to
January 1, 1989.
2.18 "Net Earnings" for any Plan Year shall mean the net pre-tax income
of the Company, before deductions of contributions under this Plan, as is
determined under generally accepted accounting principles.
2.19 "Normal Retirement Age" means age sixty-five (65).
2.20 "Participant" means an Employee who is eligible to participate in
the Plan as determined under Article III of the Plan.
2.21 "Period of Service" means, with respect to each Employee, the sum
of all periods of time, expressed in years and fractions of years based on days,
which commence on an Employee's Employment Commencement Date or Reemployment
Commencement Date and end on the date the Period of Service is to be determined,
but excluding any Period of Severance of one year or more.
2.22 "Period of Severance" means the period of time, expressed in years
and fractions of years based on days, which commences on the Employee's
Severance from Service Date and ends on the date on which the Employee next
completes an Hour of Service.
2.23 "Plan" means the "FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED
SAVINGS PLAN" as set forth herein, together with any and all amendments hereto.
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2.24 "Plan Year" means the fiscal year of the Trust, being the twelve
(12) months ending on each Anniversary Date.
2.25 "Reemployment Commencement Date" means the first day of the
calendar month in which the Employee performs an Hour of Service following a
Period of Severance which is not counted as a Period of Service.
2.26 "Salary Reduction Agreement" means the agreement entered into
between the Company and an Employee pursuant to the provisions of Section 3.04.
2.27 "Severance from Service Date" means the earliest of (a) the date
on which an Employee dies or quits, is discharged, or retires from the Company
or an Affiliated Company, (b) the first anniversary of the first date of a
period in which an Employee remains absent from service with the Company or an
Affiliated Company for any reason other than voluntary termination, retirement,
discharge, or death, including but not limited to, vacation, holiday, sickness,
disability, and approved leave of absence or layoff, or (c) solely for purposes
of Section 7.05(c), the second anniversary of the first date of a period in
which an Employee is absent because of a Maternity/Paternity Leave of Absence.
An Employee who has a suspension of employment of less than one year, or a
layoff not exceeding one year, will be deemed not to have quit or been
discharged if he returns to active employment with the Company or an Affiliated
Company at the end of such suspension or layoff. If a suspension of employment
or layoff exceeds one year, the Employee will be deemed to have quit or been
discharged at the end of such period.
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2.28 "Trust" means the trust fund created by this Agreement, including
all Investment Funds, and held by the Trustees hereunder, into which all
contributions and income thereon shall be paid and out of which all payments and
distributions shall be made.
2.29 "Trustees" means the individuals named herein as trustees and any
duly appointed successor trustee or trustees.
2.30 "Valuation Date" means such Anniversary Date and each other date
which the Committee in its sole discretion selects for the revaluation of the
Investment Funds.
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ARTICLE III
Participation
3.01 Eligibility for Participation. Each Eligible Employee who was a
Participant on December 31, 1988 shall continue to be a Participant on January
1, 1989, provided he is still an Eligible Employee on that date. Each other
Employee, including each Employee hired on or after January 1, 1989, shall be
eligible to become a Participant under the Plan on the first day he becomes an
Eligible Employee.
3.02 Determination of Eligibility by Committee. The determination of an
Employee's eligibility for membership under the Plan shall be made by the
Committee from the Company's records, and the Committee's decisions on these
matters shall be conclusive and binding upon all persons.
3.03 Duration of Eligibility. A Participant shall continue as an active
Participant until the earlier of (i) his termination of employment with the
Company, and (ii) the date he ceases to be an Eligible Employee, and except as
otherwise specifically provided herein, shall cease to be an active Participant
entitled to share in contributions hereunder upon such date. To the extent a
former Participant's accounts have not been fully distributed, such former
Participant shall be treated as a Participant for purposes of applying the
provisions of the Plan to such accounts. A former Participant shall be eligible
to become an active Participant under the Plan on the date he again becomes an
Eligible Employee.
3.04 Salary Reduction Agreement. Each Eligible Employee who is not an
active Participant may, but shall not be required to, elect to become a
Participant by entering into a Salary Reduction Agreement with the Company. The
terms of any such Salary Reduction
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Agreement shall provide that such Participant agrees to accept a reduction in
cash Compensation from the Company, in an amount equal to any whole number
percentage of his Compensation, in consideration of the Company's agreement to
contribute an equal amount into the Trust on his behalf; provided, such salary
reduction percentage shall not exceed fifteen percent (15%); and provided
further, such reduction shall not exceed $7,000 (or such greater dollar amount
as may be established from time to time by the Secretary of the Treasury under
Section 402(g) of the Code) in any calendar year. Such maximum percentage may be
increased or decreased at the discretion of the Board of Directors for any Plan
Year by a resolution adopted prior to the beginning of such Plan Year.
A Participant's Salary Reduction Agreement shall become effective on
such Participant's first pay period in the month which begins not less than
fifteen (15) days (or such shorter period as the Committee allows) after the
delivery of such Salary Reduction Agreement to the Company.
A Participant may elect to increase or decrease the percentage rate of
his salary reduction effective only as of the first day of January or July
during a Plan Year. Each such increase, decrease or suspension shall be made by
written notice filed with the Committee and shall be effective as soon as
practicable after such notice is filed with the Committee. A Participant may
completely suspend his salary reduction election at any time. A Participant may
recommence his salary reduction election effective as of the first day of any
payroll period by submitting a written election to the Committee. No change in
the percentage of a Participant's salary reduction shall be made at any other
time by the Participant and the salary
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reduction percentage in force at any time shall continue in force unless and
until changed in accordance with the provisions of the preceding sentences.
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<PAGE> 21
ARTICLE IV
Contributions Under the Plan
4.01 Basic Contributions. For each month, the Company shall make a
Basic Contribution to the Trust on behalf of each Participant who has entered
into a Salary Reduction Agreement equal to the amount specified in said Salary
Reduction Agreement. In addition to the Basic Contributions made by the Company
pursuant to the preceding sentence, the Company may, in order to cause the test
in Section 6.02(a)(i) or (ii) to be satisfied for a Plan Year, make a special
Basic Contribution to the Trust for such Plan Year, which special Basic
Contribution shall be in an amount determined by the Company in its sole
discretion and shall be allocated for the benefit of all Participants who are
employed on the Anniversary Date of such Plan Year and are not Highly
Compensated Employees either (i) in proportion to each such Participant's
Compensation for such Plan Year or (ii) in equal dollar amounts on a per capita
basis, as shall be designated by the Company at the time such special Basic
Contribution is made. Notwithstanding anything hereinabove to the contrary,
Basic Contributions shall be subject to the limitations described in Article VI
of the Plan.
4.02 Matching Contributions. For each Plan Year, the Company shall make
a Matching Contribution to the Trust under the Plan for each Participant who
made Basic Contributions during any part of such Plan Year, equal to one hundred
percent (100%) of the Participant's Basic Contributions made during such Plan
Year (excluding any special Basic Contribution made during such Plan Year
pursuant to the second sentence of Section 4.01); provided, however, that the
Matching Contribution made by the Company under this Section 4.02 on behalf of
any Participant for any Plan Year shall not exceed two percent (2%) of such
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Participant's Compensation for such Plan Year. A Participant shall be eligible
for the Matching Contribution provided by this Section 4.02 if, and only if,
such Participant is an Employee on the Anniversary Date of such Plan Year.
The rate of Matching Contributions made under this Section 4.02 may be
increased or decreased at the discretion of the Board of Directors; provided
that no such adjustment may be made which would reduce the rate of Matching
Contributions without at least thirty (30) days prior written notice to all
Participants.
Notwithstanding the foregoing, the Company may, in order to cause the
test in Section 6.04(a)(i) or (ii) to be satisfied for a Plan Year, increase the
maximum percentage of a Participant's Compensation which it will contribute as a
Matching Contribution pursuant to this Section 4.02 on behalf of all
Participants who are employed on the Anniversary Date of such Plan Year and are
not Highly Compensated Employees.
4.03 Payment of Contributions.
(a) The Basic Contributions made by the Company on behalf of each
Participant with respect to each month shall be paid into the Trust by the
Company not later than thirty (30) days after the last day of such month and
deposited in the Investment Funds in the proportions designated by the election
of such Participant under Section 5.07 of the Plan. The special Basic
Contributions, if any, made by the Company pursuant to the second sentence of
Section 4.01 for any Plan Year shall be paid into the Trust not later than the
date required for such contributions to be deductible for Federal Income Tax
purposes for said Plan Year and deposited in the Investment Funds in the
proportion designated by the election of the Participant under Section 5.07 of
the Plan
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(b) The Matching Contributions made by the Company on behalf of
each Participant with respect to each Plan Year shall be paid into the Trust not
later than the date required for such contributions to be deductible for Federal
income tax purposes for such Plan Year and deposited in the Investment Funds in
the proportions designated by the election of such Participant under Section
5.07 of the Plan.
4.04 Reversion of Certain Contributions Made by the Company. All Basic
and Matching Contributions made pursuant to Sections 4.01 and 4.02 shall be made
upon the condition that such contributions are fully deductible for Federal
income tax purposes. In the event that any such deduction is disallowed in whole
or in part, then the Company may direct the Trustees to return the amount of
such contributions (to the extent disallowed) (decreased by losses attributable
to such amount, but not including any earnings attributable to such amount) to
the Company at any time within the twelve-month period commencing on the date of
disallowance. In the event that the Company shall make Basic and/or Matching
Contributions pursuant to Section 4.01 or 4.02 on the basis of a mistake of
fact, the Company may direct the Trustees to return the amount of such
contributions (decreased by losses attributable to such amount, but not
including any earnings attributable to such amount) to the Company at any time
within the twelve-month period commencing on the date of contribution. In no
event shall the return of a contribution hereunder cause any Participant's
accounts to be returned to less than they would have been had the nondeductible
or mistaken amount not been contributed.
4.05 Participant Contributions. No Participant contributions are
required or permitted under the Plan.
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4.06 Rollover Contributions. Notwithstanding anything to the contrary
elsewhere herein, any Participant may make contributions of all or any part of
(i) any amount received by such Participant from another plan and trust
qualified as an exempt employee benefit plan and trust under Sections 401(a) and
501(a) of the Code which constitutes, prior to January 1, 1993, a "qualified
total distribution" (within the meaning of Section 402(a)(5)(E)(i) of the Code),
or, after December 31, 1992, an "eligible rollover distribution" (within the
meaning of Section 401(a)(31) of the Code) or (ii) any amount received by such
Participant out of an individual retirement account which consists of a prior
rollover contribution from a qualified employee benefit plan which would have
constituted a qualified total distribution or an eligible rollover distribution,
whichever is applicable, and which, in any case, but for such contribution to
the Plan, would have been taxable income to such Participant.
(b) Contributions and transfers under this Section 4.07 shall be
paid to the Trustees in cash or such other form of property as is acceptable to
the Trustees and as is necessary to avoid imposition of tax on the distribution
and shall be credited to a separate book account maintained for such individual
under the Plan, which account shall be known as his "Rollover Account." A
Participant's Rollover Account shall be nonforfeitable at all times.
(c) Contributions made by a Participant pursuant to this Section
4.07 shall be disregarded in applying the limitations set forth in Article VI.
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ARTICLE V
Participants' Accounts;
Allocation of Assets and Contributions;
Participants' Investment Elections
5.01 Participants' Accounts. The Committee shall maintain the following
accounts for each Participant under the Plan: (a) a Basic Account to which Basic
Contributions made by the Company for the benefit of such Participant shall be
credited along with any matching contributions and optional contributions made
under the Plan in respect to Plan Years commencing before January 1, 1989; (b) a
Matching Account to which Matching Contributions made by the Company in respect
to Plan Years commencing after December 31, 1988 for the benefit of such
Participant shall be credited; and (c) a Rollover Account to which rollover
contributions made by the Participant pursuant to Section 4.06 shall be
credited. The rights of each Participant to the amounts allocated to his Basic
and Rollover Accounts shall be fully vested and nonforfeitable at all times.
5.02 Allocation of Basic Contributions. At the time of payment of any
Basic Contributions to the Trust (including any special Basic Contributions made
pursuant to the second sentence of Section 4.01), the Company shall deliver to
the Committee a schedule showing the name of each Participant and the amount of
Basic Contributions made on his behalf. The schedule shall also contain such
other information as the Committee may reasonably require for the proper
administration of the Plan. Upon receiving all such schedules with respect to
any period ending on a Valuation Date and after the account balances of the
Participants have been adjusted as provided in Section 5.05, the Committee shall
credit
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to the Basic Account of each Participant listed on such schedules the amount of
Basic Contributions made to the Trust on his behalf as shown therein.
5.03 Allocation of Matching Contributions (Including Forfeitures). As
soon as practicable after the end of each Plan Year, the Company shall deliver
to the Committee a schedule showing the name of each Participant who (a) was an
Employee of the Company on the Anniversary Date of such Plan Year, or (b) died,
retired on or after Normal Retirement Age or became disabled (within the meaning
of Section 7.03) during such Plan Year and the amount of Matching Contributions
(including forfeitures) made on his behalf pursuant to Section 4.02. The
schedule shall also contain such other information as the Committee may
reasonably require for the proper administration of the Plan. Upon receiving
such schedule with respect to a Plan Year and after the account balances of the
Participants have been adjusted as of such Anniversary Date as provided in
Section 5.05, the Committee shall credit to the Matching Account of each
Participant listed on such schedule the amount of the Matching Contribution
(including forfeitures) made to the Trust on his behalf as shown therein.
5.04 Allocation of Rollover Contributions. After the receipt of any
rollover contribution made by a Participant and after the account balances of
the Participants have been adjusted as provided in Section 5.05, the Committee
shall credit such rollover contribution to such Participant's Rollover Account
as of the Valuation Date coincident with or next following the receipt of such
rollover contribution.
5.05 Valuation and Allocation of Assets. The Investment Funds shall be
valued by the Trustees, as of each Valuation Date, according to such methods as
the Trustees may reasonably
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select in order to determine the fair market value of the assets of each such
Fund. As of each Valuation Date, each account maintained under the direction of
the Committee shall be adjusted to reflect the effect of income collected and
accrued, realized and unrealized profit and losses, expenses, and all other
transactions during the applicable period. All expenses of the Trust which are
allocable to a Participant account or Investment Fund shall be charged to such
account or Investment Fund. All such expenses allocable to an Investment Fund
shall be charged against all Participant accounts in the same proportion as the
amount credited to such Participant account and invested in such Investment Fund
bears to the total amount invested in such Investment Fund. All such expenses
allocable to a Participant account will be charged against the interest of such
account invested in each Investment Fund in the same proportion as each such
interest bears to the total value of the account. Such valuations and
adjustments of the Participants' accounts shall be made so as to preserve for
each account of each Participant its beneficial interest in each of the
Investment Funds. The value of a Participant account as of any Valuation Date
shall be the sum of the interests of the Participant account invested in each
Investment Fund as of the Valuation Date for each such Investment Fund which is
coincident with or immediately preceding the Valuation Date as of which the
Participant account is being valued.
5.06 Distributions and Forfeitures. Whenever the Trustees shall make
any distribution to or in behalf of a Participant in accordance with the
provisions of Article VII or whenever a Participant shall forfeit all or any
portion of his Matching Account in accordance with the provisions of Section
7.05, such Participant's accounts shall be charged with the amount of such
distribution or forfeiture. In the event of any distribution or forfeiture of
less than the full
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amount standing to the credit of a Participant's accounts, the amount charged
against such Participant's accounts shall be charged against such Participant's
interest in the Investment Funds in accordance with administrative policies
established by the Committee, or in the absence of any such policy, on a pro
rata basis. All distributions and forfeitures shall be based upon the value of
the Participant's accounts determined as of the Valuation Date next preceding
such distribution. The accounts of any Participant shall continue to be
maintained under the Plan and shall continue to share in the allocation of
income, gain, losses, appreciation, and depreciation of assets pursuant to
Section 5.05 until such accounts have been fully distributed.
5.07 Election of Investments.
(a) Each Participant shall have the right to elect the manner of
investment of the amounts standing to the credit of his accounts among the
Investment Funds established under the Trust. By such election, the Participant
shall direct the portion (in whole percentages) of the aggregate amount then
credited, and/or thereafter to be credited, to his accounts which is to be
invested by the Trustees in each of the Investment Funds. The Committee shall
maintain records of account at all times adequately reflecting each
Participant's interest in each of the Investment Funds. The Committee may
establish such procedures, forms, minimum investment amounts or other
limitations with respect to investment elections, as it may deem necessary or
advisable for the orderly administration of the Plan.
(b) Each Participant may, at such time or times and in such manner
as the Committee determines on a uniform basis for all Participants, elect to
change his investment
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election with respect to future contributions credited to any of such
Participant's accounts as well as amounts already credited to such accounts. In
the event that such a new election causes a transfer of assets from one
Investment Fund to another, the transfer shall be made by the Trustees as soon
as reasonably possible thereafter.
(c) Any investment election made hereunder shall continue to be
effective until properly revoked by the Participant. If, at any time, there
shall be no investment election in effect with respect to a Participant, the
Committee shall direct the Trustees to invest all amounts contributed in respect
of such Participant in such one or more of the Investment Funds as the Committee
shall, in its sole discretion, select on a uniform basis for all such
Participants.
(d) The Company, the Committee and the Trustees shall have no
responsibility for the investment elections of the Participants and shall incur
no liability on account of investing the assets of the Trust in accordance with
such directions.
(e) For purposes of this Section 5.08, all references to a
Participant shall include a former Participant and the Beneficiary of a deceased
Participant to the extent that such former Participant or Beneficiary has an
interest under the Trust.
(f) To make or change an investment election, each Participant
shall give notice to the Committee, by use of the investment direction system
maintained for such purposes by the Committee or its agent. To be effective,
such an investment election must be in accordance with any and all rules and
regulations established by the Committee for this purpose. Any direction made by
a Participant using the investment direction system
24
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maintained by the Committee or its agent shall be treated as a direction made
pursuant to Section 404(c) of ERISA.
25
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ARTICLE VI
Limitations on Contributions
and Allocations
6.01 Contributions to be Deductible. Basic Contributions and Matching
Contributions under the Plan with respect to a Plan Year shall not exceed that
amount which, when added to the contributions made by the Company for that Plan
Year to all other qualified pension or profit sharing plans maintained by the
Company, equals the maximum amount allowable as a deduction by the Company
pursuant to Section 404 of the Code with respect to such Plan Year.
6.02 Limitation on Basic Contributions.
(a) At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Basic Contributions with respect to
any Participant if the Committee determines that such suspension or reduction is
necessary to cause the test in either (i) or (ii) below to be met with respect
to the amount of Basic Contributions for such Plan Year:
(i) the Actual Deferral Percentage for the Highly
Compensated Employees who are eligible for Basic Contributions is not
more than the Actual Deferral Percentage for all other Employees who
are eligible for Basic Contributions multiplied by 1.25; or
(ii) The excess of the Actual Deferral Percentage for the
Highly Compensated Employees who are eligible for Basic Contributions
over the Actual Deferral Percentage for
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all other Employees who are eligible for Basic Contributions is not
more than two (2) percentage points, and the Actual Deferral Percentage
for the Highly Compensated Employees who are eligible for Basic
Contributions is not more than the Actual Deferral Percentage for all
other Employees who are eligible for Basic Contributions multiplied by
two (2).
For the purposes of this subsection (a), "Actual Deferral Percentage"
for a specified group of Employees for a Plan Year shall be the average of the
ratios (calculated separately for each Employee in such group) of (A) the amount
of Basic Contributions actually paid over to the Trust on behalf of the Employee
for such Plan Year to (B) the Employee's Compensation for the Plan Year. In
determining the deferral percentage of a Highly Compensated Employee described
in Section 414(q)(6)(A) of the Code who has a Family Member, the Basic
Contribution made on behalf of such Highly Compensated Employee and the
Compensation of such Highly Compensated Employee shall include the Basic
Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Participant for purposes of
determining the Actual Deferral Percentage for any group under the Plan to the
extent required by Sections 414(q) and 401(a)(17) of the Code and any
regulations promulgated thereunder, and any reduction required pursuant to
subsection (b) below shall be allocated among the Highly Compensated Employee
and his Family Member(s) in proportion to the Basic Contributions of each such
individual.
(b) If, for any Plan Year, the Committee determines that the Basic
Contributions made on behalf of Highly Compensated Employees exceed the
limitation set forth in subsection (a) above, the Committee shall direct the
Trustees to reduce the Basic
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Contributions of the Highly Compensated Employees in order of their deferral
percentages, beginning with the highest of such percentages, to the extent
necessary to cause the Plan to meet the limitation set forth in subsection (a)
above. Any Basic Contributions so reduced, together with the income or loss
allocable thereto (determined in accordance with Section 6.02(c) below) shall be
distributed to the Highly Compensated Employee on whose behalf such
contributions were made no later than March 15 of the following Plan Year.
Notwithstanding the foregoing, to the extent provided in regulations issued by
the Secretary of the Treasury, the amount that would otherwise be distributed to
a Participant in accordance with the provisions of this Section 6.02 shall be
reduced by the amount, if any, distributed to the Participant for the year under
Section 6.03. Any Matching Contributions made in respect to Basic Contributions
which are reduced pursuant to this subsection (b), shall (along with any income
and less any loss allocable thereto determined in accordance with Section
6.04(c)) be forfeited and reallocated as provided in Section 7.05.
(c) The income or loss allocable to a Participant's Basic
Contributions which exceed the limitation of subsection (a) above shall be
determined by multiplying the investment gain or loss of such Participant's
Basic Account for the Plan Year in which such excess Basic Contributions arose
and the period following such Plan Year ending on the day of the withdrawal of
such excess contributions (the "gap period") by a fraction. The numerator of
this fraction is the amount of the Participant's excess Basic Contributions to
be distributed and the denominator is the amount credited to the Participant's
Basic Account as of the beginning of the Plan Year, increased by the Basic
Contributions allocable to such Account for such Plan Year and the gap period.
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(d) In calculating the Actual Deferred Percentage under subsection
(a) above, (1) all elective contributions that are made under any other plan of
the Company that is required to be aggregated with the Plan under Section
401(a)(4) or 410(b) of the Code (other than Section 410(b)(2)(A)(ii) of the
Code) shall be treated as made under this Plan, and (2) the individual ratios
described in the second paragraph of (a) above for each Highly Compensated
Employee will be determined by treating all plans maintained by the Company in
which such Highly Compensated Employee participates as a single plan.
(e) The Committee shall determine each Plan Year whether the
limitation set forth in subsection (a) above is met and its determination shall
be final and binding on all persons.
6.03 Return of Excess Deferrals. If, during any calendar year, more
than the maximum permissible dollar amount under Section 3.04 of the Plan (and
Section 402(g) of the Code) is allocated pursuant to one or more cash or
deferred arrangements to a Participant's accounts under this Plan and any other
plan described in Sections 401(k), 408(k), or 403(b) of the Code, the following
provisions shall apply:
(a) no later than March 1 of the next succeeding calendar year,
the Participant may, but is not required to, allocate all or part of such
contributions in excess of the maximum permissible dollar amount ("excess
deferrals") to this Plan. To be effective, such allocation must be in writing,
state that excess deferrals have been made on behalf of such Participant for the
preceding calendar year, and be submitted to the Committee; and
(b) to the extent a Participant allocates excess deferrals in a
timely manner to this Plan pursuant to (a) above, the Committee shall direct the
Trustees to return such excess
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<PAGE> 35
deferrals, as adjusted for income or losses, to the Company for distribution to
the Participant no later than the April 15 following such allocation.
6.04 Limitation on Matching Contributions.
(a) At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Matching Contributions with respect
to any Participant at any time during the Plan Year, if the Committee determines
that such suspension or reduction is necessary to cause the test in either (i)
or (ii) below to be met with respect to such contributions for such Plan Year:
(i) the Actual Contribution Percentage for the Highly
Compensated Employees who are eligible for Matching Contributions, is
not more than the Actual Contribution Percentage for all other
Employees who are eligible for Matching Contributions, multiplied by
1.25; or
(ii) the excess of the Actual Contribution Percentage for the
Highly Compensated Employees who are eligible for Matching
Contributions, over the Actual Contribution Percentage for all other
Employees who are eligible for Matching Contributions, is not more than
two (2) percentage points, and the Actual Contribution Percentage for
the Highly Compensated Employees who are eligible for Matching
Contributions, is not more than the Actual Contribution Percentage for
all other Employees who are eligible for Matching Contributions,
multiplied by two (2).
For purposes of this subsection (a), the "Actual Contribution
Percentage" for a specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately for each Employee in such group) of
(A) the Matching Contributions actually paid
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<PAGE> 36
over to the Trust on behalf of the Employee for such Plan Year to (B) the
Employee's Compensation for the Plan Year. In determining the contribution
percentage of a Highly Compensated Employee described in Section 414(q)(6)(A) of
the Code who has a Family Member, the Matching Contributions made on behalf of
and the Compensation of such Highly Compensated Employee shall include the
Matching Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Participant for purposes of
determining the Actual Contribution Percentage for any group under the Plan to
the extent required by Sections 414(q) or 401(a)(17) of the Code and any
regulations promulgated hereunder, and any reduction required pursuant to
subsection (b) below shall be allocated among the Highly Compensated Employee
and his Family Member(s) in proportion to the Matching Contributions of each
such individual.
(b) If, for any Plan Year, the Committee determines the Matching
Contributions made on behalf of Highly Compensated Employees exceed the
limitation set forth in subsection (a) above, the Committee shall direct the
Trustees to reduce the Matching Contributions made on behalf of the Highly
Compensated Employees, in order of their contribution percentages beginning with
the highest of such percentages, by the amount necessary to cause the Plan to
meet such limitation for such Plan Year. All such Matching Contributions in
which the Highly Compensated Employee is fully vested under Section 7.05,
together with the income and loss allocable thereto (determined in accordance
with Section 6.04(c) below), shall be distributed to the Highly Compensated
Employee on whose behalf such contributions were made no later than March 15 of
the following Plan Year. All such Matching Contributions which with respect to
which the Highly Compensated employee
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<PAGE> 37
is not fully vested under Section 7.05, plus any income and minus any loss
allocable thereto (determined in accordance with Section 6.04(c) below), shall
be forfeited no later than March 15 of the following Plan Year and shall be
reallocated as provided in Section 7.05.
(c) The income or loss allocable to a Participant's Matching
Contributions which exceed the limitation set forth in subsection (a) above
shall be determined by multiplying the investment gain or loss of such
Participant's Matching Account for the Plan Year in which such excess
contributions arose and the period following such Plan Year ending on the day
the excess contributions are distributed or forfeited (the "gap period") by a
fraction. The numerator of this fraction is the amount of the Participant's
excess contributions to be distributed and the denominator is the amount
credited to the Participant's Matching Account as of the beginning of the Plan
Year, increased by the contributions allocated to such Account for the Plan Year
and the gap period.
(d) The sum of the Actual Deferral Percentage of Highly
Compensated Employees under Section 6.02(a) and the Actual Contribution
Percentage of Highly Compensated Employees under subsection (a) above shall not
exceed the "aggregate limit," as defined in the regulations promulgated under
Section 401(m) of the Code.
If the aggregate limit is exceeded, the Actual Contribution Percentage
of the Highly Compensated Employees shall be reduced in accordance with the
provisions of Section 6.04(b) above. In lieu of reducing the Actual Contribution
Percentage, however, the Committee may reduce the Actual Deferral Percentage of
the Highly Compensated Employees in accordance with the provisions of Section
6.02(b). The reductions under this Section shall be made only
32
<PAGE> 38
to the extent necessary to comply with the restrictions on the multiple use of
the "alternative limitation" within the meaning of Section 401(m)(9) of the
Code.
(e) In calculating the Actual Contribution Percentage under
subsection (a) above, (1) all employee and matching contributions that are made
under any other plan of the Company that is required to be aggregated with the
Plan under Section 401(a)(4) or 410(b) of the Code (other than Section
410(b)(2)(A)(ii) of the Code) shall be treated as made under this Plan, and (2)
the individual ratios described in the second paragraph of (a) above for each
Highly Compensated Employee will be determined by treating all plans maintained
by the Company in which such Highly Compensated Employee participates as a
single plan.
(f) The Committee shall determine each Plan Year whether the
limitations set forth in Subsections (a) and (d) above are met and its
determination shall be final and binding on all persons.
6.05 Limitations on Allocations. Notwithstanding anything hereinabove
to the contrary, the sum of the amounts credited to the accounts of any
Participant for any Plan Year pursuant to Section 5.02 (dealing with Basic
Contributions), Section 5.03 (dealing with Matching Contributions) and this
Section 6.05 shall be reduced to the extent that such amounts would cause the
sum of all such contributions credited to the accounts of such Participant under
the Plan for such Plan Year to exceed the lesser of (a) $30,000 (or, if greater,
one-fourth of the defined benefit dollar limitation set forth in Section 415(b)
of the Code, as adjusted pursuant to Section 415(d) of the Code), or (b)
twenty-five percent (25%) of such Participant's total compensation (determined
in accordance with Section 415 of the Code and the regulations
33
<PAGE> 39
thereunder) for such Plan Year. Any reductions required pursuant to the
foregoing sentence shall be made in the following order:
(i) the Basic Contributions allocated to such Participant's
Basic Account pursuant to Section 5.02 shall be reduced first; and
(ii) the Matching Contributions allocated to such
Participant's Matching Account pursuant to Section 5.03 shall be
reduced next.
In the event any reduction is required pursuant to subsection (i) above, the
amount of such reduction shall be held unallocated by the Trustees and shall be
reapplied in such a way as to reduce succeeding Basic Contributions on behalf of
such Participant under the Plan. In the event any reduction pursuant to (ii)
above is required, the amount of such reduction shall be applied toward the
Matching Contributions required to be made under Section 4.02 for the first pay
period ending after the date of the reduction.
In addition to the above limitations, the sum of each Participant's
defined benefit plan fraction (as defined in Section 415(e)(2) of the Code) and
defined contribution plan fraction (as defined in Section 415(e)(3) of the Code)
for any Plan Year shall not exceed 1.0. If any reduction or adjustment is
required in order to comply with the limitation in the preceding sentence, it
shall be made under the applicable defined benefit plan.
6.06 Contributions from Net Earnings. All Matching Contributions made
by the Company pursuant to Section 4.02 for any period are profit-sharing
contributions and, as such, shall be made from the Net Earnings of the Company
for such period or from its Net Earnings accumulated prior to such period.
34
<PAGE> 40
ARTICLE VII
Payments to or for the Account of
Participants or Terminated Participants
7.01 Restrictions on Payments and Distributions. No money or other
property of the Trust shall be paid out or distributed by the Trustees except
(a) for the purchase or other acquisition of appropriate investments, (b) for
defraying the expenses, including taxes, if any, of administering the Trust as
elsewhere herein provided, (c) for the purpose of making distributions to or for
the account of Participants at the written direction of the Committee in
accordance with the rules set forth below; (d) for the return of Company
contributions pursuant to Section 4.04 or (e) for the purpose of complying with
the terms of a qualified domestic relations order, within the meaning of Section
414(p) of the Code. All benefits payable under the Plan shall be paid or
provided for solely from the Trust, and the Company assumes no liability or
responsibility therefor.
7.02 Retirement. A Participant shall become fully vested in all his
accounts upon attainment of Normal Retirement Age. Upon retirement of a
Participant, which shall be deemed to mean any termination of his employment
with the Company at or after his Normal Retirement Age, the full amount then
standing to the credit of such Participant's accounts shall be distributed to
him or applied for his benefit as provided in Section 7.07. A Participant who
remains in the active employ of the Company after attaining Normal Retirement
Age shall continue as a Participant for all purposes of the Plan until the date
of his actual retirement.
7.03 Disability Retirement. If a Participant has applied and qualifies
for disability benefits under the Social Security Act or the Company's long-term
disability plan, the
35
<PAGE> 41
Committee shall direct the Trustees to apply the full amount then standing to
the credit of such Participant's accounts for his benefit as provided in Section
7.07.
7.04 Death Benefits.
(a) Upon the death of any Participant who has a surviving spouse,
the Committee shall direct the Trustees to distribute the full amount standing
to the credit of such Participant's accounts to the Participant's surviving
spouse, unless the exception provided by paragraph (b) of this Section 7.04
applies.
(b) The requirement of subsection (a) of this Section 7.04 shall
not apply if (i) the Participant elects to designate a Beneficiary other than
his spouse and his spouse (A) consents in writing to such election, (B) such
election designates a beneficiary which may not be changed without the consent
of the spouse (or the consent of the spouse expressly permits designations by
the Participant without any requirement of further consent by the spouse), and
(C) the spouse's consent acknowledges the effect of such election and is
witnessed by a Plan representative or a notary public, or (ii) if it is
established to the satisfaction of the Committee that the consent of the
surviving spouse could not have been obtained because there is no spouse,
because the spouse cannot be located, or because of other circumstances
prescribed by regulations under Section 417(a)(2) of the Code.
A former spouse shall be treated as a surviving spouse to the
extent benefits must be paid to such former spouse upon the Participant's death
pursuant to a qualified domestic relations order (as defined in Section 414(p)
of the Code), except that no consent shall be required from such former spouse
with respect to the designation of a Beneficiary to receive benefits not subject
to said order.
36
<PAGE> 42
(c) If, and only if, a Participant is not married or, if married,
is permitted under this Section 7.04 to designate a Beneficiary other than his
surviving spouse, then such Participant's accounts shall be distributed in
accordance with this subsection (c) of Section 7.04. Such a Participant shall
have the right to designate one or more Beneficiaries, including contingent
Beneficiaries, entitled to receive the amount payable in behalf of such
Participant under the provisions of this Plan in the event of death. Such
designation shall be made in writing in such manner as the Committee shall
determine. A Participant may change such designation from time to time, and may
revoke such designation, provided, however, that any subsequent designation must
meet the requirements of this Section 7.04. Upon the death of any Participant,
the Committee shall direct the Trustees to distribute, for the benefit of such
Participant's Beneficiaries and subject to the provisions of Section 7.08, the
full amount standing to the credit of the Participant's accounts. If a
Participant dies without having designated a Beneficiary, or if none of the
designated Beneficiaries survives the Participant, or if the Committee is in
doubt as to the effective status of a Beneficiary designation, payment of any
sum that would otherwise have been payable to such Beneficiary will be made to
the first surviving class of the following classes of successive preference
Beneficiaries, all members of such class to share equally: the Participant's (i)
surviving spouse; (ii) surviving issue (including adopted children and
stepchildren), per stirpes; (iii) surviving parents; (iv) brothers and sisters,
in equal shares; and (v) executors and administrators. If a Beneficiary entitled
to receive any amount payable in behalf of a Participant dies before receiving
the entire amount to which such Beneficiary is entitled, the undistributed
balance, together with any income or loss
37
<PAGE> 43
accumulated thereon, shall be distributed to such Beneficiary's estate in
accordance with Section 7.07.
7.05 Termination of Employment Prior to Retirement or Death.
(a) If any Participant's employment with the Company terminates
under circumstances other than by reason of retirement, disability or death, as
provided for under Sections 7.02 through 7.04, he shall be entitled to a vested
benefit equal to the sum of (i) 100% of the amounts standing to the credit of
his Basic Account and Rollover Account, plus (ii) that percentage of the amount
standing to the credit of his Matching Account, based upon his Periods of
Service, as follows:
<TABLE>
<CAPTION>
Periods Vested
of Service Percentage
---------- ----------
<S> <C>
Less than 3 0%
3 or more 100%
</TABLE>
A Participant whose employment with the Company terminates and who
immediately thereafter becomes an employee of an Affiliated Company shall not be
considered to have terminated his employment for purposes of this Section until
his employment with the Affiliated Company subsequently terminates.
The vested benefit determined in accordance with the foregoing
provision shall never be adjusted or altered in any fashion on account of any
Periods of Service which the Participant might complete upon reemployment with
the Company or an Affiliated Company after a Period of Severance, except as
provided in Section 7.06.
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<PAGE> 44
(b) The determination of the amount to which such terminated
Participant is entitled in accordance with the foregoing rules shall be made by
the Committee and communicated to the Trustees.
(c) Any amount standing to the credit of a Participant's Matching
Account to which he is not entitled at the time of his termination of employment
shall be forfeited by him upon the earlier of the payment of the full amount to
which such Participant is entitled under the Plan or the incurrence of a Period
of Severance of five (5) years by the Participant. For purposes of the preceding
sentence, a terminated Participant who is not entitled to receive any amount
under the Plan shall be deemed to have received the entire amount to which he is
entitled on the date his employment terminates and shall forfeit his entire
Matching Account as of that date. At the close of the Plan Year in which any
forfeitures occur, all such forfeited amounts shall be applied to reduce the
Company's Matching Contribution for such Plan Year.
7.06 Reemployment. If a terminated Participant is reemployed by the
Company, he shall again become an active Participant upon reemployment pursuant
to Section 3.03.
If such a reemployed Participant was not 100% vested in his Matching
Account under Section 7.05(a) at the time of his prior termination, the
following special provisions shall apply:
(a) If such a terminated Participant is reemployed after incurring
a Period of Severance of five (5) years (as defined in Section 7.05), he shall
have no rights with respect to any amounts previously forfeited from his
Matching Account.
(b) If such a terminated Participant is reemployed before
incurring a Period of Severance of five (5) years the full amount, if any, which
was forfeited from his Company
39
<PAGE> 45
Account as a result of his prior termination shall be restored to his Matching
Account as of the date of reemployment.
7.07 Methods of Payment.
(a) Whenever under this Article VII any amount is required to be
distributed or applied for the benefit of any Participant or Beneficiary or
other person, such distribution shall be made in one lump sum payment in cash.
(b) Whenever during any Plan Year the amount standing to the
credit of a Participant's accounts becomes distributable pursuant to Sections
7.02 through 7.05, distribution at such retirement, disability, death or other
termination of employment, as the case may be, shall be made or commenced within
a reasonable time after the latest of (1) the end of the Plan Year in which such
termination occurs, (2) the determination of the allocation to which the
Participant is entitled under Section 5.03 with respect to such Plan Year, or
(3) if Section 7.08(a) is applicable to such Participant, the date the
Participant consents to a distribution pursuant to that Section.
7.08 Restrictions on Method and Timing of Payment. Notwithstanding any
provision to the contrary, in order to comply with Sections 401(a)(9),
411(a)(11) and 414(p) of the Code, the following provisions shall apply:
(a) If the sum of a Participant's account balances to be
distributed upon retirement or severance or disability under Section 7.02, 7.03
or 7.05 is greater than $3,500, such account balances shall not be distributed
in whole or in part until the earlier of (i) the date the Participant attains
Normal Retirement Age or (ii) the Participant's death, unless the Participant
consents to such earlier distribution in writing.
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<PAGE> 46
(b) In no event shall the distribution of a Participant's
Accounts, unless the Participant otherwise elects, begin later than the 60th day
after the close of the Plan Year in which the later of the following events
occurs:
(i) the Participant's sixty-fifth (65th) birthday;
(ii) the tenth (10th) anniversary of the date on which the
Participant first became a Participant, or
(iii) the Participant's termination of service with the
Company (and any Affiliated Company).
(c) In no event shall distribution of benefits to a Participant
begin later than the April 1 next following the calendar year in which such
Participant attains age seventy and one-half (70-1/2) (the "Required
Distribution Date"). Notwithstanding the foregoing, the Required Distribution
Date for any Participant (i) who is not a "five-percent owner" (within the
meaning of Section 416(i)(1)(B)(i) of the Code) at any time during the five Plan
Year period ending in the calendar year in which the Participant attains age
70-1/2 and (ii) who attains age 70-1/2 before January 1, 1988, shall be no
earlier than the April 1 next following the calendar year in which the
Participant terminates employment with the Company.
(d) In the event a Participant dies before his Required
Distribution Date and his surviving spouse is not his Beneficiary, his entire
interest shall be paid to his Beneficiary in a lump sum no later than December
31 of the calendar year containing the fifth (5th) anniversary of the
Participant's death. If the Participant's Beneficiary is his surviving spouse,
the Participant's entire interest shall be paid to his surviving spouse in a
lump sum no later than the December 31 of the calendar year in which the
Participant would have attained age
41
<PAGE> 47
seventy and one-half (70-1/2). If the spouse dies before said date, subsequent
distributions shall be made as if the spouse had been the Participant. Life
expectancy will be calculated in accordance with Treasury Regulation Section
1.72-9 and regulations promulgated under Section 401(a)(9) of the Code.
(e) If, and to the extent that, any portion of a Participant's
account balances is payable to a former spouse or dependent pursuant to a
qualified domestic relations order within the meaning of Sections 401(a)(13)(B)
and 414(p) of the Code, the provisions of said order shall govern the
distribution thereof. Such an order may provide for payments to a former spouse
or dependent even though the Participant is still employed by the Company or is
otherwise not eligible for the distribution of benefits under the Plan.
7.09 Withdrawals During Employment.
(a) Upon written notice to the Committee at least thirty (30) days
(or such shorter period as the Committee allows) prior to a Valuation Date, a
Participant may at any time during his employment with the Company withdraw all
or any portion of the vested portion of the amount (determined as of such
Valuation Date) standing to the credit of his Basic Account and Matching
Account, excluding any outstanding loan amounts with respect to such accounts,
but only in order, and to the extent necessary, to meet a "Financial Hardship"
and to pay the amount of any taxes reasonably anticipated to result from such
withdrawal; provided, no such withdrawal from the Participant's Basic Account
may exceed the aggregate amount of the Basic Contributions made on his behalf by
the Company plus any earnings credited to his Basic Account as of December 31,
1988 (if any), reduced by the sum of all prior withdrawals from such
Participant's Basic Account. The determination that the Participant is faced
with a
42
<PAGE> 48
Financial Hardship and of the amount required to meet such Financial Hardship
which is not reasonably available from other resources of the Participant shall
be made by the Committee in accordance with uniform and nondiscriminatory
standards and policies which shall be adopted by the Committee and consistently
applied to each application for a withdrawal pursuant to this Section 7.09. For
purposes of this Section 7.09, "Financial Hardship" shall mean an immediate and
heavy financial need which such Participant is not able to meet from any other
reasonably available resources. In determining that such Participant is not able
to meet such Financial Hardship from any other sources, the Committee may
reasonably rely upon the written certification of the Participant given in
accordance with the regulations under Section 401(k). Subject to the foregoing
and the requirements of Section 401(k) of the Code and any regulations
thereunder, the term "Financial Hardship" shall mean and include the following:
(i) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
(ii) the payment of the tuition for the next twelve months
of post- secondary education for the Participant, his spouse, children,
or dependents;
(iii) the payment of medical expenses described in Section
213(d) of the Code which are incurred by the Participant, his spouse or
any dependent, and which are not covered by insurance; or
(iv) the need to prevent an eviction or mortgage foreclosure
on the Participant's principal residence.
(b) A Participant may specify that a withdrawal under this Section
7.09 is to be charged to his interest in one or more specific Investment Funds
in which the account
43
<PAGE> 49
charged with the withdrawal is invested. Unless so specified, distribution will
be made out of the interests of such account in each Investment Fund in
accordance with the proportion which the interest of such account in such
Investment Fund bears to the total value of such account, subject however to
such restrictions as may be applicable to the particular Investment Funds. The
amount to be withdrawn for any in-service withdrawal pursuant to this Section
7.09 shall be charged against the Members' accounts in the following order: his
Matching Account and then his Basic Account.
(c) All withdrawals under this Section 7.09 shall be made as soon
as practicable after the Valuation Date next following timely receipt by the
Committee of the Participant's written notice.
7.10 Loans to Members. Upon written application of a Participant
submitted to the Committee at least thirty (30) days (or such shorter period as
the Committee allows) prior to a Valuation Date, the Committee may direct the
Trustees to lend to such Participant such amount or amounts from his accounts,
as the Committee may determine proper, up to fifty percent (50%) of the total
aggregate vested value of all such Participant's accounts but only for one of
the purposes enumerated in Section 7.09 or such other type of financial
emergency as the Committee may deem appropriate in accordance with Section 9.05,
provided that the aggregate amount of all outstanding loans, including accrued
interest, from the Plan to a Participant shall not exceed $50,000, reduced by
the amount of any loan repayment of principal made during the one (1) year
period ending on the day before the date on which such loan is to be made. A
Participant may not have more than three loans outstanding under this Section
7.10 at any given time.
44
<PAGE> 50
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Committee may make reasonable distinctions
based upon credit-worthiness, other obligations of the Participant and other
factors that may adversely affect the ability to assure repayment. Loans
approved under this Section 7.10 shall be made as soon as reasonably practicable
after the Valuation Date next following timely receipt by the Committee of the
Participant's written application.
Each such loan shall be made at such reasonable rate of interest as the
Committee may determine, and shall be subject to such other terms and conditions
as the Committee may deem proper, and shall be evidenced by the promissory note
of the Participant and secured by fifty percent (50%) of the Participant's
interest in the Plan. Each such loan shall be repaid by such means as may be
authorized by the Committee, shall be amortized over the term of the loan in
level payments made not less frequently than quarterly, and shall be repaid
within five (5) years; provided, however, the Committee may establish rules and
procedures which permit repayment periods in excess of five years for a loan
used to acquire a dwelling unit which within a reasonable period of time is to
be used (determined at the time the loan is made) as the principal residence of
the Participant.
Each such loan shall be deemed to be an investment made at the
direction of such Participant and shall be credited to a separate investment
account for the borrowing Participant. An amount equal to the principal amount
of such loan when made shall be charged to the interests of such Participant's
accounts as designated by the Participant.
Subject to such restrictions as may be applicable to the particular
Investment Funds, in the event of a loan of less than the entire balance of a
Participant's account, the loan amounts
45
<PAGE> 51
shall be withdrawn from the Investment Funds pro rata in proportion to the
interest of such account in each of such Investment Funds. All interest and loan
repayments shall be credited to the appropriate accounts of such Participant and
shall be reinvested in the Investment Funds in accordance with the most recent
investment election of such Participant with respect to contributions credited
to such accounts. All expenses incurred by the Committee and the Trustees,
including reasonable attorneys' fees and court costs, as a result of a default
by a Participant shall be charged against the Participant's accounts.
If any loan under this Section 7.10 is in default, as determined in
accordance with the procedures established by the Committee, while any part or
all of the amount standing to the credit of a Participant's accounts becomes
distributable to such Participant or his Beneficiary, the Committee shall direct
the Trustees to apply the amount of such distributable amount in payment of the
entire outstanding loan principal, and any interest theretofore accrued, before
distributing the balance, if any, to the Participant or his Beneficiary.
7.11 Discharge of Trustees' Obligation to Make Payments. Whenever the
Trustees are required to make any payment or payments to any person in
accordance with the provisions of this Article VII or Article VIII, the
Committee shall notify the Trustees in writing of such person's last known
address as it appears in the Committee's records; and the obligations of the
Trustees and the Committee to make such payment or payments shall be fully
discharged by mailing the same to the address specified by the Committee.
7.12 Direct Rollovers.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a distributee
may elect, at the time
46
<PAGE> 52
and in the manner prescribed by the Committee, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) Whenever used in this Section 7.12, the following words shall
have the following meanings:
(i) Eligible Rollover distribution: 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: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and 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) Eligible retirement plan: an eligible retirement plan
is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
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<PAGE> 53
(iii) Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(iv) Direct rollover: A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributee.
(c) Notwithstanding anything above to the contrary, the Committee
may establish, in its discretion, such uniform restrictions with respect to the
payment of direct rollover distributions as may be permitted under Section
401(a)(31) of the Code and the regulations promulgated thereunder.
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ARTICLE VIII
Amendment and Termination
8.01 Right to Amend or Terminate. The Company reserves the right at any
time and from time to time to amend this Agreement, or discontinue or terminate
the Plan and Trust by delivering to the Committee and the Trustees a copy of an
amendment or appropriate Board of Directors' resolution of discontinuance or
termination certified by an officer of the Company; provided, however, that
except as provided in Section 8.02, the Company shall have no power to amend or
terminate this Agreement in such manner as would cause or permit (a) any of the
Trust assets to be diverted to purposes other than for the exclusive benefit of
the Employees of the Company or their Beneficiaries; (b) any reduction in the
amount theretofore credited to any Participant; (c) any portion of the Trust
assets to revert to or become the property of the Company; (d) the rights and
responsibilities of the Committee or the Trustees to be increased without their
written consent, and/or (e) the elimination of an optional form of benefit with
respect to amounts credited to a Participant's accounts before the amendment.
8.02 Amendment for Tax Exemption. The Company reserves the right to
amend this Agreement and the Plan and Trust hereunder in such manner as may be
necessary or advisable so that said Trust may continue to qualify as an exempt
employees' trust under the provisions of the Code; and any such amendment may be
made retroactively.
8.03 Liquidation of Trust in Event of Termination. In the event of
termination or partial termination (within the meaning of Section 411(d)(3) of
the Code) of this Plan and Trust, or complete discontinuance of contributions
thereto by the Company, the rights of all Participants (or in the case of a
partial termination, the rights of Participants affected thereby)
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to amounts theretofore credited to all their accounts shall be fully vested and
nonforfeitable. In the event of such termination or discontinuance, the Trustees
shall, subject to the direction of the Committee, hold the assets of the Trust
in accordance with the provisions of the Plan and distribute such assets from
time to time to Participants entitled thereto in accordance with such
provisions.
8.04 Termination of Plan and Trust. This Agreement and the Plan and
Trust hereunder shall in any event terminate whenever all property held by the
Trustees shall have been distributed in accordance with the terms hereof.
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ARTICLE IX
Administration of the Plan
9.01 Named Fiduciaries. The named fiduciaries with respect to the Plan
shall be the Company, the Committee and the Trustees. The Company shall be the
"plan administrator" of the Plan for all purposes of ERISA. The responsibilities
of the named fiduciaries shall be allocated as provided herein, and each such
fiduciary shall have only those responsibilities and obligations that are
specifically imposed upon it by this Trust Agreement or by applicable law. It is
intended that each of the named fiduciaries shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under the
Plan and shall not be responsible for any act or omission of any other
fiduciary. The Company, the Trustees, and the Committee, as named fiduciaries,
shall be entitled to delegate all or any part of their fiduciary
responsibilities, and obligations to any other person or entity. In the event of
any such delegation, (a) the named fiduciary shall not be liable for any act or
omission of the person to whom the responsibility has been delegated as long as
the selection and retention of such person is prudent and (b) the person to whom
the fiduciary powers and obligations are delegated shall be responsible only for
the proper exercise of the powers, duties, responsibilities, and obligations
that have been specifically delegated to him. The responsibilities of the named
fiduciaries are:
(i) The Company shall have the sole responsibility to
appoint and remove (in accordance with Section 10.11) the Trustees and
successor Trustees, to appoint and remove or replace the members of the
Committee as herein provided, and
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shall have such other powers and do such other things as are herein
specifically provided.
(ii) The Trustees shall, except as otherwise specifically
provided in this Agreement, have the sole responsibility for the
investment and control of the assets of the Plan and Trust in
accordance with the terms hereof, and for the appointment, retention,
and/or removal of any Investment Manager.
(iii) The Committee shall have the sole responsibility for
the general administration of the Plan and for carrying out its
provisions. In addition, the Committee shall have such powers and
responsibilities as are herein specifically provided.
The Committee shall conduct its business in accordance with the terms of this
Article IX.
9.02 Appointment of Committee. The Company shall appoint a Committee of
two or more persons, any or all of whom may be officers or employees of the
Company or any other individuals. Each Trustee shall be deemed to have been
appointed a member of the Committee by the Company if the Company has not
appointed any other persons to be members of the Committee. If the Committee
consists of no members other than the Trustees, all requirements under the Plan
that there be a direction, designation or other communication between the
Committee and the Trustees shall be disregarded. The members of the Committee
shall serve at the pleasure of and may be removed by the Company. Vacancies in
the Committee arising by resignation, death, removal, or otherwise shall be
filled by the Company. The number of members of the Committee shall be as
designated by the Company from time to time. The
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Trustees shall accept and may rely upon a certification by the Company as to the
number and identity of the individuals comprising the Committee from time to
time.
9.03 Powers of Committee. The Committee shall have all powers and
authority necessary in order to carry out its duties and responsibilities in
connection with the administration of the Plan and Trust as herein provided, and
the Committee may make such rules and regulations as it may deem necessary or
desirable to carry out the provisions of the Plan and Trust. The Committee shall
determine any question arising in the administration, interpretation, and
application of the Plan and Trust, including any question submitted by the
Trustees on a matter necessary for them properly to discharge their duties; and
the decision of the Committee shall be conclusive and binding on all persons.
9.04 Action by Committee. The Committee shall act by a majority of its
members at the time in office and such action may be taken by vote at a meeting
or in writing without a meeting. The Committee may by such majority action
authorize any one or more of its members to execute any direction or document or
take any other action on behalf of the Committee, and in such event any one of
the members of the Committee may certify in writing to the Trustees or any other
person the taking of such action and the name or names of the members of the
Committee so authorized, including himself. The execution of any direction,
document, or certificate on behalf of the Committee by any of its members shall
constitute his certification of his authority with respect thereto, and the
Trustees or other person shall be protected in accepting and relying upon any
such direction, document, or certificate and is released from inquiry into the
authority of any of the members of the Committee. Notwithstanding anything to
the contrary elsewhere herein contained, no member of the
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Committee shall take any action as a member of the Committee with respect to any
matter concerning himself as a Participant of the Plan.
9.05 Discretionary Action. Wherever under the provisions of this
Agreement the Committee is given any discretionary power or powers, such power
or powers shall not be exercised in such manner as to cause any discrimination
in favor of or against any Employee or class of Employees.
9.06 Evidence on Which Committee May Act. In taking any action or
determining any fact or question which may arise under this Plan and Trust, the
Committee may, with respect to the affairs of the Company or its Employees, rely
upon any statement by the Company with respect thereto. In the event that any
dispute may arise regarding the payment of any sums or regarding any act to be
performed by the Committee or the Trustees, the Committee may in its sole
discretion direct that such payment be retained or postpone or direct the
postponement of the performance of such act until actual adjudication of such
dispute shall have been made in a court of competent jurisdiction, or until the
Company, the Committee, and/or the Trustees shall have been indemnified against
loss to the satisfaction of the Committee; provided, however, that in the event
of any such dispute, the Committee may rely upon and act in accordance with any
directions received from the Company.
9.07 Employment of Agents. The Committee may employ agents, including,
but not limited to, custodians, accountants, consultants, or attorneys, to
exercise and perform such of the powers and duties of the Committee hereunder as
the Committee may delegate to them, and otherwise to render such services to the
Committee as the Committee may determine, and the Committee may enter into
agreements setting forth the terms and conditions of such service.
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The Committee may appoint an independent public accountant to audit the Plan.
The compensation of such agents shall be an expense chargeable in accordance
with Section 9.08. The Committee shall be fully protected in delegating any such
power or duty to or in acting upon the advice of any such agent, in whole or in
part, and except as may be required by Federal law, shall not be liable for any
act or omission of any such agent, the Committee's only duty being to use
reasonable care in the selection and retention of any such agent.
9.08 Compensation and Expense of Committee. The members of the
Committee shall serve without compensation for services as such. The Company
may, but is not obligated to, pay all or part of the expenses of the Committee.
To the extent not paid by the Company, the expenses of the Committee shall be
paid by the Trust. To the extent any expenses which are paid out of the Trust
are properly allocable to an Investment Fund or to the separate account of a
Participant, they shall be so allocated and charged. Such expenses shall include
any expenses incident to the functioning of the Trust, including, but not
limited to, attorneys' fees and the compensation of other agents, accounting and
clerical charges, expenses, if any, of being bonded as required by ERISA, and
other costs of administering the Trust.
9.09 Indemnification of Committee Members. The Company shall indemnify
and hold harmless each member of the Committee from and against any and all
claims, losses, damages, expenses (including reasonable attorneys' fees approved
by the Company), and liability (including any reasonable amounts paid in
settlement with the Company's approval), arising from any act or omission of
such member, except when the same is judicially determined to be due to the
willful misconduct of such member.
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ARTICLE X
The Trustees
10.01 Powers of Trustees. It shall be the duty of the Trustees to hold
and, subject to the provisions of this Article, to invest and reinvest the funds
of the Trust and to make distributions therefrom in accordance with the written
directions of the Committee. The Trustees shall have no responsibility for the
correctness under the terms of the Plan of any written directions which they
receive from the Committee. The Trustees shall not be responsible for the
collection of contributions payable to the Trust by the Company pursuant to
Article IV.
10.02 Investments. Except as provided in Sections 7.10 and 10.12, the
Trustees shall invest and reinvest the assets of the Trust and keep the same
invested, without distinction between principal and income, subject to the
following general investment policies:
(a) All amounts attributable to a Participant's accounts shall be
invested pursuant to the Participant's investment elections under Section 5.07
in one or more of the Investment Funds under the Plan.
(b) All interest, dividends, and other income, as well as any cash
proceeds from the sale or disposition of securities or other property, received
with respect to any Investment Funds (unless received in additional shares or
investment units of such Investment Funds) shall be reinvested in the same
Investment Funds which produced such interest, dividends, and other income. If
any distribution with respect to an Investment Funds may be received at the
election of the holder of shares or investment units in such Investment Funds in
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the form of additional shares or investment units or in cash or other property,
the Trustees shall elect to receive it in additional shares or investment units
of the Investment Funds.
(c) The Trustees shall have no responsibility for any investment
elections, directions or instructions exercised by Participants hereunder and
shall incur no liability on account of investing or administering the assets of
the Trust in accordance with such elections, directions, or instructions.
Without limitation of the foregoing, if, at any time, there shall be no
investment election in effect with respect to a Participant, the Trustees shall
invest all amounts contributed in respect of such Participant in such one or
more of the Investment Funds as the Committee shall, in its sole discretion,
select on a uniform basis for all such Participants.
10.03 Method of Holding, Buying, and Selling Securities. The Trustees
may keep any or all securities or other property in the name of some other
person, firm, or corporation or in their own name without disclosing fiduciary
capacity. The Trustees may sell at public auction or by private contract,
redeem, or otherwise realize upon any securities, investments, or other property
forming a part of the Trust fund and for such purposes may execute such
instruments and writings and do such things as they shall deem proper.
10.04 Exercise of Rights.
(a) Except as otherwise provided in paragraph (b) below or in
Section 10.12, the Trustees are hereby authorized to vote upon any stock, bonds,
or other securities of any corporation, association, or trust at any time
comprising the Trust fund or otherwise consent to or request any action on the
part of such corporation, association, or trust, and to give general or special
proxies or powers of attorney, with or without power of substitution,
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and to participate in reorganizations, recapitalizations, consolidations,
mergers, and similar transactions with respect to such securities; to deposit
such stocks and other securities in any voting trust, or with any protective or
like committee, or with a trustee, or with depositaries designated thereby; and
generally to exercise any of the powers of an owner with respect to the stock
and other securities and assets comprising the Trust fund which the Trustees
deem to be for the best interests of the Trust to exercise.
(b) Notwithstanding paragraph (a) above, each Participant shall
have the power to vote, or otherwise act with respect to, the shares in any
Investment Fund which is a mutual fund that is held by the Trustees for the
benefit of such Participant. Such shares shall be voted, or such other action
shall be taken with respect thereto, in accordance with the Participants'
instructions except as may otherwise be required by applicable law. To
facilitate such right, the Trustees shall have delivered to each Participant a
copy of all proxies, notices, and other relevant information which are
distributed to shareholders of such Investment Fund generally and the Trustees
shall establish such procedures for the collection of Participants' instructions
with respect to voting, or taking action with respect to, such shares and the
timely transmission of such instructions as they shall determine to be
appropriate. Any such shares with respect to which voting instructions have been
sought but have not been timely received shall not be voted.
10.05 Reliance on Trustees as Owners. No person dealing with the
Trustees shall be required to take any notice of this Agreement, but all persons
so dealing shall be protected in treating the Trustees as the absolute owners
with full power of disposition of all the monies, securities, and other property
of the Trust, and all persons dealing with the Trustees are
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released from inquiry into the decision or authority of the Trustees and from
seeing to the application of monies, securities, and other property paid or
delivered to the Trustees.
10.06 Liquidation of Assets. In the event that cash is required by the
Trustees to effect any action or distribution under this Trust, or to pay any
expenses of this Trust, or for any other reason deemed sufficient by the
Trustees consistent with any outstanding obligations of the Trust, the Trustees
shall take such action as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of cash necessary for
such payments.
10.07 Direction by Committee. Whenever the Committee consists of
members other than or in addition to the Trustees, and whenever the Trustees are
required or authorized to take any action hereunder pursuant to any written
direction or determination of the Committee, such direction or determination
shall be sufficient protection to the Trustees if contained in a writing signed
by any one or more of its members authorized to execute documents on behalf of
the Committee pursuant to Section 9.04. By such writing the Committee may
ratify, approve, or confirm any action taken by the Trustees, and upon such
ratification, approval, or confirmation the Trustees shall be protected as
though authorization or determination by the Committee had preceded such action.
In the absence of direction by the Committee as to any matter provided in this
Plan, the Trustees may in their discretion take such action as they deem fit and
proper with respect thereto after reasonable attempts to secure Committee
direction. The Trustees may deliver documents to the Committee by delivering the
same to each member of the Committee or by mailing the same, postage prepaid,
addressed to the Committee in care of the Company at its principal office.
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10.08 Records and Accounting. The Trustees shall keep accurate and
detailed records of their transactions hereunder and all their accounts, books,
and records relating thereto shall be open at all reasonable times to the
inspection of the Committee, the Company, and their authorized representatives.
The Trustees shall render in writing, at least once each twelve (12) months,
accounts of their transactions under this Agreement to the Company and each
member of the Committee, and the Committee (or the Company if the Trustees are
the sole members of the Committee) may approve such accounts of the Trustees by
an instrument in writing delivered to the Trustees. In the absence of the filing
in writing with the Trustees by the Committee (or the Company if the Trustees
are the sole members of the Committee) of exceptions or objections to any such
account within ninety (90) days after the receipt by the Committee (or the
Company if the Trustees are the sole members of the Committee) of any such
account, the Committee (or the Company if the Trustees are the sole members of
the Committee) shall be deemed to have approved such account; and in such case,
or upon the written approval of the Committee (or the Company if the Trustees
are the sole members of the Committee) of any such account, the Trustees shall
be released, relieved, and discharged with respect to all matters and things set
forth in such account. Except as may otherwise be required by applicable Federal
law, no person interested in the Trust or otherwise other than the Company or
the Committee may require an accounting or bring any action against the Trustees
with respect to the Trust and its actions as Trustees. In any proceeding
instituted by the Trustees, the Company, and/or the Committee with respect to
these accounts, only the Company, the Committee, and the Trustees shall be the
necessary parties. The Trustees shall
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from time to time make such other reports and furnish such other information
concerning the Trust as the Committee may in writing reasonably request or as
may be required by applicable Federal law.
10.09 Payment of Taxes. The Trustees shall upon direction of the
Company pay out of the Trust fund any and all taxes of any and all kinds,
including without limitation property taxes and income taxes levied or assessed
under existing or future laws upon or in respect of the Trust or any monies,
securities, or other property forming a part thereof or the income therefrom
subject to the terms of any agreements or contracts made with respect to trust
investments which make other provision for such tax payments. The Trustees may
assume that any taxes assessed on or in respect of the Trust or its income are
lawfully assessed unless the Company shall in writing advise the Trustees that
in the opinion of counsel for the Company such taxes are or may be unlawfully
assessed. In the event that the Company shall so advise the Trustees, the
Trustees will, if so requested in writing by the Company, contest the validity
of such taxes in any manner deemed appropriate by the Company or its counsel; or
the Company may itself contest the validity of any such taxes in the name of the
Trustees; and the Trustees agree to execute all documents, instruments, claims,
and petitions necessary or advisable in the opinion of the Company or its
counsel for the refund, abatement, reduction, or elimination of any such taxes.
10.10 Trustees' Compensation and Expenses. The Trustees shall not
receive compensation from the Plan for their services as such, but all
reasonable expenses of the Trustees, including those arising under Section 10.09
hereof may, at the election of the Company, be paid by the Company and unless or
until so paid shall constitute a charge upon
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the Trust. Such expenses shall include any expenses incident to the functioning
of the Plan, including but not limited to attorney's fees and the compensation
of other agents, accounting and clerical charges, the cost of obtaining any
bonds required by ERISA, and other costs of administering the Plan or the Trust.
To the extent that any expenses (including those arising under Section 10.09
hereof) which are paid out of the Trust are properly allocable to an Investment
Fund or to the separate account of a Participant, they shall be so allocated and
charged.
10.11 Resignation or Removal of Trustees. Any Trustee acting hereunder
may resign at any time upon thirty (30) days' written notice to the Company, the
Committee and the remaining Trustees, and the Company may remove any Trustee
upon thirty (30) days' written notice to the Trustees and the Committee; but the
Company and such Trustee may by written instrument waive such notice. If any
Trustee shall resign, be removed, or for any other reason cease to be Trustee,
the Company shall appoint a successor Trustee or Trustees. Subject to the
foregoing provisions, any resignation or removal of the Trustee or appointment
of a new Trustee shall be by instrument in writing and shall become effective on
the date therein specified. Any successor Trustee shall have the same powers and
duties as the succeeded Trustee, subject to such changes as the Company may then
determine. The appointment of any successor Trustee or Trustees hereunder shall
without any separate instrument or conveyance immediately vest title to the
assets of the Trust in such successor Trustee or Trustees. Upon request of such
successor Trustee or Trustees, the Company and the Trustee ceasing to act shall
execute and deliver such instruments of conveyance and further assurance and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming
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in such successor Trustee or Trustees all the right, title, and interest of the
retiring Trustee in and to the Trust funds.
10.12 Appointment of Investment Managers. The Trustees from time to
time may appoint one or more Investment Managers (as that term is defined in
Section 3(38) of ERISA) to manage (including the power to acquire and dispose
of) all or any portion or portions of the Trust. The Trustees may enter into
such agreements setting forth the terms and conditions of any such appointment
as they determine to be appropriate. The Trustees shall retain the right to
remove and discharge any Investment Manager. The compensation of such Investment
Managers shall be an expense payable in accordance with Section 10.10. The
Trustees shall notify the Company of the appointment of any Investment Manager
by delivering to the Company an executed copy of the agreement under which such
Investment Manager was appointed together with a written acknowledgment by such
Investment Manager that it is (a) a fiduciary with respect to the Plan, (b)
bonded as required by ERISA, and (c) is either (i) registered as an investment
advisor under the Investment Advisors Act of 1940, or (ii) a bank as defined in
said Act, or (iii) an insurance company qualified to perform investment
management services under the laws of more than one state of the United States.
The Trustees shall carry out the written instructions of any Investment Manager
with respect to the management and investment of the assets then under the
control of such Investment Manager and shall not incur any liability on account
of their compliance with such instructions. Purchase and sale orders may be
placed by such Investment Manager directly with brokers and dealers without the
intervention of the Trustees and, in such event, the Trustees' sole obligation
shall be to make payment for purchased securities and deliver those that have
been
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sold when advised of the transaction. The Trustees shall not incur any liability
on account of their failure to exercise any of the powers delegated to any
Investment Manager because of the failure of such Investment Manager to give
instructions for the management of the assets under the control of such
Investment Manager. The Trustees shall be under no duty to question any
Investment Manager, nor to review any securities or other property acquired or
retained at the direction of any Investment Manager, nor to make any suggestions
to any Investment Manager in connection therewith.
Each Investment Manager shall have the authority to exercise all of the
powers of the Trustees hereunder with respect to assets under its control
(including the power to vote, to give general or specific proxies or powers of
attorney, or to participate in reorganizations, mergers and similar
transactions, all as more fully described in Section 10.04), but only to the
extent that such powers relate to the investment of such assets. In addition,
each Investment Manager appointed hereunder is hereby authorized to direct the
investment of any part or all of the assets of the Trust under its control in
any one or more trusts, now or hereafter maintained by the Investment Manager or
by a bank or trust company which is an affiliate of the Investment Manager, for
the collective investment of funds held in trust, including but not limited to
trusts for the investment of funds held under employees' pension or profit
sharing plans or trusts which are qualified within the meaning of and exempt
from tax under the revenue laws of the Untied States, and permitted by existing
or future rulings of the United States Treasury Department to pool their
respective funds in a group trust. In the event that trust assets are invested
in any such collective investment trust, then the instrument pursuant to which
such
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collective investment trust is established shall be deemed a part of the Plan
and this Agreement and is specifically incorporated herein.
10.13 Indemnification of Trustees. The Company shall indemnify and hold
harmless each Trustee from and against any and all claims, losses, damages,
expenses (including reasonable attorneys' fees approved by the Company), and
liability (including any reasonable amounts paid in settlement with the
Company's approval), arising from any act or omission of such Trustee, except
when the same is judicially determined to be due to the willful misconduct of
such Trustee.
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ARTICLE XI
The Company
11.01 No Contract of Employment. This Trust shall not be construed as
creating any contract of employment between the Company and any Participant,
Employee, or other person, and nothing herein contained shall give any person
the right to be retained in the employ of the Company or otherwise restrain the
Company's right to deal with its employees, including Participants and
Employees, and their hiring, discharge, layoff, compensation, and all other
conditions of employment in all respects as though this Trust did not exist.
11.02 No Contract to Maintain Plan. The Company by the creation of the
Plan does not enter into any agreement to maintain the Plan or to make any
future contributions thereto or reimbursement of expenses incurred hereunder.
Each contribution by the Company shall be voluntary, and the Company reserves
the right to suspend payment of its contributions hereunder, and no party hereto
or Participant or any other person shall have any cause or right of action
against the Company by reason of any failure by the Company to make
contributions to the Trust, or by reason of any action by the Company in
terminating the Plan and Trust.
11.03 Liability of the Company. Subject to its agreement to indemnify
the members of the Committee and the Trustees, as provided in Sections 9.09 and
10.13, neither the Company nor any person acting in behalf of the Company shall
be liable for any act or omission on the part of any member of the Committee, on
the part of the Trustees, or on the part of any Investment Manager or for any
act performed or the failure to perform any act by any person with respect to
this Agreement, the Plan, or Trust, the Company's only duty being to use
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reasonable care in the selection and retention of the Trustees and the members
of the Committee.
11.04 Action by the Company. Whenever under the terms of this Agreement
the Company is permitted or required to take any action, such action shall be
taken by the Board of Directors, or any duly authorized committee thereof, or by
any officer of the Company thereunto duly authorized, by the Board of Directors
or otherwise. In such event, any such officer may certify to the Committee or
the Trustees or any other person the taking of such action and the name or names
of the officers so authorized, including himself or herself. The execution of
any direction, document, or certificate on behalf of the Company by any of its
officers shall constitute a certification of the authority of such officer with
respect thereto, and the Committee, the Trustees, or other person shall be
protected in accepting and relying upon any such direction, document, or
certificate and are released from inquiry into the authority of any officer of
the Company.
11.05 Successor to Business of the Company. Unless this Plan and Trust
be sooner terminated, a successor to the business of the Company, by whatever
form or manner resulting, may continue the Plan and Trust by executing an
appropriate supplementary agreement and such successor shall ipso facto succeed
to all the rights, powers, and duties of the Company hereunder. The employment
of any Employee who has continued in the employ of such successor shall not be
deemed to have been terminated or severed for any purposes hereunder.
11.06 Dissolution of the Company. If the Company is dissolved by reason
of bankruptcy or insolvency or otherwise, without any provision being made for
the continuation
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of this Plan and Trust by a successor to the business of the Company, the Plan
and Trust hereunder shall terminate, and the Trustees shall proceed in the same
manner as though the Plan and Trust were being terminated by the Company as
provided in Section 8.03.
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ARTICLE XII
Additional Participating Companies
12.01 Participation. Any subsidiary or affiliate of the Company may,
with the consent of the Company, become a participating employer by action of
the board of directors of such subsidiary or affiliate adopting the Plan and
Trust as a Plan and Trust for the benefit of its employees. Any such additional
participating employer is hereinafter referred to in this Article XII as a
"Participating Subsidiary."
12.02 Effective Date. The participation of any Participating Subsidiary
shall take effect as of the date of its action to adopt the Plan and Trust or
such other date as it may specify with the Company's approval.
12.03 Administration. Each Participating Subsidiary shall be deemed the
"Company" and shall have and exercise all the rights, powers, and duties thereof
with respect to the Plan as applied to itself and its employees and that part of
the Trust which represents accounts of Participants employed by it. Subject to
Section 12.04, each Participating Subsidiary hereby authorizes Freedom Capital
Management Corporation to exercise on its behalf all such rights, powers, and
duties, including amendment or termination of the Plan, appointment of the
Trustees and the members of the Committee, and serving as the Plan
Administrator. Each participating employer, including the Company and each
Participating Subsidiary, shall make contributions hereunder on behalf of its
employees in accordance with Article IV.
12.04 Termination. If the Plan shall be terminated by any one
Participating Subsidiary, the Trust shall be valued and the accounts of all
Participants adjusted pursuant to Section 5.06 and assets representing the
accounts of all Participants employed by such
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Participating Subsidiary shall be segregated into a separate trust and held
subject to the provisions of the Plan, and all rights, powers, and duties of the
Company with respect to such separate trust shall be exercised by such
Participating Subsidiary.
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ARTICLE XIII
Top-Heavy Provisions
13.01 General Rule. For any Plan Year for which this Plan is a
"top-heavy plan" as defined in Section 13.03 below, any other provisions of this
Plan to the contrary notwithstanding, this Plan shall be subject to the minimum
contribution provisions set by Section 13.02 and the limitation on contributions
set by Section 13.06.
13.02 Minimum Contribution Provisions. Each Participant who is a
non-key employee (as defined in Section 13.05 below) and who is an Employee as
of the last day of such Plan Year shall be entitled to a minimum contribution
which, when added to the amount of any employer contributions (excluding Basic
and Matching Contributions made with respect to Plan Years commencing on or
after January 1, 1989) allocated to the Participant's accounts under this Plan
and all other defined contribution plans maintained by the Company or any
Affiliated Company, will cause the sum of all such contributions to equal the
lesser of (a) three percent (3%) of such Participant's compensation for such
Plan Year or (b) the percentage at which contributions are made for the key
employee (as defined in Section 13.04 below) for whom such percentage is the
highest for such Plan Year; provided, if such Participant is also a non-key
employee covered under a defined benefit plan maintained by the Company or an
Affiliated Company, such Participant shall be entitled to a minimum benefit
under such defined benefit plan instead of the minimum contribution described in
this Section 13.02. For purposes of this Section 13.02, "compensation" shall be
determined within the meaning of Section 415 of the Code; provided, however,
that in no event shall a Participant's compensation exceed (a) $200,000 for any
Plan Year commencing on or after January 1, 1989 (or such larger amount as
71
<PAGE> 77
the Secretary of the Treasury may determine for such Plan Year under Section
401(a)(17) of the Code) and (b) $150,000 for any Plan Year commencing on or
after January 1, 1994 (or such larger amount as the Secretary of the Treasury
may determine for such Plan Year under Section 401(a)(17) of the Code). In
determining the compensation for a Participant for purposes of the dollar
limitation described in the preceding sentence for any Plan Year, the rules of
Section 414(q)(6) of the Code shall apply except that in applying such rules,
the term "family" shall include only the spouse of such Participant and any
lineal descendants of the Participant who have attained age 19 before the close
of such Plan Year.
13.03 Top-Heavy Plan Definition. This Plan shall be a "top-heavy plan"
for any Plan Year if, as of the determination date (as defined in Section
13.03(a) below), the sum of all accounts under the Plan for Participants
(including former Participants but excluding the accounts of Employees who have
not performed any services for the Company at any time during the five (5) year
period ending on the determination date) who are "key employees" (as defined in
Section 13.05 below) exceeds sixty percent (60%) of the sum of all accounts
under the Plan for all Participants (excluding the accounts of former "key
employees" and of Employees who have not performed any services for the Company
at any time during the five (5) year period ending on the determination date)
unless the Plan is part of an aggregation group or if this Plan is part of an
aggregation group (as defined in Section 13.03(b) below) which for such Plan
Year is a "top-heavy group" (as defined in Section 13.03(c) below). Solely for
purposes of this Section 13.03, a Participant's account shall include any
distribution made in the five (5) year period ending on the determination date,
and any contribution due but unpaid as of the determination date.
72
<PAGE> 78
(a) "Determination date" means for any Plan Year the last day of
the immediately preceding Plan Year; provided, the determination date" for the
first Plan Year shall be the last day of such first Plan Year. If two or more
plans are being aggregated, they shall be aggregated by adding together the
results for each plan as of the determination dates for such plans that fall
within the same calendar year.
(b) "Aggregation group" means the group of plans, if any, that
includes the group of plans that are required to be aggregated and, if the
Committee so elects, the group of plans that are permitted to be aggregated.
(i) The group of plans that are required to be aggregated
(the "required aggregation group") includes:
(A) each plan (including any terminated plan) of the
Company and of any Affiliated Company in which a "key
employee" is a member, and
(B) each other plan of the Company and any Affiliated
Company which enables a plan in which a key employee is a
member to meet the requirements of either Section 401(a)(4)
or Section 410 of the Code.
(ii) The plans that are permitted to be aggregated (the
"permissive aggregation group") include any plan that is not part of
the "required aggregation group" that the Committee certifies as
constituting a plan within the "permissive aggregation group." Such
plans may be added to the "permissive aggregation group" only if, after
the addition, the "aggregation group" as a whole continues to meet the
requirements of both Section 401(a)(4) and Section 410 of the Code.
73
<PAGE> 79
(c) "Top-heavy group" means the "aggregation group," if, as of the
applicable determination date, the sum of the present value of the accrued
benefits for "key employees" under all defined benefit plans included in the
"aggregation group" plus the aggregate of the accounts of "key employees"
(excluding the accounts of Employees who have not performed any services for the
Company at any time during the five (5) year period ending on the determination
date) under all defined contribution plans included in the "aggregation group"
exceeds sixty percent (60%) of the sum of the present value of the accrued
benefits for all employees under all such defined benefit plans plus the
aggregate accounts for all Employees under such defined contribution plans
(excluding the accounts of former "key employees" and of Employees who have not
performed any services for the Company at any time during the five-year period
ending on the determination date). Solely for purposes of this subsection (c),
the accrued benefits of "non-key employees" shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Company and any Affiliated Company, or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Section 411(b)(1)(C) of the Code.
(d) In determining whether this Plan constitutes a "top-heavy
plan," the Committee shall follow the rules set forth in Section 416 of the Code
and regulations pertaining thereto.
13.04 Key Employee. The term "key employee" means any Employee (and any
Beneficiary of an Employee) under this Plan who is a "key employee" as
determined in accordance with Section 416(i)(1) of the Code.
74
<PAGE> 80
13.05 Non-Key Employee. The term "non-key employee" means any Employee
(and any Beneficiary of an Employee) who is a "non-key employee" as determined
in accordance with Section 416(i)(2) of the Code.
13.06 Limitation on Contributions. For each Plan Year that the Plan is
a top-heavy plan, 1.0 shall be substituted for 1.25 as the multiplicand of the
dollar limitation in determining the denominator of the defined benefit plan
fraction and of the defined contribution plan fraction for purposes of Section
415(e) of the Code.
75
<PAGE> 81
ARTICLE XIV
Miscellaneous
14.01 Spendthrift Provision. It is a condition of the Plan, to which
all rights of each Participant shall be subject, that no right or interest of
any Participant in the Plan or in the Trust shall be assignable or transferable
in whole or in part, either directly or indirectly, by operation of law or
otherwise, including but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner, but excluding devolution
by death or acquisition by a guardian or committee of a mental incompetent, and
no rights or interest of any Participant in the Plan or in the Trust shall be
liable for or subject to any obligation or liability of such Participant except
obligations of a Participant under a qualified domestic relations order within
the meaning of Section 414(p) of the Code or obligations to the Trust pursuant
to Section 7.10.
14.02 Appointment of Person to Receive Payment. If a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is deemed
by the Company or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, they will be paid to such persons as the
Committee may designate or to the duly appointed guardian. In the event any
amount shall become payable hereunder to any person (or the Beneficiary or
estate of such person), and if after written notice from the Trustees mailed to
such person's last known address as shown on the Committee's records, such
person or personal representative shall not have presented himself to the
Trustees or notified the Trustees in writing of his address within one (1) year
after the mailing of such notice, then the Committee shall in its discretion
appoint one or more of the spouse and blood relatives of such person to receive
such
76
<PAGE> 82
amount, including any amount thereafter becoming due to such person (or estate),
in the proportions determined by them. Any action of the Committee hereunder
shall be binding and conclusive upon all persons.
14.03 Construction. In any question of interpretation or other matter
of doubt, the Trustees, the Committee, and the Company may rely upon the opinion
of counsel for the Company or any other attorney at law designated by the
Company with the approval of the Trustees. The provisions of this Agreement
shall be construed, administered, and enforced according to the laws of the
United States and, to the extent permitted by such laws, by the laws of the
Commonwealth of Massachusetts. All contributions to the Trust shall be deemed to
be made in the Commonwealth of Massachusetts.
14.04 Impossibility of Performance. In case it becomes impossible for
the Company, the Committee, or the Trustees to perform any act under this Plan
and Trust, that act shall be performed which in the judgment of the Committee
will most nearly carry out the intent and purpose of this Plan and Trust. All
parties to this Agreement or in any way interested in this Plan and Trust shall
be bound by any acts performed under such condition.
14.05 Definition of Words. Feminine or neuter pronouns shall be
substituted for those of the masculine form, and the plural shall be substituted
for the singular, in any place or places herein where the context may require
such substitution or substitutions.
14.06 Titles. The titles of articles and sections are included only for
convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.
77
<PAGE> 83
14.07 Merger or Consolidation. In the event that this Plan is merged
with or consolidated with any other plan, or the assets or liabilities accrued
under this Plan are transferred to any other plan, each Participant's benefit
under such other plan shall be at least as great immediately after such merger,
consolidation, or transfer (if such plan were then to terminate) as the benefit
to which such Participant would have been entitled under this Plan immediately
before such merger, consolidation, or transfer (if the Plan were then to
terminate).
14.08 Claims Procedure. In accordance with Section 503 of the ERISA and
the regulations of the Secretary of Labor prescribed thereunder,
(a) All claims for benefits under this Plan shall be filed in
writing with the Committee in accordance with such procedures as the Committee
shall reasonably establish;
(b) The Committee shall, within ninety (90) days of submission of
a claim, provide adequate notice in writing to any claimant whose claim for
benefits under the Plan has been denied, setting forth the specific reasons for
such denial and such other information as is required by said regulations
written in a manner calculated to be understood by the claimant;
(c) The Committee shall, upon written request by a claimant within
sixty (60) days of the receipt of the notice that the claim has been denied,
afford a reasonable opportunity to such claimant for a full and fair review by
the Committee of the decision denying the claim; and
(d) The Committee shall, within sixty (60) days of receipt of a
request for a review, render a written decision on its review setting forth the
specific reasons for such decision, written in a manner to be understood by the
claimant.
78
<PAGE> 84
14.09 Special Provisions for Certain Leased Employees. A "leased
employee" shall receive credit for Hours of Service for the entire period during
which he is a leased employee of the Company as if he were an Employee of the
Company; provided, however, a leased employee shall not be an Employee eligible
to participate in the Plan as long as he remains a leased employee. For purpose
of this Section 14.09, the term leased employee means any person (a) who is not
an Employee of the Company or an Affiliated Company and (b) who pursuant to an
agreement between the Company or an Affiliated Company and any other person (a
"leasing organization") has performed services for the Company or an Affiliated
Company of a type historically performed by employees in the business field of
the Company or Affiliated Company on a substantially full-time basis for a
period of at least one (1) year. Notwithstanding the foregoing, if leased
employees constitute less than twenty percent (20%) of the Company's or
Affiliated Company's non-highly compensated work force within the meaning of
Section 414(n)(5) of the Code, a person who is covered by a money purchase
pension plan maintained by the leasing organization which provides a
non-integrated employer contribution rate of at least ten percent (10%) of
compensation, immediate participation, and full vesting shall not be considered
a leased employee.
14.10 Effective Date of Amendment and Restatement. The effective date
of this amendment and restatement shall be January 1, 1989, except as otherwise
specifically provided herein, and shall apply only to Employees credited with at
least one (1) Hour of Service on or after said date. Notwithstanding the
foregoing, the effective date of the changes contained in Section 4.02 shall be
January 1, 1989, the effective date of the changes contained in Section 6.02,
Section 6.03, Section 6.04 and Section 6.05 shall be January 1, 1987, the
effective date
79
<PAGE> 85
of the changes contained in Section 13.03 shall be January 1, 1985 and the
effective date of Section 7.12 shall be January 1, 1993.
14.11 Execution of Agreement. This Agreement may be executed in any
number of counterparts and each fully executed counterpart shall be deemed an
original.
IN WITNESS WHEREOF the Company, by its duly authorized officer, and the
Trustees have caused these presents to be signed and in the case of the Company,
its corporate seal affixed, this 9th day of November, 1994.
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By /s/ John Danello
---------------------------------
Title Managing Director
TRUSTEES:
/s/ Edward W. Weld
------------------------------------
Edward W. Weld
/s/ Dexter A. Dodge
------------------------------------
Dexter A. Dodge
/s/ David L. Richardson, Jr.
------------------------------------
David L. Richardson, Jr.
80
<PAGE> 86
FREEDOM CAPITAL MANAGEMENT CORPORATION
DEFERRED SAVINGS PLAN AND TRUST AGREEMENT
First Amendment
A. The FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED
SAVINGS PLAN AND TRUST AGREEMENT as amended and restated effective January 1,
1989, is hereby further amended, as follows:
1. Section 2.10 is hereby amended, effective January 1, 1995, to read
as follows: "2.10 'Eligible Employee' means any Employee."
2. Article II is hereby amended, effective January 1, 1995, by adding a
new Section 2.31 at the end thereof to read as follows:
"2.31 'Year of Eligibility Service' for any Employee means (a) the
twelve-month period beginning on the date he becomes an Employee but only
if such Employee is credited with 1,000 or more Hours of Service during
such period; and (b) each Plan Year commencing after the Employee's date
of hire during which such Employee is credited with 1,000 or more Hours of
Service."
3. Section 3.01 is hereby amended, effective January 1, 1995, by adding
a new paragraph at the end thereof to read as follows:
"Effective January 1, 1995, (i) any Eligible Employee who is
employed on a regular full-time basis shall be eligible to become a
Participant on the first day he becomes an Eligible Employee and (ii) any
Eligible Employee who is not employed on a regular full-time basis shall
be eligible to become a Participant on the first January 1 or July 1
coincident with or next following his completion of a Year of Eligibility
Service. For purposes of this Section, an Employee shall be deemed to be
employed on a 'regular full-time basis' if such Employee is expected to
complete at least 1,000 Hours of Service in any period used to determine
completion of a Year of Eligibility Service under Section 2.31."
B. Except as so amended, the Plan in all other respects, is hereby confirmed.
<PAGE> 87
IN WITNESS WHEREOF, these presents have been signed and sealed for and on
behalf of the Employer by its duly authorized officer this 18th day of
July, 1995.
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ Edward W. Weld
-----------------------
2
<PAGE> 88
FREEDOM CAPITAL MANAGEMENT CORPORATION
DEFERRED SAVINGS PLAN AND TRUST
Second Amendment
A. The FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED SAVINGS
PLAN as amended and restated effective January 1, 1989, is hereby further
amended effective as of October 16, 1996, as follows:
1 Section 7.10 is hereby amended in its entirety to read as follows:
"7.10 Loans to Participants. Upon written application of a Participant
submitted to the Company at least (30) days (or such shorter period as the
Company allows) prior to a Valuation Date, the Company may direct the Trustees
to lend to such Participant such amount or amounts from his accounts under the
Plan up to fifty percent (50%) of the total aggregate value of the vested
portion of such Participant's accounts (determined as of such Valuation Date,
provided that the aggregate amount of all outstanding loans, including accrued
interest, from the Plan to a Participant shall not exceed $50,000, reduced by
the amount of any loan repayment made during the one (1) year period ending on
the day before the date on which such loan is to be made. The minimum amount
which may be loaned to a Participant under this Section 7.10 shall be $1,000. A
Participant may not have more than three loans outstanding under this Section
7.10 at any given time.
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Company may make reasonable distinctions based
upon credit-worthiness, other obligations of the Participant and other factors
that may adversely affect the ability to assure repayment. Loans approved under
this Section 7.10 shall be made as soon as reasonably practicable after the
Valuation Date next following timely receipt by the Company of the Participant's
written application.
Each such loan shall be made at such reasonable rate of interest as the
Company may determine, and shall be subject to such other terms and conditions
as the Company may deem proper, and shall be evidenced by the promissory note of
the Participant and secured by at least fifty percent (50%) of the Participant's
interest in the Plan. Each such loan shall be repaid by such means as may be
authorized by the Company, shall be amortized over the term of the loan in level
payments made not less frequently than quarterly, and shall be repaid within
five (5) years unless such loan is used to acquire a dwelling unit which within
a reasonable period of time is to be used (determined at the time the loan is
made) as the principal residence of the Participant in which case the repayment
period shall not exceed twenty (20) years.
Each such loan shall be deemed to be an investment made at the direction
of such Participant and shall be credited to a separate investment account for
the borrowing Participant. An
<PAGE> 89
amount equal to the principal amount of such loan when made shall be charged to
the interests of such Participant's accounts as designated by the Participant.
Subject to such restrictions as may be applicable to the particular
Investment Funds, in the event of a loan of less than the entire balance of a
Participant's account, the loan amounts shall be withdrawn from the Investment
Funds pro rata in proportion to the interest of such account in each of such
Investment Funds. All interest and loan repayments shall be reinvested in the
Investment Funds in accordance with the most recent investment election of such
Participant with respect to contributions credited to such accounts. All
expenses incurred by the Company and the Trustees, including reasonable
attorneys' fees and court costs, as a result of a default by a Participant shall
be charged against the Participant's accounts.
If any loan under this Section 7.10 is in default, as determined in
accordance with the procedures established by the Company, when any part or all
of the amount standing to the credit of a Participant's accounts becomes
distributable to such Participant or his Beneficiary, the Company shall direct
the Trustees to apply the amount of such distributable amount in payment of the
entire outstanding loan principal, and any interest theretofore accrued, before
distributing the balance, if any, to the Participant or his Beneficiary."
B. Except as so amended, the Plan in all other respects, is hereby confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and on behalf
of the Employer by its duly authorized officer this 16th day of October 1996.
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By /s/ John Danello
----------------------------
<PAGE> 90
FREEDOM CAPITAL MANAGEMENT CORPORATION
DEFERRED SAVINGS PLAN AND TRUST
Third Amendment
A. The FREEDOM CAPITAL MANAGEMENT CORPORATION DEFERRED
SAVINGS PLAN AND TRUST (the "Plan") as amended and restated effective January 1,
1989, is hereby further amended in its entirety to read as follows:
1. Section 2.16 is hereby amended to read as follows:
"2.16 "Investment Fund or "Investment Funds" means one or more of the
funds established by the Committee for the investment of Plan assets, as
more fully described in Section 5.07. In addition, the term "Investment
Fund" or "Investment Funds" shall include any investment fund established
by the Trustees at the direction of the Committee which shall be invested
primarily in shares of common stock, $.01 par value per share, of Freedom
Securities Corporation, a Delaware corporation, which stock constitutes
"qualifying employer securities" as defined in section 407(d)(5) of ERISA
and "employer securities" as defined in section 409(l) of the Code
("Freedom Securities Stock"), and short-term interest income vehicles (the
"Freedom Securities Stock Fund"). Consistent with ERISA, the assets of the
Plan may be used to acquire and hold Freedom Securities Stock in any
proportions or amounts."
2. Section 4.02 is hereby amended by adding the following parenthetical
immediately after the term "Matching Contribution" on the second line thereof:
"(in cash or shares of Freedom Securities Stock, in the discretion of the
Company)"
3. Section 5.05 is hereby amended by adding "(a)" at the beginning of
the first paragraph thereto and adding the following subsection (b) to follow
such paragraph:
"(b) Freedom Securities Stock held by the Trust shall be valued
according to the following rules: (1) in the case of Freedom Securities
Stock that is publicly traded on a national securities exchange, such
stock shall be valued by reference to the closing price of such stock on
such exchange on the last trading day immediately preceding the date such
stock is contributed to the Plan or other relevant date for which the
valuation is to be performed and (2) in the case of Freedom Securities
Stock that is not publicly traded on a national securities exchange, such
stock shall be valued as of the date of contribution or other relevant
date by determining the fair market value of such stock through the use of
an independent appraiser."
<PAGE> 91
4. Section 7.07(a) is hereby amended to read as follows:
"Whenever under this Article VII any amount is required to be distributed
or applied for the benefit of any Participant or Beneficiary or other
person, such distribution shall be made in one lump sum payment (i) in
cash, or (ii) in full shares of Freedom Securities Stock to the extent of
such Participant's accounts interest in the Freedom Securities Stock Fund
plus the cash equal to the value of the remaining balance of such
Participant's accounts."
5. Article X is hereby amended by adding the following Sections 10.14
and 10.15 at the end thereof:
"Section 10.14 Voting of Freedom Securities Stock. Each Participant
or Beneficiary shall have the right and shall be afforded the opportunity
to direct the manner in which the shares of Freedom Securities Stock
representing the interest of such Participant or Beneficiary in the
Freedom Securities Stock Fund shall be voted at all stockholders'
meetings. To facilitate such right the Company shall deliver to each
Participant or Beneficiary a copy of all proxies, notices, and other
information which it distributes to its shareholders generally and the
Committee shall establish such procedures for the collection of
Participants' and Beneficiaries' instructions on the voting of such
Freedom Securities Stock and the timely transmission of such instructions
to the Trustees as it shall determine to be appropriate. Any Freedom
Securities Stock allocable to the interests of Participants and
Beneficiaries in the Freedom Securities Stock Fund for which no signed
voting-direction instrument is timely received from the Participant or
Beneficiary shall not be voted by the Trustees. The Trustees shall take
any and all necessary measures, including, but not limited to, the
retention of an independent outside tabulator, recordkeeper, auditor or
other person, to ensure that the instructions received from Participants
shall be held in strict confidence and shall not be divulged or released
to any person, including employees, officers and directors of the Company
or any Affiliated Company. Participants and Beneficiaries do not acquire
ownership of Freedom Securities Stock held by the Trustees unless and
until the Trustees deliver to them in accordance with Article VII hereof
stock certificates which have been registered in their names on the stock
books of the Company. For purposes of this Section 10.14, to the extent
the Plan does not meet the requirements of Section 404(c) of ERISA, each
Participant and Beneficiary shall be a named fiduciary under the Plan with
respect to his interest in the shares of Freedom Securities Stock held in
the Freedom Securities Stock Fund.
10.15. Tender Offer or Exchange Offer. In the event of a tender offer or
exchange offer by any person (including the Company) for any or all shares
of Freedom Securities Stock held in the Trust, each Participant or
Beneficiary shall have the right and shall be afforded the opportunity to
direct in writing whether the shares of Freedom Securities Stock
(including fractional shares) representing the interest of such
Participant in the Freedom Securities Stock Fund shall be tendered or
exchanged in response to such offer. The Trustees shall act with respect
to such Freedom Securities
<PAGE> 92
Stock in accordance with such written instructions. Any such Freedom
Securities Stock with respect to which written instructions have not been
timely received by the Trustees shall not be tendered or exchanged. To
facilitate the foregoing right of the Participants, the Company shall
utilize its best efforts to distribute or cause to be distributed to each
Participant substantially the same information as may be distributed to
the stockholders of the Company in connection with such offer and the
Committee shall establish such procedures for the collection of
Participants' and Beneficiaries' instructions with respect to such Freedom
Securities Stock and the timely transmission of such instructions to the
Trustees as it shall determine to be appropriate. The Trustees shall take
any and all necessary measures, including, but not limited to, the
retention of an independent outside tabulator, recordkeeper, auditor or
other person, to ensure that the instructions received from Participants
and Beneficiaries shall be held in strict confidence and shall not be
divulged or released to any person, including employees, officers and
directors of the Company or any Affiliated Company. For purposes of this
Section 10.15, to the extent the Plan does not meet the requirements of
Section 404(c) of ERISA, each Participant and Beneficiary shall be a named
fiduciary under the Plan with respect to his interest in the shares of
Freedom Securities Stock held in the Freedom Securities Stock Fund."
B. Except as so amended, the Plan in all other respects, is hereby
confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and on
behalf of Freedom Capital Management Corporation by its duly authorized officer
this 27th day of March, 1998.
FREEDOM CAPITAL MANAGEMENT
CORPORATION
By: /s/ John Danello
----------------------
<PAGE> 1
Exhibit 4.3
PROFIT-SHARING RETIREMENT PLAN AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO. INCORPORATED
-i-
<PAGE> 2
TABLE OF CONTENTS
Page(s)
ARTICLE I. INTRODUCTION............................................. 2
1.01 Creation of Trust........................................ 2
1.02 Interpretation of Trust Agreement........................ 2
ARTICLE II. DEFINITIONS.............................................. 3
2.01 "Affiliate Company"...................................... 3
2.02 "Agreement".............................................. 3
2.03 "Anniversary Date"....................................... 3
2.04 "Beneficiary"............................................ 3
2.05 "Board of Directors"..................................... 4
2.06 "Break in Service"....................................... 4
2.07 "Committee".............................................. 4
2.08 "Company"................................................ 4
2.09 "Company Contributions".................................. 4
2.10 "Compensation"........................................... 4
2.11 "Eligible Retirement Plan"............................... 4
2.12 "Eligible Rollover Distribution"......................... 6
2.13 "Employee"............................................... 7
2.14 "Excess Aggregate Contributions"......................... 8
2.15 "Excess Contributions"................................... 8
2.16 "Family Member".......................................... 8
2.17 "Highly Compensated Employee"............................ 8
2.18 "Hours of Service"....................................... 9
2.19 "Investment Media"....................................... 11
2.20 "Leased Employees"....................................... 12
2.21 "Matching Contributions"................................. 13
2.22 "Net Profits"............................................ 14
2.23 "Non-Highly Compensated Participant"..................... 14
2.24 "Normal Retirement Age".................................. 15
2.25 "Participant"............................................ 15
2.26 "Plan"................................................... 15
2.27 "Plan Year" and "Limitation Year"........................ 15
2.28 "Qualified Matching Contributions"....................... 15
2.29 "Qualified Nonelective Contributions".................... 15
2.30 "Salary Reduction Agreement"............................. 15
2.31 "Self-Directed Account".................................. 16
2.32 "Tax Deferred Contributions"............................. 16
2.33 "Trust".................................................. 16
2.34 "Trustees"............................................... 16
2.35 "Valuation Date"......................................... 16
2.36 "Voluntary Contributions"................................ 16
2.37 "Year of Service"........................................ 16
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<PAGE> 3
Page(s)
ARTICLE III. PARTICIPATION............................................ 17
3.01 Eligibility for Participation............................ 17
3.02 Determination of Eligibility by Committee................ 19
3.03 Duration of Eligibility.................................. 19
3.04 Salary Reduction Agreement............................... 19
ARTICLE IV. CONTRIBUTIONS UNDER THE PLAN............................. 20
4.01 Tax Deferred Contributions............................... 21
4.02 Matching Contributions................................... 21
4.03 Qualified Nonelective Contributions
and Qualified Matching Contributions..................... 23
4.04 Company Contributions.................................... 24
4.05 Payment of Contributions................................. 24
4.06 Reversion of Certain Contributions Made by the Company... 25
4.07 Voluntary Contributions.................................. 26
4.08 Rollover Contributions................................... 26
4.09 Conditions of Rollover................................... 27
4.10 Transfers from Other Plans............................... 28
ARTICLE V. PARTICIPANTS' ACCOUNTS; ALLOCATION OF
ASSETS AND CONTRIBUTIONS; PARTICIPANTS'
INVESTMENT ELECTIONS..................................... 28
5.01 Participants' Accounts................................... 28
5.02 Allocation of Tax Deferred Contributions................. 29
5.03 Allocation of Qualified Nonelective Contributions and
Qualified Matching Contributions......................... 29
5.04 Allocation of Matching Contributions
(Including Forfeitures).................................. 30
5.05 Allocation of Company Contributions...................... 30
5.06 Allocation of Rollover Contributions..................... 32
5.07 Valuation and Allocation of Assets....................... 32
5.08 Distributions and Forfeitures............................ 33
5.09 Election of Investments.................................. 33
ARTICLE VI. LIMITATIONS ON CONTRIBUTIONS
AND ALLOCATIONS.......................................... 34
6.01 Contributions to be Deductible........................... 34
6.02 Limitation on Tax Deferred Contributions................. 34
6.03 Return of Excess Deferrals............................... 39
6.04 Limitation on Matching and Voluntary Contributions....... 40
6.05 Limitations on Annual Additions.......................... 44
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<PAGE> 4
Page(s)
ARTICLE VII. PAYMENTS TO OR FOR THE ACCOUNT OF
PARTICIPANTS OR TERMINATED PARTICIPANTS.................. 48
7.01 Restrictions on Payments and Distributions............... 48
7.02 Retirement............................................... 49
7.03 Disability Retirement.................................... 49
7.04 Death Benefits........................................... 50
7.05 Termination of Employment Prior to Retirement or Death... 52
7.06 Reemployment............................................. 53
7.07 Methods of Payment....................................... 54
7.08 Restrictions on Method and Timing of Payment............. 55
7.09 Withdrawals During Employment............................ 58
7.10 Loans to Members......................................... 60
7.11 Discharge of Trustees' Obligation to Make Payments....... 64
7.12 Qualified Domestic Relations Order....................... 65
7.13 Procedures for Direct Rollovers to an Eligible
Retirement Plan.......................................... 65
7.14 Transfer to Other Qualified Plan......................... 68
ARTICLE VIII. AMENDMENT AND TERMINATION................................ 68
8.01 Right to Amend or Terminate.............................. 68
8.02 Amendment for Tax Exemption.............................. 69
8.03 Liquidation of Trust in Event of Termination............. 70
8.04 Termination of Plan and Trust............................ 70
8.05 Amendment of Vesting Schedule............................ 70
ARTICLE IX. ADMINISTRATION OF THE PLAN............................... 71
9.01 Named Fiduciaries........................................ 71
9.02 Appointment of Committee................................. 72
9.03 Powers of Committee...................................... 73
9.04 Action by Committee...................................... 73
9.05 Discretionary Action..................................... 74
9.06 Evidence on Which Committee May Act...................... 74
9.07 Employment of Agents..................................... 74
9.08 Compensation and Expense of Committee.................... 75
9.09 Indemnification of Committee Members..................... 75
ARTICLE X. THE TRUSTEES............................................. 76
10.01 Powers of Trustees....................................... 76
10.02 Investments.............................................. 76
10.03 Method of Holding, Buying, and Selling Securities........ 77
10.04 Exercise of Rights....................................... 77
10.05 Reliance on Trustees as Owners........................... 78
10.06 Liquidation of Assets.................................... 78
10.07 Direction by Committee................................... 78
10.08 Records and Accounting................................... 79
10.09 Payment of Taxes......................................... 80
10.10 Trustees' Compensation and Expenses...................... 81
10.11 Resignation or Removal of Trustees....................... 81
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<PAGE> 5
Page(s)
10.12 Indemnification of Trustee............................... 82
ARTICLE XI. THE COMPANY.............................................. 82
11.01 No Contract of Employment................................ 82
11.02 No Contract to Maintain Plan............................. 83
11.03 Liability of the Company................................. 83
11.04 Action by the Company.................................... 83
11.05 Successor to Business of the Company..................... 84
11.06 Dissolution of the Company............................... 84
ARTICLE XII. ADDITIONAL PARTICIPATING COMPANIES....................... 85
12.01 Participation............................................ 85
12.02 Effective Date........................................... 85
12.03 Administration........................................... 85
12.04 Termination.............................................. 86
ARTICLE XIII. TOP-HEAVY PROVISIONS..................................... 86
13.01 General Rule............................................. 86
13.02 Minimum Contribution Provisions.......................... 86
13.03 Top-Heavy Plan Definition................................ 87
13.04 Key Employee............................................. 90
13.05 Non-Key Employee......................................... 90
13.06 Limitation on Contributions.............................. 90
ARTICLE XIV. MISCELLANEOUS............................................ 90
14.01 Spendthrift Provision.................................... 90
14.02 Appointment of Person to Receive Payment................. 91
14.03 Construction............................................. 91
14.04 Impossibility of Performance............................. 91
14.05 Definition of Words...................................... 92
14.06 Titles................................................... 92
14.07 Merger or Consolidation.................................. 92
14.08 Claims Procedure......................................... 92
14.09 Effective Date of Amendment and Restatement.............. 93
14.10 Execution of Agreement................................... 93
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<PAGE> 6
PROFIT-SHARING RETIREMENT PLAN AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO. INCORPORATED
This Trust Agreement is made effective as of the 1st day of January,
1989, by and between Sutro & Co. Incorporated, a California corporation having
its principal place of business in San Francisco, California (hereinafter called
the "Company"), and the individuals who have signed below as Trustees
(hereinafter called the "Trustees"), to be effective as of January 1, 1989.
WITNESSETH THAT:
WHEREAS, the Company recognizes the contribution being made to the
successful operation of its business by its employees and desires to reward such
contribution and therefore established a qualified plan entitled "Sutro Tax
Deferred Voluntary Investment Plan" and a separate-trust agreement to accompany
said plan entitled "Employee's 401(k) Trust," which have been subsequently
amended from time to time; and
WHEREAS, such restated Plan document, as subsequently amended, was
submitted to the Internal Revenue Service ("IRS") pursuant to an application for
issuance of a favorable determination letter as to the qualified status of the
Plan; and
WHEREAS, the IRS issued a favorable determination letter covering
such document; and
<PAGE> 7
WHEREAS, the determination letter is conditioned upon adoption by the
Company of certain amendments ("IRS Amendments") submitted to the IRS in
connection with the processing of the determination letter application; and
WHEREAS, the Company now desires to amend and completely restate the
Plan to incorporate such IRS Amendments.
NOW, THEREFORE, the Company and the Trustees, each in consideration of
the covenants, agreements, and declarations of the other, mutually covenant,
agree, and declare as follows:
ARTICLE I.
INTRODUCTION
1.01 CREATION OF TRUST. There has been hereby established a trust
known as the "Profit-Sharing Retirement Trust for Employees of Sutro & Co.
Incorporated" (formerly known as the "Employee's 401(k) Trust") (the "Trust").
The Trustees shall receive any contributions paid to the Trust and all
contributions so received, together with the income therefrom, shall be held,
managed, and administered as a fund in trust pursuant to the terms of this
Agreement. The Trustees hereby confirm their acceptance of the Trust created
hereunder and agree to perform the provisions of this Agreement on their part to
be performed.
1.02 INTERPRETATION OF TRUST AGREEMENT. The Trust is established for
the exclusive benefit of the eligible Employees and their Beneficiaries. So far
as possible, this Agreement shall be interpreted in a manner consistent with
this intent and with the intent of the Company that the Trust established
hereunder shall continue to satisfy those
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<PAGE> 8
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and
of the Internal Revenue Code of 1986 (the "Code") relating to qualified plans
and exempt employees' trusts, as either of them may from time to time be
amended. Except as otherwise provided in Section 4.06 hereof, under no
circumstances shall any property, whether corpus or income of the Trust
hereunder, or any funds contributed to the Trust, ever revert to or be used or
enjoyed by the Company or be used for any purpose other than for the exclusive
benefit of the eligible Employees or their Beneficiaries.
ARTICLE II.
DEFINITIONS
Whenever used in this Agreement, unless the context clearly indicates
otherwise, the following words shall have the following meanings:
2.01 "AFFILIATE COMPANY" means (a) a corporation which, together with
the Company, is a member of a controlled group of corporations (as defined in
section 414(b) of the Code), (b) a trade or business (whether or not
incorporated) which is under common control (as defined in section 414(c) of the
Code) with the Company, (c) a corporation, partnership, or other entity which,
together with the Company, is a member of an affiliated service group (as
defined in section 414(m) of the Code), or (d) any entity required to be
aggregated with the Company under section 414(o) of the Code.
2.02 "AGREEMENT" means this Agreement, as amended from time to
time.
2.03 "ANNIVERSARY DATE" means December 31 in each year.
2.04 "BENEFICIARY" means the person or persons designated by a
Participant, pursuant to the provisions of Section 7.04 of this Agreement, to
receive
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<PAGE> 9
distribution of such Participant's share upon his death, and includes a
co-beneficiary or a contingent beneficiary. The term "Beneficiary" also includes
a Participant's surviving spouse if such spouse is deemed to be such
- -Participant's Beneficiary pursuant to Section 7.04.
2.05 "BOARD OF DIRECTORS" means the board of directors of the Company
in office from time to time or the Management Committee of such board, with
respect to such powers as have been delegated to it by the Board.
2.06 'BREAK IN SERVICE" means any Plan Year during which an Employee
has not completed or been credited with more than five hundred (500) Hours of
Service with the Company and/or an Affiliated Company.
2.07 "COMMITTEE" means the Administrative Committee constituted under
Article IX of this Agreement in office from time to time.
2.08 "COMPANY" means Sutro & Co. Incorporated and also means any
successor to all or a major portion of its business which adopts this Plan and
Trust pursuant to Section 11.05.
2.09 "COMPANY CONTRIBUTIONS" means the contributions, if any, made by
the Company pursuant to Section 4.04.
2.10 "COMPENSATION" means compensation, except as hereinafter defined,
paid by the Company to the Participant for the Plan Year which is required to be
reported as wages on the Participant's Form W-2. For purposes of this Section,
Compensation shall be determined as described below:
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<PAGE> 10
(a) Compensation shall include amounts contributed by the
Company pursuant to a salary reduction agreement which are excludible from an
Employee's gross income under Code Section 125 (pertaining to cafeteria plans),
Code Section 402(e)(3) (pertaining to Code Section 401(k) salary reductions),
Code Section 402(h) (pertaining to simplified employee pensions) and Code
Section 403(b) (pertaining to tax sheltered annuities) and shall not include any
amounts includible on Form W-2 which are attributable to any group insurance or
other employee welfare plan.
(b) Compensation taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed One Hundred
Fifty Thousand Dollars ($150,000) as adjusted at the time and in such manner as
permitted under Code Section 401(a)(17)(B). Notwithstanding the foregoing, (i)
for Plan Years beginning prior to January 1, 1994, Compensation taken into
account for determining all benefits provided under the Plan for any Plan Year
shall not exceed Two Hundred Thousand Dollars ($200,000) as adjusted in such
manner as permitted under Code Section 415(d) and shall be determined as of the
first day of such Plan Year; and (ii) for Plan Years beginning prior to January
1, 1989, the Two Hundred Thousand Dollars ($200,000) limitation shall apply to
Top Heavy Plan Years and shall not be adjusted. In the event of a Short Plan
Year, the dollar limitation shall be multiplied by the Short Plan Year Fraction.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age nineteen
(19) before the end of
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<PAGE> 11
the Plan Year. If as a result of the application of such rules the dollar
limitation is exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if the Plan provides for permitted
disparity) the dollar limitation shall be prorated among the affected
participants in proportion to each such Participant's Compensation as determined
under this Section prior to the application of the dollar limitation.
The One Hundred Fifty Thousand Dollars ($150,000) Compensation
limit and the Two Hundred Thousand Dollars ($200,000) Compensation limit apply
to the combined compensation of the Employee and of any Family Member aggregated
with the Employee under IRC section 414(q) who is either (1) the Employee's
spouse; or (2) the Employee's lineal descendants under the age of nineteen (19).
If the Compensation limitation is applied to the combined Compensation of the
Employee and one or more Family Members, the contribution allocation provisions
of Article VI shall be applied by prorating the Compensation limitation among
the affected individuals in proportion to each individual's Compensation
determined prior to the application of this limitation.
2.11 "ELIGIBLE RETIREMENT PLAN" means:
(a) an individual retirement account described in Code
Section 408(a);
(b) an individual retirement annuity described in Code
Section 408(b);
(c) an employees' trust described in Code Section 401(a)
that is exempt from tax under Code Section 501(a); or
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<PAGE> 12
(d) an annuity plan described in Code Section 403(a).
2.12 Eligible Rollover Distribution' means any distribution occurring
after December 31, 1992 to a Participant of all or a portion of his or her
benefits under the Plan except:
(a) A distribution which is one of a series of substantially
equal periodic payments made over the life expectancy of the Participant or the
joint life expectancies of the Participant and his or her designated beneficiary
or over a period of ten (10) years or more. The determination of whether or not
a distribution is one of a series of substantially equal periodic payments shall
generally be made at the time as payments begin without regard to contingencies
or modifications that have not yet occurred, and social security supplements
under Code Section 411(a)(9) shall be disregarded for this purpose;
(b) A distribution that is required under Code Section
401(a)(9);
(c) Any portion of a distribution that is not includible in
the recipient's gross income (determined without regard to the exclusion for net
unrealized appreciation described in Code Section 402(e)(4));
(d) Loans to Participants that are (1) treated as
distributions under Code Section 72(p) and not excepted by Code Section
72(p)(2); or (2) are in default and are deemed distributions to the Participant;
(e) Returns of elective deferrals under Code Section
401(k) as a result of Code Section 415 limitations;
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<PAGE> 13
(f) Corrective distributions of excess contributions and
excess deferrals under Regulation Sections 1.401(k)-1(f)(4) and 1.402(g)-l(e)(3)
or corrective distributions of excess aggregate contributions under Regulation
Section 1.401(m)-l(e)(3), together with the income allocable to these
distributions;
(g) The cost of life insurance coverage, i.e., T.S. 58"
costs; and
(h) Similar items designated by the Commissioner of Internal
Revenue in revenue rulings, notices, and other guidance of general
applicability.
2.13 "EMPLOYEE" means any person who is employed by the Company,
excluding employees who are non-resident aliens whose compensation constitutes
foreign source income for United States federal income tax purposes. An
Employee's employment shall be deemed to have commenced on the date on which he
first performs an Hour of Service as an Employee.
2.14 "EXCESS AGGREGATE CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of:
(a) Matching Contributions, Qualified Nonelective
Contributions and/or Qualified Matching Contributions actually taken into
account in computing the Actual Contribution Percentages of Highly
Compensated Employees for such Plan Year, over
(b) The maximum amount of such Matching Contributions
permitted under the Actual Contribution Percentage Test as determined by
reducing such Matching Contributions made on behalf of Highly Compensated
Employees in order of their Actual Contribution Percentages, beginning with the
highest of such ratios.
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<PAGE> 14
Such determination shall be made after first determining
Excess Contributions pursuant to this Section.
2.15 "EXCESS CONTRIBUTIONS" means, with respect to any Plan
Year, the excess of:
(a) The Defined Contributions, Qualified Nonelective
Contributions and/or Qualified Matching Contributions actually taken into
account in computing the Actual Deferral Percentages of Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such Tax Deferred Contributions
permitted under the Actual Deferral Percentage Test as determined by reducing
such Tax Deferral Contributions made on behalf of Highly Compensated Employees
in order of their Actual Deferral Percentages, beginning with the highest of
such percentages.
2.16 "FAMILY MEMBER" means an individual who is described as such in
section 414(q)(6)(B) of the Code and who is a Participant of the Plan.
2.17 "HIGHLY COMPENSATED EMPLOYEE." The term Highly Compensated
Employee includes highly compensated active employees and highly compensated
former-employees.
A highly compensated active employee included any employee who
performs service for the Company during the determination year and who, during
the look-back year: (i) received compensation from the Company in excess of
Seventy-Five Thousand Dollars ($75,000) (as adjusted pursuant to Section 415(d)
of the Code); (ii) received compensation from the Company in excess of Fifth
Thousand Dollars ($50,000)
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<PAGE> 15
(as adjusted pursuant to Section 415(d) of the Code) and was a member of the
top-paid group for such year; or (iii) was an officer of the Company and
received compensation during such year that is greater than fifty (50%) of the
dollar limitation in effect under Section 415(b)(1)(A) of the Code.
The term Highly Compensated Employee also includes: (i)
employees who are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back year" and the
employee is one of the one hundred (100) employees who received the most
compensation from the Company during the determination year; and (ii) employees
who are five percent (5%) owners at any time during the look-back year or
determination year.
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back year, the highest
paid officer for such year shall be treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the twelve (12) month period immediately
preceding the determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, performs no service for the Company during the determination
year, and was a highly compensated active employee for either the separation
year or any determination year ending on or after the employee's fifty-fifth
(55th) birthday.
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<PAGE> 16
If an employee is, during a determination year or look-back
year, a family member of either a five percent (5%) owner who is an active or
former employee or a Highly Compensated Employee who is one of the ten (10) most
highly compensated employees ranked on the basis of compensation paid by the
Company during such year, then the family member and the five percent (5%) owner
or top-ten highly compensated employee shall be aggregated. In such case, the
family member and five percent (5%) owner or top-ten Highly Compensated Employee
shall be treated as a single employee receiving compensation and Plan
contributions or benefits equal to the sum of such member and five percent (5%)
owner or top-ten highly compensated employee. For purposes of this section,
family member includes the spouse, lineal ascendants and descendants of the
employee or former employee and the spouse of such lineal ascendant and
descendants.
The determination of who is a Highly Compensated Employee,
including the determination of the number and identity of employees in the
top-paid group, the top one hundred (100) employees, the number of employees
treated as officers and the compensation that is considered, win be made in
accordance with Section 414(g) of the Code and the regulations thereunder.
If elected by the Company for a Plan Year, the preceding sentence will
be modified by substituting Fifty Thousand Dollars ($50,000) for Seventy-Five
Thousand Dollars ($75,000) in (i) and by disregarding (ii). This simplified
definition of highly compensated employee will apply only to Companies that
maintain significant business .- activities (and employ employees) in at least
two significantly separate geographic areas.
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<PAGE> 17
2.18 "HOURS OF SERVICE" means:
(a) Each hour for which an employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliated Company for the
performance of duties. These hours shall be credited to the employee for the
Plan Year(s) in which the duties are performed; and
(b) Each hour for which an employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliated Company on account
of a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty or other similar
reason. These hours shall be calculated and credited pursuant to section
2530.200b-2 of the Department of Labor Regulations which are incorporated herein
by reference; and
(c) Each hour for which back pay, irrespective of mitigation
of damages, has been either awarded or agreed to by the Company or an Affiliated
Company. The same hours shall not be credited under both paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These hours
shall be credited to the employee for the Plan Year(s) to which the award or
agreement pertains rather than the Plan Year in which the award, agreement or
payment is made; and
(d) Each hour credited, at the rate of forty (40) hours per
week for each week involved, for the following periods of time:
(i) Unpaid periods of absence authorized by the Company
in accordance with standard personnel policies of the Company,
provided the
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<PAGE> 18
Employee returns to employment with the Company immediately upon the
expiration of such authorized absence;
(ii) Unpaid military leave while the Employee's
reemployment rights are protected by law, provided the Employee
returns to employment with the Company within the period prescribed by
law.
Solely for purposes of determining whether a Break in Service
has occurred in a Plan Year, an Employee who is absent from work by reason of
pregnancy, birth or adoption of a child, or for purposes of caring for such
child for a period beginning immediately following such birth or adoption shall
receive credit for the Hours of Service which would otherwise have been credited
to such Employee but for such absence, or in any case in which such hours cannot
be determined, eight (8) Hours of Service per day of such absence, provided,
however, that the number of Hours of Service credited under this paragraph shall
not exceed the difference between 501 and the number of Hours of Service with
which such Employee would have been credited for the Plan Year to which this
paragraph is applicable. The Hours of Service credited under this paragraph
shall be credited in the first Plan Year in which such credit is necessary to
avoid a Break in Service.
2.19 "INVESTMENT MEDIA" means such marketable securities and/or money
market mutual funds, and in such amounts, as are specifically selected and
specified by a Participant in directions to the Trustees (in such form as may be
acceptable to the Trustees) for the investment of assets held in a Self-Directed
Account pursuant to Section 5.09. The Trustees may designate one or more
Investment Media which are
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<PAGE> 19
sponsored and/or managed by the Company or any Affiliated Company. For
investments made after February 1, 1993, the following types of investments are
not permitted under any circumstances: unhedged short options; limited
partnership interests except Company sponsored employee limited partnerships;
stocks with a value of less than $5, unless on the current recommended Buy List
of the Company, its Affiliates or selected Research Correspondents, and in no
case stocks with a value of less than $2; investments in bonds or convertibles
rated less than Baa/BBB. A below investment grade bond OR convertible can be
approved if the Company has (a) a common stock which is recommended for purchase
or rated attractive or hold by either Sutro, Tucker Anthony or our national
correspondent or, (b) a bond or convertible which has been internally reviewed
by our Research Department which rates the bond or convertible as a buy or hold.
2.20 "LEASED EMPLOYEES." The Plan treats a Leased Employee as an
Employee of the Company. A Leased Employee is an individual (who otherwise is
not an Employee of the Company) who, pursuant to a Leasing Agreement between the
Company and any other person, has performed services for the Company (or for the
Company and any persons related to the Company within the meaning of IRC section
144(a)(3) on a substantially full-time basis for at least one year and who
performs services historically performed by Employees in the Company's business
field. If the Leased Employee is treated as an Employee by reason of this
section, "Compensation" includes compensation from the leasing organization
which is attributable to services performed for the Company.
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<PAGE> 20
The Plan does not treat a Leased Employee as an Employee if
the leasing organization covers the Employee in a safe harbor plan and, prior to
the as application of the safe harbor plan exception, twenty percent (20%) or
less of the Company's Employees (other- than highly compensated Employees) are
Leased Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least ten percent (10%) of the Employee's
Compensation without regard to employment by the leasing organization on a
specified date. The safe harbor plan must determine the ten percent (10%)
contribution on the basis of Compensation as defined in section 415(c) of the
Code, plus elective contributions.
The Committee must apply this section in a manner consistent
with sections 414(n) and 414(o) of the Code and regulations issued thereunder.
The Committee will reduce the Leased Employee's allocation of Employer
Contributions under this plan by the Leased Employee's allocation under the
leasing organizations) plan, but only to the extent that allocation is
attributable to the Leased Employee's service provided to the Employer. The
leasing organization's plan must be a money purchase plan which would satisfy
the definition under this section of a safe harbor plan.
2.21 "MATCHING CONTRIBUTIONS" means the contributions made by the
Company pursuant to Section 4.02.
2.22 "NET PROFITS" means the net profits of the Company as determined
in accordance with sound accounting practices, after making such adjustments and
estimates as may be appropriate, but before provision for any federal or state
taxes based
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<PAGE> 21
upon or measured by income and before Company Contributions to this
Plan. In computing net profits and accumulated earnings, there shall be excluded
net gains or losses on the sale or other disposition or revolution of securities
bought for capital appreciation by the Company. Such determination shall be
final and shall not be subject to revision by reason of any subsequent
adjustments affecting accounts or estimates involved.
2.23 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who is
neither Highly Compensated Employee nor a family member of such whose
compensation and any employer contributions allocated on his or her behalf is
required to be aggregated with a Highly Compensated Employee.
2.24 "NORMAL RETIREMENT AGE" means age sixty-five (65).
2.25 "PARTICIPANT" means an Employee who is eligible to participate in
the Plan as determined under Article III of the Plan.
2.26 "PLAN" means the "Profit-Sharing Retirement Plan for
Employees of Sutro, & Co. Incorporated" as set forth herein, together with
any and all amendments hereto.
2.27 "PLAN YEAR' AND 'LIMITATION YEAR" mean the fiscal year of the
Trust, being the twelve (12) months ending on each Anniversary Date.
2.28 "QUALIFIED MATCHING CONTRIBUTIONS" means Company contributions
described in Section 4.03(d) and which meet the requirements of Treasury
Regulations Section 1.401(k)-1(g)(13)(iii).
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<PAGE> 22
2.29 "QUALIFIED NONELECTIVE CONTRIBUTIONS" means Company contributions
described in Section 4.03(d) and which meet the requirements of Treasury
Regulations Section 1.401(k)-l(g)(13)(iii).
2.30 "SALARY REDUCTION AGREEMENT" means the agreement entered into
between the Company and an Employee pursuant to the provisions of Section 3.04.
2.31 "SELF-DIRECTED ACCOUNT" means an account established for the
investment and reinvestment of Tax Deferred Contributions, Voluntary
Contributions, Rollover Contributions and vested Matching Contributions upon the
authorization of the Committee. Said Account may be invested only in authorized
Investment Media. 2.32 'Tax Deferred Contributions' means the contributions made
by the Company pursuant to section 4.01 of the Plan in consideration of a
Participant's agreement to reduce his cash Compensation by a comparable amount
pursuant to a Salary Reduction Agreement.
2.33 "TRUST" means the trust fund created by this Agreement, including
all Investment Media, and held by the Trustees hereunder, into which all
contributions and income thereon shall be paid and out of which all payments and
distributions shall be made.
2.34 "TRUSTEES" means the individuals named herein as trustees and any
duly appointed successor trustee or trustees.
2.35 "VALUATION DATE" means the Anniversary Date and, with respect to
each Investment Medium, each other date which the Committee in its sole
discretion selects for the revolution of that Investment Medium.
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<PAGE> 23
2.36 "VOLUNTARY CONTRIBUTIONS" shall mean the amounts contributed by a
Participant in accordance with Section 4.07.
2.37 "YEAR OF SERVICE" means one (1) year of an employee's employment
with the Company, and any Affiliated Company, whether or not continuous;
provided, however, that the determination of Years of Service will be subject to
the following rules:
(a) The computation of Years of Service will be made on the
basis of Hours of Service performed by the employee during each Plan Year. An
employee will be-considered to have completed one (a) Year of Service with
respect to his employment during any Plan Year if and only if such employee
completes at least 1,000 Hours in such Plan Year. Notwithstanding the foregoing,
an employee's Years of Service with respect to a period of employment prior to
January 1, 1989 shall in no event be less than such employee's Years of Service
as determined under the Plan as in effect on December 31, 1988.
(b) In any case in which an individual becomes an Employee by
reason of the acquisition of his prior employment by the Company, whether by
merger, acquisition of assets or stock or otherwise, his service with such prior
employer shall be included in determining his Years of Service hereunder only to
the extent that such service is required to be credited hereunder by section
414(a) of the Code and any regulations promulgated thereunder, by the terms of
the agreement pursuant to which such prior employer was acquired by the Company
or by a vote of the Board.
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<PAGE> 24
(c) In the event an Employee terminates his employment and is
subsequently reemployed, such Employee's Years of Service completed prior to
such termination shall be restored upon reemployment.
ARTICLE III.
PARTICIPATION
3.01 ELIGIBILITY FOR PARTICIPATION. Each Employee who was a
Participant on December 31, 1988, shall continue to be a Participant on January
1, 1989, provided he is still employed by the Company on that date. Each other
Employee, including each Employee hired on or after January 1, 1989, shall
become a Participant under the Plan on the first day of the month following the
month in which he completes three (3) Months-of Service except for (a) an hourly
paid employee who is not classified as regular; (b) an employee who has not
reached the age of 21; and (c) an employee who is represented by a collective
bargaining agreement where retirement benefits were the subject of good faith
negotiations between employer and employee representative. For purposes of this
Section 3.01 an Employee shall be deemed to have completed three (3) Months of
Service if he or she has completed one Hour of Service with the Company, or any
Affiliated Company, during the period commencing with the Employee's employment
commencement date and ending with the date on which falls the three-month
anniversary of the Employee's employment commencement date. For purposes of this
Section 3.01, the following terms shall be defined as follows: (a) an "hourly
paid employee not classified as regular" shall mean an employee who is paid on
an hourly basis and who has not been designated by the Company as a regular
employee including, but not limited to,
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any employee in one of the following categories: cold caller, registered cold
caller, registered dialer, legal researcher, project sales assistant, project
registered sales assistant, clerk, file clerk hired after December 31, 1994,
data entry clerk hired after December 31, 1993, valuation clerk, marketing
assistant, branch administrator hired before June 30, 1996, dining services
administrator, catering assistant, supervisory analyst, intern, registered
intern, telemarketer; (b) "employment commencement date" shall mean the first
day on which an Employee accrues an Hour of Service. Notwithstanding the
foregoing, for the Plan Year ending December 31, 1995, an Employee who is an
hourly paid employee not classified as regular shall become a Participant under
the Plan on the first day of the month following the month in which he completes
1,000 Hours of Service in an eligibility computation period or a shorter period
of time. For. purposes of the foregoing, an Employee's initial eligibility
..computation period shall be the twelve consecutive month period beginning on
the Employee's employment commencement date, and subsequent eligibility
computation periods shall be the Plan Year with the first such Plan Year
including the first anniversary of the Employee's employment commencement date.
3.02 DETERMINATION OF ELIGIBILITY BY COMMITTEE. The determination of
an Employee's eligibility for membership under the Plan shall be made by the
Committee from the Company's records, and the Committee's decisions on these
matters shall be conclusive and binding upon all persons.
3.03 DURATION OF ELIGIBILITY. A Participant shall continue as an
active Participant until his termination of employment with the Company and,
except as
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otherwise specifically provided herein, shall cease to be an active Participant
entitled to share in contributions hereunder upon such termination of
employment. To the extent a former Participant's accounts have not been fully
distributed, such former Participant shall be treated as a Participant for
purposes of applying the provisions of the Plan to such accounts. A former
Participant shall once again become an active Participant under the Plan on the
date on which he again becomes an Employee.
3.04 SALARY REDUCTION AGREEMENT. Each Participant may, but shall not
be required to, enter into a Salary Reduction Agreement with the Company. The
terms of any such Salary Reduction Agreement shall provide that such Participant
agrees to accept a reduction in cash Compensation from the Company, in an amount
equal to any whole number percentage of his Compensation, in consideration of
the Company's agreement to contribute an equal amount into the Trust on his
behalf; provided, such salary reduction percentage shall not exceed fifteen
percent (15%) of his Compensation; and provided further, such reduction shall
not exceed the dollar amount that is established from time to time by the
Secretary of the Treasury under section 402(g) of the Code for any calendar
year. A Salary Reduction Agreement made by a Participant immediately upon
satisfaction of the Eligibility Requirements shall be effective for the
Participant's first pay period in the month which begins not less than fifteen
(15) days (or such shorter period that the Committee allows) after the delivery
of such Salary Reduction Agreement to the Company. A Salary Reduction Agreement
made by a Participant who has previously satisfied the eligibility requirements,
and any subsequent changes to a Participant's Salary Reduction Agreement, shall
become effective as of the first pay period of any calendar
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quarter. At any time a Participant by giving fifteen (15) days' notice (or such
shorter period that the Committee allows) may completely suspend the Salary
Reduction Agreement. The salary reduction percentage in effect at any time shall
continue in effect unless and until changed in accordance with the provisions of
the preceding sentences.
ARTICLE IV.
CONTRIBUTIONS UNDER THE PLAN
4.01 TAX DEFERRED CONTRIBUTIONS. The Company shall make a Tax Deferred
Contribution to the Trust for each Compensation pay period on behalf of each
Participant who has entered into a Salary Reduction Agreement, equal to the
amount specified in said Salary Reduction Agreement. Notwithstanding anything
herein to the contrary, Tax Deferred Contributions shall be subject to the
limitations described in Article VI of the Plan.
4.02 MATCHING CONTRIBUTIONS.
(a) Beginning with the calendar quarter commencing October 1,
1996, and for each subsequent calendar quarter that the Plan is in effect, the
Company shall determine whether it shall make a Matching Contribution to the
Trust under the Plan for each eligible Participant for whom the Company made Tax
Deferred Contributions during such calendar quarter in accordance with the
following rules:
(i) If the Company's pre-tax Net Profits for a calendar
quarter equal or exceed Two Hundred Fifty Thousand Dollars ($250,000),
the Company shall make a Matching Contribution equal to one hundred
percent (100%) of each eligible Participant's Tax Deferred
Contributions made during
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such calendar quarter, not to exceed the lesser of (i) three percent
(3%) of the Participant's Compensation during such calendar quarter, or
(ii) Seven Hundred Fifty Dollars ($750) per calendar quarter (or Three
Thousand Dollars ($3,000) annually).
(ii) If the Company's pre-tax Net Profits for a calendar
quarter are less than Two Hundred Fifty Thousand Dollars ($250,000),
the Company may make a Matching Contribution up to one hundred percent
(100%) of each eligible Participant's Tax Deferred Contributions made
during such calendar quarter, not to exceed the lesser of (i) three
percent (3%) of the Participant's Compensation during such calendar
quarter, or (ii) Seven Hundred Fifty Dollars ($750) per calendar
quarter (or Three Thousand Dollars ($3,000) annually). The Company, in
its discretion, shall determine whether to make a Matching
Contribution for a calendar quarter under this Section 4.02(a)(ji)
and, if so, the exact amount or percentage of such Matching
Contribution.
For purposes of this Section 4.02(a), the Net Profits threshold
shall be determined on a calendar quarter by calendar quarter basis, with no
carryover or carryback of profits to or from any other calendar quarter. The
Company's Matching Contribution for any Plan Year shall be reduced by the amount
of forfeitures available for that Plan Year pursuant to Section 7.05. A
Participant shall be eligible for the Matching Contribution provided by this
Section 4.02(a), if, and only if, such Participant either (A) is an Employee on
the last day of the calendar quarter for which the Matching
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Contribution is made, or (B) died, retired on or after his Normal Retirement
Age, or became disabled (within the meaning of Section 7.03) during such
calendar quarter. However, if in any year a Participant's Tax Deferred
Contributions are funded to the maximum amount allowable under section 402(g) of
the Code in a period less than the four calendar quarters of that year, Matching
Contributions shall be determined and allocated as though such Tax Deferred
Contributions were made ratably over each of the four calendar quarters.
(b) Notwithstanding the foregoing, beginning with the calendar
quarter commencing January 1, 1990, and for each subsequent calendar quarter
through the calendar quarter ending September 30, 1996, the Company shall make a
Matching, Contribution to the Trust under the Plan for each eligible Participant
for whom the Company made Tax Deferred Contributions during said calendar
quarter, equal to one hundred percent (100%) of the Participant's Tax Deferred
Contributions made during such calendar quarter, not to exceed the lesser of (i)
three percent (3%) of the Participant's Compensation during such calendar
quarter, or (ii) Seven Hundred Fifty Dollars ($750) per quarter (Three Thousand
Dollars ($3,000) annually), provided that Company's pre-tax Net Profits for that
quarter equal or exceeded Two Hundred Fifty Thousand Dollars ($250,000). For
purposes of this Section 402(b), the Net Profits threshold shall be determined
on a calendar quarter by calendar quarter basis, with no carryover or carryback
of profits to or from any other calendar quarter. The Company's Matching
Contribution for any Plan Year shall be reduced by the amount of forfeitures
available for that Plan Year pursuant to Section 7.05. A Participant shall be
eligible for the Matching
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Contribution provided by this Section 4.02(b) if, and only if, such Participant
either (A) is an Employee on the last day of the calendar quarter for which the
Matching Contribution is made, or (B) died, retired on or after his Normal
Retirement Age, or became disabled (within the meaning of Section 7.03) during
such calendar quarter. However, if in any year a Participant's Tax Deferred
Contributions are funded to the maximum amount allowable under section 402(g) of
the Code in a period less than the four calendar quarters of that year, Matching
Contribution win be determined and allocated as though such Tax Deferred
Contributions were made ratably over each of the four calendar quarters.
(c) Notwithstanding the foregoing, for the 1989 Plan Year,
Matching Contributions shall be made for each Participant equal to one hundred
percent (100%) of the first Five Hundred Dollars ($500) of a Participant's Tax
Deferred Contribution, plus fifty percent (50%) of the next Three Thousand
Dollars ($3,000) of a Participant's Tax Deferred Contribution.
4.03 QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED MATCHING
CONTRIBUTIONS. The Company may contribute to the Trust that amount in cash or
property which the Company, in its sole discretion, determines to be a proper
contribution, and which shall be allocated pursuant to Section 5.03.
4.04 COMPANY CONTRIBUTIONS. For the 1989 Plan Year, and for each Plan
Year thereafter, the Company may in its sole discretion contribute to the Trust,
as a Company Contribution, an amount up to the sum of (1) twenty percent (20%)
of that portion of the Company's Net Profits for such Plan Year that does not
exceed twenty percent (20%) of the Compensation of all Participants and (2) ten
percent (10%) of that
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portion of such Net Profits, if any, that exceeds twenty percent (20%) of the
Compensation of all Participants. The Company may, but is not required to,
contribute such additional amount out of Net Profits or accumulated earnings as
the Company, in its sole discretion, shall determine. The amount of the
Company's Contribution shall be determined by the Company's Board of Directors,
in its discretion, as soon as practicable after the end of each Plan Year.
Company Contributions shall be allocated to Participants in the Plan as of the
last day of the Plan Year, and a Participant must be employed on such day in
order to receive such an allocation. The Plan Year for which each such Company
Contribution is made shall be designated at the time of the contribution.
4.05 PAYMENT OF CONTRIBUTIONS.
(a) The Tax Deferred Contributions made by the Company on
behalf of each Participant with respect to each pay period shall be paid into
the Trust by the Company not later than thirty (30) days after the last day of
each pay period and invested pursuant to the election of such Participant under
Section 5.09 of the Plan.
(b) The Matching Contributions made by the Company on behalf
of each Participant with respect to each calendar quarter shall be paid into the
Trust not later than thirty (30) days after the last day of each calendar
quarter. Matching Contributions shall be allocated to a Participant's Company
Account.
(c) The Company Contributions, if any, made by the Company on
behalf of Participants for each calendar year shall be paid into the Trust not
later than the date required for such contributions to be deductible for federal
income tax purposes for
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such Plan Year and, after being allocated among Participants pursuant to Section
5.05, shall be deposited in the Participant's Company Account.
(d) Qualified Nonelective Contributions and/or Qualified
Matching Contributions, if any, shall be deposited to the Trust not later than
the end of the twelve (12) month period immediately following the end of such
Plan Year.
4.06 REVERSION OF CERTAIN CONTRIBUTIONS MADE BY THE COMPANY. All
employer contributions made pursuant to this Plan shall be made upon the
condition that such contributions are fully deductible for federal income tax
purposes. In the event that any such deduction is disallowed in whole or in
part, then the Company may direct the Trustees to return the amount of such
contributions (to the extent disallowed) (decreased by losses attributable to
such amount, but not including any earnings attributable to such amount) to the
Company at any time within the twelve (12)-month period commencing on the date
of disallowance. In the event that the Company shall make employer contributions
pursuant to the terms of this Plan on the basis of a mistake of fact, the
Company may direct the Trustees to return the amount of such contributions
(decreased by losses attributable to such amount, but not including any earnings
attributable to such amount) to the Company at any time within the twelve
(12)-month period commencing on the date of contribution. In no event shall the
return of a contribution hereunder cause any Participant's accounts to be
returned to less than they would have been had the nondeductible or mistaken
amount not been contributed. For purposes of this Section 4.06, the term
"employer contributions" shall include any contributions of an Employer subject
to the provisions of Section 404 of the Code.
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4.07 VOLUNTARY CONTRIBUTIONS. For Plan Years beginning prior to
January 1, 1990, a Participant may make Voluntary Contributions. A Participant's
Voluntary Contributions under all of the Employer's Plans in which the
Participant participates may not exceed five percent (5%) of the Participant's
Compensation. All Voluntary Contributions shall be deposited into the
Participant's Voluntary Contribution Account. Effective on and after January 1,
1990, no Voluntary Contributions shall be permitted under the Plan.
4.08 ROLLOVER CONTRIBUTIONS.
(a) Notwithstanding anything to the contrary elsewhere herein,
any Participant may make contributions of all or any part of (i) any amount
received by such Participant from another plan and trust qualified as an exempt
employee benefit plan and trust under sections 401(a) and 501(a) of the Code or
(ii) any amount received by such Participant out of an individual retirement
account which consists of a prior rollover contribution from a qualified
employee benefit plan which, in either case, but for such contribution to the
Plan, would have been taxable income to such Participant. Contributions under
this Section 4.08 shall be in cash or such other form of property as is
acceptable to the Trustees and as is necessary to avoid imposition of tax on the
distribution. Any such rollover contribution shall be credited to a Rollover
Account for the benefit of such Participant.
(b) An Employee, on or after January 1, 1993, with the consent
of the Committee and subject to Section 4.09 below, may authorize another
qualified plan to make a direct rollover of an Eligible Rollover Distribution to
the Plan.
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(c) Any amount transferred under this Section shall be
maintained for such Employee and shall be known as his or her "Rollover Account"
as described in Code Sections 402(c) and 408(d)(3).
4.09 CONDITIONS OF ROLLOVER.
Subject to the Committee's approval, amounts which an Employee
has received from any other employee benefit plan may, in accordance with
uniform and nondiscriminatory procedures adopted by the Committee, be
transferred by the Employee to the Plan, and if transferred, shall be credited
to such Employee's Rollover Account hereunder, provided the following conditions
are satisfied:
(a) Amounts that have been previously distributed to the
Employee from another qualified plan shall be credited to the Employee's
Rollover Account.
(b) The amounts delivered to the Committee must have
previously been received by the Employee as:
(i) an Eligible Rollover Distribution; or
(ii) a rollover from a conduit individual retirement
account or annuity which has received a rollover contribution
described in Code Section 408(d)(3).
(c) The amounts tendered must not include amounts
attributable to:
(i) Nondeductible employee contributions made to a
qualified plan by the Employee;
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(ii) Contributions to an individual retirement
account or annuity that are deductible under Code Section 219; or
(iii) A distribution required to be made under Code
Section 401(a)(9) or the incidental death benefit requirement of Code
Section 401(a)(9)(G).
(d) The transfer to the Plan of amounts described in
subsection (b) will only be accepted if the Employee presents to the Committee
the Internal Revenue Service Form 1099, or equivalent evidence, and any other
evidence as the Committee may require to ensure that the receipt of the amount
win not adversely affect the qualified status of the Plan.
(e) Amounts must be received by the Committee not later than
60 days after a distribution was received by the Employee.
4.10 TRANSFERS FROM OTHER PLANS. This Plan shall not accept any direct
or indirect transfer from a defined benefit plan or from a defined contribution
plan which is subject to the funding standards of Section 412 of the Code.
ARTICLE V.
PARTICIPANTS' ACCOUNTS;
ALLOCATION OF ASSETS AND CONTRIBUTIONS;
PARTICIPANTS' INVESTMENT ELECTIONS
5.01 PARTICIPANTS' ACCOUNTS. The Committee shall maintain the
following accounts for each Participant under the Plan: (a) a Tax Deferred
Account to which Tax Deferred Contributions made by the Company for the benefit
of such
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Participant shall be credited; (b) a Company Account to which Matching
Contributions and Company Contributions made by the Company for the benefit of
such Participant shall be credited; (c) a Qualified Nonelective Contribution
Account to which Qualified Nonelective Contributions and Qualified Matching
Contributions made by the Company for the benefit of such Participant shall be
credited; (d) a Voluntary Contribution Account to which Voluntary Contributions
made by such Participant prior to January 1, 1990, shall be credited; and (e) a
Rollover Account to which rollover contributions made by the Participant
pursuant to section 407 of the Code shall be credited; provided, however, that
if a Participant made Rollover Contributions prior to January 1, 1989, which are
invested in a Self-Directed Account, a separate Rollover Account shall be
maintained with respect thereto. The rights of each Participant to the amounts
allocated to his Tax Deferred, Voluntary and Rollover Accounts shall be fully
vested and nonforfeitable at all times.
5.02 ALLOCATION OF TAX DEFERRED CONTRIBUTIONS. At the time of payment
of any Tax Deferred Contributions to the Trust, the Committee shall deliver to
the Company a schedule showing the name of each Participant and the amount of
Tax Deferred Contributions made on his behalf. The schedule shall also contain
such other information as the Committee may reasonable require for the proper
administration of the Plan. Upon receiving all such schedules with respect to
pay period ending on a Valuation Date and after the account balances of the
Participants have been adjusted as provided in Section 5.07, the Committee shall
credit to the Tax Deferred Account of each Participant listed on such schedules
the amount of Tax Deferred Contributions made to the Trust on his behalf as
shown therein.
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5.03 ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS AND QUALIFIED
MATCHING CONTRIBUTIONS. A Non-Highly Compensated Participant shall be eligible
to share in Qualified Nonelective Contributions and Qualified Matching
Contributions for the Plan Year only if he or she has completed at least one (1)
Hour of Service with Employer during the Plan Year. Qualified Nonelective
Contributions and Qualified Matching Contributions shall be allocated on the
last day of the Plan Year to the Qualified Nonelective Contribution Account of
each Non-Highly Compensated Participant eligible to share in any Qualified
Nonelective Contributions and Qualified Matching Contributions for the Plan Year
in the ratio that such Non-Highly Compensated Participant's Compensation bears
to the total of all Non-Highly Compensated Participants' Compensation.
5.04 ALLOCATION OF MATCHING CONTRIBUTIONS (INCLUDING FORFEITURES). As
soon as practicable after the end of each Plan Year, the Company shall deliver
to the Committee a schedule showing the name of each Participant who (a) was an
Employee of the Company on the Anniversary Date of such Plan Year and was
credited with at least one thousand (1,000) Hours of Service during such Plan
Year, or (b) died, retired on or after Normal Retirement Age or became disabled
(within the meaning of Section 7.03) during such Plan Year and the amount of
Matching Contributions (including forfeitures) made on his behalf pursuant to
Section 4.02. The schedule shall also contain such other information as the
Committee may reasonably require for the proper administration of the Plan. Upon
receiving such schedule with respect to a Plan Year and after the account
balances of the Participants have been adjusted as of such Anniversary Date as
provided
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in Section 5.07, the Committee shall credit to the Company Account of each
Participant listed on such schedule the amount of the Matching Contributions
(including forfeitures) made to the Trust on his behalf as shown therein.
5.05 ALLOCATION OF COMPANY CONTRIBUTIONS. As soon as practicable after
the end of each Plan Year for which a Company Contribution has been made to the
Trust pursuant to Section 4.04, the Company shall deliver to the Committee a
schedule showing the name of each Participant who (a) was an Employee of the
Company on the last-day of such Plan Year and was credited with at least one
thousand (1,000) Hours of Service during such Plan Year or (b) died, retired on
or after Normal Retirement Age or became disabled (within the meaning of Section
7.03) during such Plan Year, and opposite the name of each such Participant the
amount of Compensation paid to such Participant by the Company during such Plan
Year. The schedule shall also contain such other information as the Committee
may reasonably require for the proper administration of the Plan. Upon receiving
such schedule and the total contribution, if any, made by the Company for such
Plan Year, and after the account balances of the Participants have been adjusted
as provided in Section 5.07, the Committee shall allocate a portion of the
Company Contribution for the Plan Year to the Company Account of each
Participant listed on such schedule on the following basis:
(a) Each Participant shall receive one allocation unit for
each $100 of Compensation for the Plan Year. No fractional allocation units
shall be credited, and Compensation in amounts less than $100 shall be
disregarded. For purposes of this subsection the Company may, at its sole
discretion, place a cap on the amount of
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Compensation to be considered for each Plan Year, provided that such cap be no
greater than the limitation imposed by Section 401(a)(17) of the Code.
(b) Each Participant's Company Account shall be credited with
a portion of the total Company Contribution to the Plan for such Plan Year which
bears the same ratio to such total Company Contribution as the Participant's
total allocation units for such Plan Year bear to the total allocation units of
all eligible Participant for such Plan Year. Any amount which is in excess of
the maximum set forth in Section 6.05 shall be reallocated among all other
Participants in accordance with the above procedures. Any such amount which
cannot be reallocated shall be reallocated in the following Plan Year.
5.06 ALLOCATION OF ROLLOVER CONTRIBUTIONS. After the receipt of any
rollover contribution made by a Participant and after the account balances of
the Participants have been adjusted as provided in Section 5.071, the Committee
shall credit such rollover contribution to such Participant's Rollover Account
as of the Valuation Date coincident with or next following the receipt of such
rollover contribution.
5.07 VALUATION AND ALLOCATION OF ASSETS. The Accounts of each
Participant which are maintained by the Trustees shall be valued by the Trustees
and adjusted to reflect appreciation or depredation in the value of the Trust.
AR expenses of the Trust which are allocable to a Participant Account or
Investment Medium shall be charged to such Account or Investment Medium. AR such
expenses allocable to an Investment Medium shall be charged against all
Participant Accounts in the same proportion as the amount credited to such
Participant account and invested in such Investment Medium bears to the total
amount invested in such Investment Medium. All
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such expenses allocable to a Participant Account will be charged against the
interest of such Account invested in each Investment Medium in the same
proportion as each such interest bears to the total value of the Account. Such
valuations and adjustments of the Participants' Accounts shall be made so as to
preserve for each Account of each Participant its beneficial interest in each of
the Investment Media. The value of a Participant Account as of any Valuation
Date shall be the sum of the interests of the Participant Account invested in
each Investment Medium as of the Valuation Date for each such Investment Medium
which is coincident with or immediately preceding the Valuation Date as of which
the Participant Account is being valued.
5.08 DISTRIBUTIONS AND FORFEITURES. Whenever the Trustees shall make
any distribution to or on behalf of a Participant in accordance with the
provisions of Article V11, or whenever a Participant shall forfeit all or any
portion of his Company Account in accordance with the provisions of Section
7.05, such Participant's accounts shall be charged with the amount of such
distribution or forfeiture. In the event of any distribution. or forfeiture of
less than the full amount standing to the credit of a Participant's accounts,
the amount charged against such Participant's accounts shall be charged against
such Participant's interest in the Investment Media in accordance with
administrative policies established by the Committee, or in the absence of any
such policy, on a pro rata basis. AR distributions and forfeitures shall be
based upon the value of the Participant's accounts determined as of the
Valuation Date next preceding such distribution or forfeiture. The accounts of
any Participant shall continue to be maintained under the Plan and shall
continue to share in the allocation of income, gain, losses,
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appreciation, and depreciation of assets pursuant to Section 5.07 until such
accounts have been fully distributed.
5.09 ELECTION OF INVESTMENTS.
(a) The Plan is intended to be interpreted consistent with the
requirements of Section 404(c) of ERISA and the regulations pursuant thereto.
Each Participant shall have the right to elect the manner of investment of the
amounts standing to the credit of his Self-Directed Account among the Investment
Media established under the Trust. The non-vested portion of the Matching
Contribution shall be invested by the Trustees. The Trustees shall maintain
separate records for Participant directed investments. Earnings or losses on
such investments shall be allocated solely to the Accounts of the Participant
who directed the investments.
(b) The Company, the Committee and the Trustees shall have no
responsibility for the investment elections of the Participants and shall incur
no liability on account of investing the assets of the Trust in accordance with
such directions.
(c) For purposes of this Section 5.09, all references to a
Participant shall include a former Participant and the Beneficiary of a deceased
Participant to the extent that such former Participant or Beneficiary has an
interest under the Trust.
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ARTICLE VI.
LIMITATIONS ON CONTRIBUTIONS
AND ALLOCATIONS
6.01 CONTRIBUTIONS TO BE DEDUCTIBLE. Tax Deferred Contributions,
Matching Contributions, Company Contributions, Qualified Nonelective
Contributions and Qualified Matching Contributions under the Plan with respect
to a Plan Year shall not exceed that amount which, when added to the
contributions made by the Company for that Plan Year to all other qualified
pension or profit sharing plans maintained by the Company, equals the maximum
amount allowable as a deduction by the Company pursuant to section 404 of the
Code with respect to such Plan Year.
6.02 LIMITATION ON TAX DEFERRED CONTRIBUTIONS.
(a) The Tax Deferred Contributions made by a Participant for a
Plan Year shall satisfy the test set forth in (i)(A) below, or the alternative
test set forth in (i)(B) below, and to the extent required by Treasury
Regulations under Code Section 401(m), also shall satisfy the test identified in
(ii) below:
(i) (A) the Actual Deferral Percentage for the Highly
Compensated Employees who are eligible for Tax Deferred
Contributions is not more than the Actual Deferral Percentage
for all other Employees who are eligible for Tax Deferred
Contributions multiplied by 1.25; or
(B) The excess of the Actual Deferral Percentage
for the Highly Compensated Employees who are eligible for Tax
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Deferred Contributions over the Actual Deferral Percentage for
all other Employees who are eligible for Tax Deferred
Contributions is not more than two (2) percentage points, and
the Actual Deferral Percentage for the Highly Compensated
Employees who are eligible for Tax Deferred Contributions is
not more than the Actual Deferral Percentage for all other
Employees who are eligible for Tax Deferred Contributions
multiplied by two (2).
(ii) The Actual Contribution Percentage of Highly
Compensated Employees eligible to participate in this Plan and a plan
of the Company or an Affiliated Company that is subject to the
limitations of Section 401(m) of the Code including, if applicable,
this Plan, shall be reduced in accordance with Section 6.04(b), to the
extent necessary to satisfy the requirements of Treasury Regulations
Section 1.401(m)-2.
For the purposes of this subsection (a), "Actual
Deferral Percentage" for a specified group of Employees for a Plan Year shall be
the average of the ratios calculated separately for each Employee in such group
(herein the "Actual Deferral Ratios") (A) (i) the amount of Contributions and
Qualified Matching Contributions which meet the requirements of Treasury
Regulations Section 1.401(k)-l(b)(5), and which Employer, in its sole
discretion, elects to treat as Tax Deferred Contributions for purposes of the
Actual Deferral Percentage Test and which are actually paid over to the Trust on
behalf of the Employee for such Plan Year to (B) the Employee's Compensation for
the Plan Year. In determining the deferral percentage of a
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Highly Compensated Employee who has a Family Member, the Tax Deferred
Contribution, Qualified Nonelective Contributions and Qualified Matching
Contributions made on behalf of such Highly Compensated Employee and the
Compensation of such Highly Compensated Employee shall include the Tax Deferred
Contributions, Qualified Nonelective Contributions, Qualified Matching
Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Employee for purposes of
determining the Actual Deferral Percentage for any group under the Plan to the
extent required by section 414(q) of the Code and any regulations promulgated
thereunder.
In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of Section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then this Section shall be a plied by determining the Actual
Deferral Ratios of employees as if all such plans P were a single plan, in
accordance with Treasury Regulations under Section 401(k) of the Code. For
purposes of this Section, the Actual Deferral Ratio for any employee who is a
Highly Compensated Employee under two or more Code Section 401(a) plans of the
Company or an Affiliated Company, to the extent required by Code Section 401(k),
shall be determined in a manner taking into account the elective contributions
for such employee under each of such plans.
At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Tax Deferred Contributions with
respect to
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any Participant if the Committee determines that such suspension or reduction is
necessary to cause the tests described above to be met.
(b) If the Plan fails to satisfy the Actual Deferral
Percentage Test for any Plan Year as set forth in subsection (a) above, the
Committee shall correct Excess Contributions as
set forth below:
(i) For purposes of satisfying the Actual Deferral
Percentage Test for a Plan Year, the Company, in its sole discretion,
may contribute Qualified Nonelective Contributions and/or Qualified
Matching Contributions to the Trust which shall be allocated to the
Account(s) of Employees eligible to share in Qualified Nonelective
Contributions and/or Qualified Matching Contributions for the Plan
Year in accordance with the provisions of Article 4. The amount of
Qualified Nonelective Contributions and/or Qualified Matching
Contributions taken into account as Tax Deferred Contributions for
purposes of calculating the Actual Deferral Percentages of Employees
shall be such Qualified Nonelective Contributions and/or Qualified
Matching Contributions as are necessary to satisfy the Actual Deferral
Percentage Test for the Plan Year, subject to such other requirements
as may be prescribed by the Secretary of Treasury.
(ii) To the extent Qualified Nonelective Contributions
and/or Qualified Matching Contributions are not made or are
insufficient to satisfy the Actual Deferral Percentage Test, the
Committee shall direct the Trustees to reduce the Tax Defer-red
Contributions of the Highly
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Compensated Employees in order of their deferral percentages beginning
with the highest of such percentages, to the extent necessary to cause
the Plan to meet the limitation set forth in subsection (a) above. Any
Tax Deferred Contributions so reduced, together with the income or loss
allocable thereto determined in accordance with section 401(k) of the
Code and regulations thereunder, shall be distributed to the Highly
Compensated Employee on whose behalf such contributions were made no
later than March 15 of the following Plan Year. Notwithstanding the
foregoing, the amount that would otherwise be distributed to a
Participant in accordance with the provisions of this Section 6.02
shall be reduced by the amount, if any, of the Excess Deferrals
previously distributed for the taxable year ending in the same Plan
Year. Further, the distribution of excess contributions will include
the income allocable thereto. The income allocable to excess
contributions includes both income for the Plan Year for which the
excess contributions were made and income for the period between the
end of the Plan Year and the date of distribution. For purposes of
Section 6.02(b) the income allocable to excess contributions shall be
calculated in accordance with Treasury Regulations Section
1.401(k)-l(f)(4).
The determination and correction of excess contributions
made by and on behalf of a Highly Compensated Employee whose Actual
Deferral Ratio is determined under the family aggregation rules shall
be accomplished by reducing the Actual Deferral Ratio as required
under the foregoing
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paragraph and allocating the excess contributions for the family unit
in proportion to the Tax Deferred Contributions of each family member
that are combined to determine the Actual Deferral Ratio.
(c) The Committee shall determine each Plan Year whether the
limitation set forth in subsection (a) above is met and its determination shall
be final and binding on all persons.
6.03 RETURN OF EXCESS DEFERRALS. If, during any calendar year, more
than the maximum permissible dollar amount under Section 3.04 of the Plan (and
section 402(g) of the Code) is allocated pursuant to one or more cash or
deferred arrangements to a Participant's accounts under this Plan and any other
plan described in sections 401(k), 408(k), or 403(b) of the Code, the following
provisions shall apply:
(a) no later than March 1, of the next succeeding calendar
year, the Participant may, but is not required to, allocate all or part of such
contributions in excess of the maximum permissible dollar amount ("Excess
Deferrals") to the Plan. To be effective, such allocation must be in writing,
state that excess deferrals have been made on behalf of such Participant for the
preceding calendar year, and be submitted to the Committee;
(b) to the extent a Participant allocates Excess Deferrals in
a timely manner to this Plan pursuant to (a) above, the Committee shall direct
the Trustees to return such Excess Deferrals, as adjusted for income or losses,
to the Company for distribution to the Participant no later than April 15
following such allocation; and
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(c) the Excess Deferrals that are distributed for a taxable
year will be reduced by excess contributions previously distributed or
recharacterized for the Plan beginning in such taxable year.
6.04 LIMITATION ON MATCHING AND VOLUNTARY CONTRIBUTIONS.
(a) The Matching Contributions made on behalf of a Participant
for a Plan Year shall satisfy the test set forth in (i)(A) below, or the
alternative test set forth in (i)(B) below, and to the extent required by
Treasury Regulations under Code Section 401(m), also shall satisfy the test
identified in (ii) below:
(i) (A) the Actual Contribution Percentage for the
Highly Compensated Employees is not more than the Actual
Contribution Percentage for all other Employees multiplied by
1.25; or
(B) the excess of the Actual Contribution
Percentage for the Highly Compensated Employees over the Actual
Contribution Percentage for all other Employees is not more
than two (2) percentage points, and the Actual Contribution
Percentage for the Highly Compensated Employees is not more
than the Actual Contribution Percentage for all other Employees
multiplied by two (2). (ii) The Actual Contribution Percentage
Highly Compensated Employees eligible to participate in this
Plan and a plan of the Company or an Affiliated Company that is
subject to the limitations of Section 401(m) of the Code
including, if applicable, this Plan, shall be
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reduced in accordance with Section 6.04(b), to the extent necessary to
satisfy the requirements of Treasury Regulations Section 1.401(m)-2.
For purpose of this subsection (a), the "Actual Contribution
Percentage" for a specified group of Participants for a Plan Year shall be the
average of the ratios calculated separately for each Employee in such group
(herein the "Actual Contribution Ratios") (A) the sum of (i) Matching
Contributions, (ii) Qualified Nonelective Contributions and Qualified Matching
Contributions which meet the requirements of Treasury. Regulations Section
1.401(k)-l(b)(5) to the extent such Contributions are not taken into account for
purposes of satisfying the Actual Deferral Percentage Test and which the
Company, in its sole discretion, elects to treat as Matching Contributions for
purposes of satisfying the Actual Contributions Percentage Test actually paid
over. to the Trust on behalf of the Participant for such Plan Year, and (iii)
Voluntary Contributions contributed under the Plan on behalf of each such
Participant for such Plan Year to (B) the Participant's Compensation for the
Plan Year. In determining the contribution percentage of a Highly Compensated
Employee who has a Family Member, the Matching Contributions, Qualified
Nonelective Contributions and Qualified Matching Contributions made on behalf of
and the Compensation of such Highly Compensated Employee shall include the
Matching Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions and Compensation of his Family Member(s), and such Family
Member(s) shall not be considered a separate Participant for purposes of
determining the Actual Contribution Percentage for any group under the Plan to
the
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extent required by section 414(q) of the Code and any regulations promulgated
thereunder.
In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more other plans satisfy
the requirements of Section 401(a)(4) or 410(b) of the Code only if aggregated
with this Plan, then this Section shall be applied by determining the Actual
Contribution Ratios of employees as if all such plans were a single plan, in
accordance with Treasury Regulations under Section 401(m) of the Code. For
purposes of this Section, the Actual Contribution Ratio for any employee who is
a Highly Compensated Employee under two or more Code Section 401(a) plans of the
Company or an Affiliated Company, to the extent required by Code Section-401(m),
shall be determined in a manner taking into account the voluntary employee
contributions and matching contributions for such employee under each of such
plans.
To the extent determined by the Committee and in accordance
with applicable Treasury Regulations under Code Section 401(m)(3), Tax Deferred
Contributions and Qualified Nonelective Contributions made on behalf of a
Participant may be taken into account for purposes of calculating the Actual
Contribution Ratio of such Participant, but only if the conditions set forth in
Treasury Regulations Section 1.401(m)-l(b)(5) are satisfied.
At any time during the Plan Year, the Committee may direct the
Company to suspend or reduce the amount of Matching Contributions with respect
to any
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<PAGE> 51
Participant if the Committee determines that such suspension or reduction is
necessary to cause the tests described above to be met.
(b) If the Plan fails to satisfy the Actual Contribution
Percentage Test for any Plan Year, the Committee shall correct Excess Aggregate
Contributions as set forth below:
(i) For purposes of satisfying the Actual Contribution
Percentage Test for a Plan Year, in its sole discretion, may
contribute Qualified Nonelective Contributions and/or Qualified
Matching Contributions to the Trust which shall be allocated to those
Participants eligible to share in the Qualified Nonelective
Contributions and/or Qualified Matching Contributions for the Plan
Year in accordance with the provisions of Article 4. The amount of
Qualified Nonelective Contributions and/or Qualified Matching
Contributions taken into account as- Matching Contributions for
purposes of calculating the Actual Contribution Ratios of Employees
shall be such Qualified Nonelective Contributions and/or Qualified
Matching Contributions as are necessary to satisfy the Actual
Contribution Percentage Test for the Plan Year subject to such other
requirements as may be prescribed by the Secretary of Treasury.
(ii) To the extent Qualified Nonelective Contributions
and/or Qualified Matching Contributions are not made or are
insufficient to satisfy the Actual Contribution Percentage Test, the
Committee shall direct the Trustees to distribute to the Highly
Compensated Employees, in order of their
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contribution percentages beginning with the highest of such
percentages, the amount of Excess Aggregate Contributions, plus
earnings thereon, necessary to cause the Plan to meet such limitation
for such Plan Year. Excess Aggregate Contributions shall be distributed
first from a Participant's Voluntary Contributions and, if necessary,
from the Participant's vested Matching Contributions for the Plan Year.
All such Excess Aggregate Contributions together with the income and
loss allocable thereto determined in accordance with section 401(m) of
the Code and the regulations thereunder, shall be distributed to the
Highly Compensated Employee on whose behalf such contributions were
made no later than March 15 of the following Plan Year. Nonvested
Matching Contributions which constitute Excess Aggregate Contributions
will be forfeited and reallocated to the Accounts of Participants who
do not have Excess Aggregate Contributions.
The determination and correction of Excess Aggregate Contributions
made by and on behalf of a Highly Compensated Employee whose Actual Contribution
Ratio is determined under the family aggregation rules shall be accomplished by
reducing the Actual Contribution Ratio as required under the foregoing paragraph
and allocating the Excess Aggregate Contributions for the family unit in
proportion to the Matching Contributions of each family member that are combined
to determine the Actual Contribution Ratio.
6.05 LIMITATIONS ON ANNUAL ADDITIONS. Notwithstanding anything
hereinabove to the contrary, the sum of the amounts credited to the accounts of
any
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Participant for any Plan Year pursuant to Section 5.02 (dealing with Tax
Deferred Contributions), Section 5.03 (dealing with Matching Contributions),
Section 5.04 (dealing with Company Contributions), Section 5.05 (dealing with
Qualified Nonelective Contributions and Qualified Matching Contributions), and
this Section 6.05 shall be reduced to the extent that such amounts, plus any
other Annual Additions (as defined below) would cause the sum of all such
contributions and Annual Additions credited to the accounts of such Participant
under the Plan for such Plan Year to exceed the lesser of (a) Thirty Thousand
Dollars ($30,000) (or, if greater, one-fourth of the defined benefit dollar
limitation set forth in section 415(b) of the Code, as adjusted pursuant to
section 415(d) of the Code), or (b) twenty-five percent (25%) of such
Participant's total compensation (determined in accordance with section 415 of
the Code and the regulations thereunder) for such Plan Year, provided, however,
that a Participant's total compensation shall not exceed Two Hundred Thousand
Dollars ($200,000) for any Plan Year for Plan Years beginning prior to January
1, 1994 and One Hundred Fifty Thousand Dollars ($150,000) for any Plan Year for
Plan Years beginning on or after January 1, 1994 (or such larger amount as the
Secretary of the Treasury may determine for such Plan Year under section
401(a)(17) of the Code). Any reduction required pursuant to the foregoing
sentence shall be made only if such reduction is the result of the allocation of
forfeitures, a reasonable error in estimating a Participant's annual
compensation, a reasonable error in determining the amount of Tax Deferred
Contributions that may be made with respect to any individual under the limits
of Code Section 415, or under other limited facts and
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circumstances permitted by the Commissioner of the Internal Revenue Service. Any
such reductions shall be made in the following order:
(i) the unmatched Tax Deferred Contributions allocated
to such Participant's Tax Deferred Account pursuant to Section 5.02
shall be reduced first;
(ii) the matched Tax Deferred Contributions allocated to
such Participant's Tax Deferred Account pursuant to Section 5.02 shall
be reduced next;
(iii) the Matching Contributions allocated to such
Participant's Company Account pursuant to Section 5.04 shall be
reduced next; and
(iv) the Company Contributions allocated to such
Participant's Company Account pursuant to Section 5.05 shall be
reduced next;
(v) the Qualified Nonelective Contributions allocated to
such Participant's Tax Deferred Account pursuant to Section 5.03 shall
be reduced next; and
(vi) the Qualified Matching Contributions allocated to
such Participant's Company Account pursuant to Section 5.03 shall be
reduced last.
In the event any reduction is required pursuant to subsection
(i) above, the amount of such reduction shall be returned to the Participant. In
the event any reduction is required pursuant to subsection (ii) above, the
amount of such reduction shall be returned to the Participant and any Matching
Contributions attributable thereto shall be
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reduced to the extent necessary to eliminate any remaining excess amount. In the
event any reduction of amounts other than Tax Deferred Contributions is
required, the amount of such reduction shall be allocated and credited pursuant
to the procedures set forth in Section 5.05 above (with respect to the
allocation of Company Contributions) to the Company Accounts of remaining
Participants exclusive of any other Participant for whom a reduction for such
Plan Year has been required pursuant to this Section 6.05. Any such reductions
which cannot be so reallocated shall be held unallocated by the Trustees and
shall be treated as if they were a Company Contribution to be allocated under
Section 5.05 with respect to the succeeding Plan Year.
For purposes of this Section 6.05, the term "Annual Additions"
means the sum of the following amounts credited to a Participant's Account for
any Limitation Year:
(a) employer contributions;
(b) forfeitures;
(c) voluntary employee contributions;
(d) amounts allocated to an individual medical account, as
defined in Code Section 415(l)(2) which is part of a pension or annuity plan
maintained by the Company;
(e) amounts derived from contributions which are attributable
to postretirement medical benefits allocated to the separate account of a key
employee (as defined in Code Section 419A(d)(3)) under a welfare benefit plan,
as defined in Code Section 419(e), maintained. by the Company; and
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(f) Amounts allocated under a simplified employee pension (as
defined in Code Section 408(k)).
For purposes of this Section 6.05, the following special rules
shall apply: First, all defined contribution plans of the Company shall be
treated as one defined contribution plan for purposes of applying the
limitations set forth above in this Section. Second, if the Company is a member
of a controlled group of corporations or trades or businesses under common
control (as defined in Code Section 1563(a) or Code Sections 414(b) or (c) as
modified by Code Section 415(h)), an affiliated service group (as defined by
Code Section 414(m)), or a group of entities required to be aggregated pursuant
to Code Section 414(o), all employees of such employers shall be considered to
be employed by a single employer. The limitations of this Section 6.05 shall be
allocated among the members as the members shall agree, or absent agreement, in
proportion to the Participant's Compensation from each member.
In the event a Participant hereunder also is a participant in
any qualified defined benefit plan (within the meaning of Section 415(k) of the
Code) of the Company or an Affiliated Company, then the benefit payable under
such defined benefit plan, or any of them, shall be reduced for so long and to
the extent necessary to provide that the sum of the "defined benefit fraction"
and the "defined contribution fraction' for any Limitation Year shall not exceed
1. For purposes of this Section 6.05, the "defined benefit fraction" shall be a
fraction, the numerator of which is the projected benefit of a Participant under
all qualified defined benefit plans adopted by the Company or an Affiliated
Company expressed as either an annual straight life annuity or a qualified joint
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and survivor annuity providing the maximum permissible survivor benefit
(determined as of the close of the Limitation Year), and the denomination of
which is the lesser of (i) the maximum dollar amount otherwise allowable for
such Limitation Year under applicable law times 1.25 or (ii) the percentage of
the compensation limit for such Limitation Year times 1.4. For purposes of this
Section 6.05, the "defined contribution fraction" shall be a fraction, the
numerator of which is the sum of the annual additions to the Participant's
account under this Plan and any other defined contribution plans adopted by the
Company or an Affiliated Company for each Limitation Year, and the denominator
of which is the lesser for each such Limitation Year of (i) the maximum Annual
Addition which could have been made under this Plan and any other defined
contribution plans adopted by the Company or an Affiliated Company for such
Limitation Year and for each prior Limitation Year of service with the Company
or an Affiliated Company times 1.25 or (ii) the amount determined under the
percentage of compensation limit for such Limitation Year times 1.4. For
purposes of this paragraph, the status of an entity as an Affiliated Company
shall be determined by reference to the percentage tests set forth in Code
Section 415(h).
ARTICLE VII.
PAYMENTS TO OR FOR THE ACCOUNT OF
PARTICIPANTS OR TERMINATED PARTICIPANTS
7.01 RESTRICTIONS ON PAYMENTS AND DISTRIBUTIONS. No money or other
property of the Trust shall be paid out or distributed by the Trustees except
(a) for the purchase or other acquisition of appropriate investments; (b) for
defraying the-expenses,
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including taxes, if any, of administering the Trust as elsewhere herein
provided; (c) for the purpose of making distributions to or for the account of
Participants at the written direction of the Committee in accordance with the
rules set forth below; (d) for the return of Company contributions pursuant to
Section 4.06; or (e) for the purpose of complying with the terms of a qualified
domestic relations order, within the meaning of section 414(p) of the Code. All
benefits payable under the Plan shall be paid or provided for solely from the
Trust, and the Company assumes no liability or responsibility therefore.
7.02 RETIREMENT. A Participant shall become fully vested in his
accounts upon attainment of Normal Retirement Age. Upon retirement of a
Participant, which shall be deemed to mean any termination of his employment
with the Company at or after his Normal Retirement Age, the full amount then
standing to the credit of such Participant's accounts shall be distributed to
him or applied for his benefit as provided in Section 7.07. A Participant who
remains in the active employ of the Company after attaining Normal Retirement
Age shall continue as a Participant for all purposes of the Plan until the date
of his actual retirement.
7.03 DISABILITY RETIREMENT. If the Committee shall determine, on the
basis of such medical evidence as it may reasonably require, that a Participant
is totally incapable of performing his assigned duties with the Company and is
therefore unable to continue in the employ of the Company by reason of the
sickness or disability (whether mental or physical) of such Participant which is
causing such total incapacity, the Company shall direct the Trustees to apply
the full amount then standing to the credit of such Participant's accounts for
his. benefit as provided in Section 7.07. The Committee's
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determination as to whether a Participant has become sick or disabled so as to
be unable to continue in the employ of the Company shall be conclusive and
binding on all persons.
7.04 DEATH BENEFITS.
(a) Upon the death of any Participant who has a surviving
spouse, the Committee shall direct the Trustees to distribute the full amount
standing to the credit of such Participant's accounts (reduced by any security
interest held by the Plan by reason of a loan outstanding to the Participant) to
the Participant's surviving spouse, unless the exception provided by paragraph
(b) of this Section 7.04 applies.
(b) The requirement of subsection (a) of this Section 7.04
shall not apply if (i) the Participant elects to designate a Beneficiary other
than his spouse and his spouse (A) consents in writing to such election, (B)
such election designates a beneficiary which may not be changed without the
consent of the spouse (or the consent of the spouse expressly permits
designations by the Participant without any requirement of further consent by
the spouse), and (C) the spouse's consent acknowledges the effect of such
election and is witnessed by a Plan representative or a notary public, or (ii)
if it is established to the satisfaction of the Committee that the consent of
the surviving spouse could not have been obtained because there is no spouse,
because the spouse cannot be located, or because of other circumstances
prescribed by regulations under section 417(a)(2) of the Code.
A former spouse shall be treated as a surviving spouse to the
extent benefits must be paid to such former spouse upon the Participant's death
pursuant to a qualified domestic relations order (as defined in section 414(p)
of the Code), except that
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no consent shall be required from such former spouse with respect to the
designation of a Beneficiary to receive benefits not subject to said order.
(c) If, and only if, a Participant is not married or, if
married, is permitted under this Section 7.04 to designate a Beneficiary other
than his surviving spouse, then such Participant's accounts shall be distributed
in accordance with this subsection (c) of Section 7.04. Such a Participant shall
have the right to designate one or more Beneficiaries, including contingent
Beneficiaries, entitled to receive the amount payable in behalf of such
Participant under the provisions of this Plan in the event of death. Such
designation shall be made in writing in such manner as the Committee shall
determine. A Participant may change such designation from time to time, and may
revoke such designation; provided, however, that any subsequent designation must
meet the requirements of this Section 7.04. Upon the death of any Participant,
the Committee shall direct the Trustees to distribute, for the benefit of such
Participant's Beneficiaries and subject to the provisions of Section 7.08, the
full amount standing to the credit of the Participant's accounts. If a
Participant dies without having designated a Beneficiary, or if none of the
designated Beneficiaries survives the Participant, or if the Committee is in
doubt as to the effective status of a Beneficiary designation, payment of any
sum that would otherwise have been payable to such Beneficiary will be made to
the first surviving class of the following classes of successive preference
Beneficiaries, all members of such class to share equally: the Participant's (i)
surviving spouse; (ii) surviving issue (including adopted children) per stirpes;
(iii) surviving parents; (iv) brothers and sisters, in equal shares; and (v)
executors and administrators. If a Beneficiary entitled to receive any
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amount payable in behalf of a Participant dies before receiving the entire
amount to which such Beneficiary is entitled, the undistributed balance,
together with any income or loss accumulated thereon, shall be distributed to
such Beneficiary's estate in accordance with Section 7.07.
7.05 TERMINATION OF PRIOR TO RETIREMENT OR DEATH.
(a) If any Participant's employment with the Company
terminates under circumstances other than by reason of retirement, disability or
death, as provided for under Sections 7.02 through 7.04, he shall be entitled to
a vested benefit equal to the sum of (i) 100% of the amounts standing to the
credit of his Tax Deferred Account, Voluntary Contribution Account, Rollover
Account, Qualified Nonelective Contributions Account, plus (ii) that percentage
of the amount standing to the credit of his Company Account, based upon his
Years of Vesting Service, which shall be determined under the following
schedule.
YEARS VESTED
OF SERVICE PERCENTAGE
---------- ----------
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%
A Participant whose employment with the Company terminates and
who immediately thereafter becomes an employee of an Affiliated Company shall
not be considered to have terminated his employment for purposes of this section
until his employment with the Affiliated Company subsequently terminates.
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The vested benefit determined in accordance with the foregoing
provision shall never be adjusted or altered in any fashion on account of any
Years of Vesting Service which the Participant might complete upon reemployment
with the Company or an Affiliated Company after a Break in Service., except as
provided in Section 7.06.
(b) The determination of the amount to which such terminated
Participant is entitled in accordance with the foregoing rules shall be made by
the Committee and communicated to the Trustees.
(c) Any amount standing to the credit of a Participant's
Company Account to which he is not entitled at the time of his termination of
employment shall be forfeited by him upon the earlier of the payment of the full
amount to which such Participant is entitled under the Plan or the incurrence of
five (5) Consecutive Breaks in Service by the Participant. For purposes of the
preceding sentence, a terminated Participant who is not entitled to receive any
amount under the Plan shall be deemed to have received the entire amount to
which he is entitled on the date his employment terminates and shall forfeit his
entire Company Account as of that date. At the close of the Plan Year in which
any forfeitures occur, all such forfeited amounts shall be applied to reduce the
Company's Matching Contributions for such Plan Year.
7.06 REEMPLOYMENT. If a terminated Participant is reemployed by the
Company, he shall again become an active Participant upon reemployment pursuant
to Section 3.03.
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If such a reemployed Participant was not 100% vested in his
Company Account under Section 7.05(a) at the time of his prior termination, the
following special provisions shall apply:
(a) If such a terminated Participant is reemployed after
incurring five (5) consecutive Breaks in Service, he shall have no rights with
respect to any amounts previously forfeited from his Company Account, and any
portion of his Company Account which has not been distributed shall be held in a
separate, fully vested Company Account until such Participant becomes 100%
vested under Section 7.05(a) whereupon it shall be merged with the Company
Account otherwise maintained form him.
(b) If such a terminated Participant is reemployed before
incurring five (5) consecutive Break in Service, the full amount, if any, which
was forfeited from his Company Account as a result of his prior termination
shall be restored to his Company Account as of the date of reemployment. If such
terminated Participant had previously received a distribution of all or any part
of the vested portion of his Company Account, the vested portion of his Company
Account shall thereafter be determined by (i) adding the amount previously
distributed to his current Company Account balance, (ii) multiplying the
resulting sum by his current vesting percentage and (iii) subtracting from the
resulting product the amount previously distributed.
7.07 METHODS OF PAYMENT.
(a) Whenever under this Article VU any amount is required to
be distributed or applied for the benefit of any Participant or Beneficiary or
other person,
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such distribution shall be made by the payment or commencement of payments under
such one or more of the following methods as the Participant or Beneficiary may
elect.
Option A. One lump sum payment in cash (or in kind or party in
cash and partly in kind).
Option B. Payments in annual periodic installments, in cash (or
in kind or partly in cash and partly in kind),
reasonably nearly equal in amount, over any period not
exceeding fifteen (15) years.
If a Participant or Beneficiary fails to make an election under this Section
7.07(a), he shall receive his benefit (in a single cash payment) pursuant to
Option A. Notwithstanding the foregoing, if the amount standing to the credit of
a Participant's accounts does not exceed (and has never exceeded before any
prior distribution) Three Thousand Five Hundred Dollars ($3,500), the
- -Participant or Beneficiary shall automatically receive his benefit in one lump
sum payment in cash.
(b) Whenever during any Plan Year the amount standing to the
credit of a Participant's accounts becomes distributable pursuant to Sections
7.02 through 7.05, distribution at such retirement, disability, death or
termination of employment, as the case may be, shall be made or commenced within
a reasonable time after the latest of (1) the end of the Plan Year in which such
termination occurs, (2) the determination of the allocation to which the
Participant is entitled under Section 5.04 with respect to such Plan Year, or
(3) if Section 7.08(a) is applicable to such Participant, the date the
Participant consents to a distribution pursuant to that Section.
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(c) Notwithstanding anything herein to the contrary, effective
January 1, 1993, a Participant may elect to have an Eligible Rollover
Distribution paid directly by the Trustee to the trustee of an Eligible
Retirement Plan.
7.08 RESTRICTIONS ON METHOD AND TIMING OF PAYMENT. Notwithstanding any
provision of the contrary, in order to comply with Sections 401(a)(9),
411(a)(11) and 414(p) of the Code, the following provisions shall apply:
(a) If the sum of a Participant's account balances to be
distributed upon retirement, disability or severance under Sections 7.02, 7.03
or 7.05 is greater than Three Thousand Five Hundred Dollars ($3,500), such
account balances shall not be distributed in whole or in part until the earlier
of (i) the date the Participant attains Normal Retirement Age or (ii) the
Participant's death, unless the Participant consents to such earlier
distribution in writing.
(b) In the case of distribution to a Participant, the period
of years selected under Option B shall be such that the requirements set forth
in both (i) and (ii) below are satisfied at the time distribution to such
Participant is to commence.
(i) No method of payment hereunder may be selected which
would provide for payment to any person during any period longer than
the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his Beneficiary, determined
using attained ages as of the calendar year in which payments commence
and Table V or VI of Treasury Regulation section 1.72-9.
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(ii) If someone other than the Participant's spouse is
designated to receive benefits, then the period of years over which
installment payments are to be paid shall be such that any period of
years remaining as of the calendar year in which the Participant
attains age seventy and one-half (70'1/2) or any subsequent calendar
year shall meet the minimum distribution incidental benefit
requirement which shall be determined in accordance with regulations
promulgated under section 401(a)(9) of the Code.
For purposes of this Section 7.08(b) and Section 7.08(e), a
Participant's Beneficiary shall be determined in accordance with regulations
promulgated under section 401(a)(9) of the Code.
(c) In no event shall the distribution of a Participant's
Accounts, unless the Participant otherwise elects, begin later than the sixtieth
(60th) day after the close of the Plan Year in which the later of the following
events occurs:
(i) the Participant's sixty-fifth (65th) birthday;
(ii) the tenth (10th) anniversary of the date on
which the Participant first became a Participant; or
(iii) the Participant's termination of service with
the Company (and any Affiliated Company).
(d) In no event shall the distribution of benefits to a
Participant begin later than the April 1 next following the calendar year in
which such Participant attains age seventy and one-half (70%) (the 'Required
Distribution Date"). Notwithstanding the foregoing, the Required Distribution
Date for any Participant (i) who
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is not a "five-percent owner" (within the meaning of section 416(i)(1)(B)(i) of
the Code) at any time during the five Plan Year period ending in the calendar
year in which the Participant attains age seventy and one-half (70%) and (ii)
who attains age seventy and one-half (70%) before January 1, 1988, shall be no
earlier than the April 1 next following the calendar year in which the
Participant terminates employment with the Company.
(e) In the event a Participant dies before his Required
Distribution Date and his surviving spouse is not his Beneficiary, his entire
interest shall be paid to his Beneficiary in a lump sum no later than December
31 of the calendar year containing the fifth (5th) anniversary of the
Participant's death; provided, however, that the Participant's Beneficiary may
elect, no later than December 31 of the calendar year following the calendar
year in which the Participant died, to receive installment payments commencing
no later than such date and payable over a period not exceeding the
Beneficiary's life expectancy. If the Participant's Beneficiary is his surviving
spouse, the Participant's entire interest shall be paid to his surviving spouse
in installment payments commencing no later than December 31 of the calendar
year in which the Participant would have attained age seventy and one-half
(70-1/2) and payable over a period not exceeding the life expectancy of the
surviving spouse, provided, however, that the surviving spouse always as has the
right to elect to receive her benefits in a lump sum. If the spouse dies before
said date, subsequent distributions shall be made as if the spouse had been the
Participant. Life expectancy win be calculated in accordance with Treasury
Regulation section 1.72-9 and regulations promulgated under section 401(a)(9) of
the Code.
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If a Participant dies on or after his Required Distribution
Date, the Participant's remaining interest in the Plan shall be distributed at
least as rapidly as under the method of distribution being used as of the date
of death.
(f) If, and to the extent that, any portion of a Participant's
account balances is payable to a former spouse or dependent pursuant to a
qualified domestic relations order within the meaning of sections 401(a)(13)(B)
and 414(p) of the Code, the provisions of said order shall govern the
distribution thereof. Such an order may provide for payments to a former spouse
or dependent even though the Participant is still employed by the Company or is
otherwise not eligible for the distribution of benefits under the Plan.
7.09 WITHDRAWALS DURING EMPLOYMENT.
(a) Upon written notice given to the Committee at least thirty
(30) days (or such shorter period as the Committee allows) prior to a Valuation
Date, a Participant may withdraw fifty percent (50%) or one hundred percent
(100%) of the amount standing to the credit of his Voluntary Contribution
Account and/or Rollover Account as of such Valuation Date.
(b) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who has not yet attained age fifty-nine and one-half (59Y2) and
has withdrawn the full amount, if any, standing to the credit of his Voluntary
Contribution Account and/or Rollover Account, may at any time during his
employment with the Company withdraw all or any portion of the amount
(determined as of such Valuation Date) standing to the
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credit of his Tax Deferred Account, excluding any outstanding loan amounts with
respect to such account, but only in order, and to the extent necessary, to meet
a "Financial Hardship"; provided, no such withdrawal may exceed the aggregate
amount of the Tax Deferred Contributions made on his behalf by the Company,
reduced by the sum of all prior withdrawals from such Participant's Tax Deferred
Account. The determination that the Participant is faced with a Financial
Hardship and of the amount required to meet such Financial Hardship which is not
reasonably available from other resources of the Participant shall be made by
the Committee in accordance with uniform and nondiscriminatory standards and
policies which shall be adopted by the Committee and consistently applied to
each application for a withdrawal pursuant to this Section 7.09(b). For purposes
of this Section 7.09(b), 'Financial Hardship" shall mean an immediate and heavy
financial need which such Participant is not able to meet from any other
reasonably available resources. In determining that such Participant is not able
to meet such Financial Hardship from any other sources, the Committee may
reasonably rely upon the written certification of the Participant given in
accordance with the regulations under section 401(k). Subject to the foregoing
and the requirements of section 401(k) of the Code and any regulations
thereunder, the term 'Financial Hardship" shall mean and include the following:
(i) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
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(ii) the payment of the tuition for the next
semester or quarter of post-secondary education for the
Participant, his spouse, children, or dependents;
(iii) the medical expenses described in section 213(d)
of the Code which are incurred by the Participant, his spouse or any
dependent, and which are not covered by insurance; or
(iv) the need to prevent an eviction or mortgage
foreclosure on the Participant's principal residence.
(c) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who is at least fifty-nine and one-half (59%) years old shall be
entitled to withdraw all or any portion of his Tax Deferred Account as of such
Valuation Date.
(d) A Participant may specify that a withdrawal under this
Section 7.09 is to be charged to his interest in one or more specific Investment
Media in which the account charged with the withdrawal is invested. Unless so
specified, distribution will be made out of the interests of such account in
each Investment Medium in accordance with the proportion which the interest of
such account in such Investment Medium bears to the total value of such account,
subject however to such restrictions as may be applicable to the particular
Investment Media.
(e) AR withdrawals under this Section 7.09 shall be made as
soon as practicable after the Valuation Date next following timely receipt by
the Committee of the Participant's written notice.
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7.10 LOANS TO MEMBERS. The Committee shall be responsible for establishing
and administering the loan program described below. Upon written application of
a Participant submitted to the Committee at least thirty (30) days (or such
shorter period as the Committee allows) prior to a Valuation Date, the Committee
may direct the Trustees to lend to such Participant such amount or amounts from
his Tax Deferred Account, and the vested portion of his Company Account, as the
Committee may determine proper. The loan, when added to all other loans
outstanding from the Plan, may not exceed the lesser of:
(a) Fifty Thousand Dollars ($50,000), reduced by the excess, if
any, of:
(i) The highest outstanding balance of loans from the Plan
during the one (1) year period ending on the date before the date such
loan is made, over
(ii) The outstanding balance of loans from the Plan on the
date such loan is made; or
(b) fifty percent (50%) of the vested balance of such Participant's
Account (excluding any accumulated deductible Employee Contributions as defined
in section 72(o)(5)(B) of the Code).
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Committee may make reasonable distinctions
based upon credit-worthiness, length of employment, other obligations of the
Participant and other factors that may adversely affect the ability to assure
repayment. The Committee may also consider liquidity. The decision as to whether
a loan shall or shall not be made in any
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case shall rest solely within the discretion of the Committee, such discretion
to be exercised consistently with the provisions of Section 9.05 and with such
procedures as the Committee may establish pursuant to this Section 7.10. Loans
will not be granted for amounts less than Five Hundred Dollars ($500). Loans
approved under this Section 7.10 shall be made as soon as reasonably practicable
after the Valuation Date next following timely receipt by the Committee of the
Participant's written application.
Each such loan shall be made at such reasonable rate of interest as
the Committee may determine, which shall be commensurate with rates charged by
commercial lenders for similar loans to similar borrowers, and shall be subject
to such other terms and conditions as the Committee may deem proper, and shall
be evidenced by the promissory note of the Participant and adequately secured
with collateral of sufficient value to reasonably compensate for a loss of
principal and interest in case of default. For loans granted or renewed after
October 18, 1989, no more than fifty percent (50%) of the present value of a
Participant's vested accrued benefit, computed immediately after the origination
of the loan, may be considered as security for Plan loans made to that
Participant. Other collateral, if required, shall be similar in amount and type
to that which would be required by a commercial lender in a typical arm's length
transaction under similar circumstances. Each such loan shall be repaid by
payroll deduction as authorized by the Committee, shall be amortized over the
term of the loan in level payments made not less frequently than quarterly, and
shall be repaid within five (5) years unless such loan is used to acquire a
dwelling unit which within a reasonable period of time is to be
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used determined at the time the loan is made) as the principal residence of the
Participant in which case the repayment period shall not exceed twenty (20)
years.
Each such loan shall be deemed to be an investment made at the
direction of such Participant and shall be credited to a separate investment
account for the borrowing Participant. An amount equal to the principal amount
of such loan when made shall be charged to the interests of such Participant's
Self-Directed Account.
A Participant may specify that a loan under this Section 7.10 is to
be charged to his interest in one or more specific Investment media in which his
Self Directed Account is invested. Unless so specified, the loan amounts shall
be made out of the interest of such account in each Investment Medium in
accordance with the proportion of which the interest of such account in such
Investment Medium bears to the total value of such account, subject, however, to
such restrictions as may be applicable to the particular Investment Media.
All interest and loan repayments shall be credited to the
Self-Directed Account of such Participant and shall be reinvested in the
Investment Media in accordance with the most recent investment election of such
Participant with respect to contributions credited to such account. All expenses
incurred by the Committee and the Trustees, including reasonable attorneys' fees
and court costs, as a result of a default by a Participant shall be charged
against the Participant's accounts.
A loan under this Section 7. 10 will be deemed in default upon
failure of the borrower to make any payment of principal or interest when due,
and the Trustees shall in that event take such steps at such times as may be
reasonably necessary to protect and
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preserve Plan assets. Notwithstanding the foregoing, in the event of default,
foreclosure on the collateral for a loan under this section will not occur until
a distributable event occurs in the Plan. If any loan has been in default for
six (6) consecutive months, and is not current as of the end of the Plan Year,
the Committee shall deduct the outstanding balance of the loan, including
interest, from any distribution of Trust Assets to which a Participant or his
Beneficiary may be entitled if a distribution may be made to the Participant at
the end of the Plan Year. If the Participant's Account is not sufficient to pay
the remaining balance of any such loan, he shall be liable for any balance still
due, and shall continue to make payments to the Trustees. No distribution shall
be made to any Participant or his Beneficiary until all loans, including
interest thereon, have been paid. If any Participant is in default on a loan
made under this Section 7.10 and has been in default for six (6) consecutive
months, the Salary Deferral Election of such Participant shall be automatically
suspended until the loan is brought current.
In the case of a Participant who is married at the time a loan is
made, the consent of his spouse must be obtained as a condition precedent to the
making of the loan. The consent must be obtained within the ninety (90) day
period prior to the making of the loan. The consent shall be in writing, be
witnessed by a Plan representative or a notary public and shall acknowledge the
rights of the Trustees to make appropriate offset against the benefits payable
to a Participant in the amount of any principal and interest outstanding on the
loan at the time benefits become distributable under the terms of the Plan.
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7.11 DISCHARGE OF TRUSTEES' OBLIGATION TO MAKE PAYMENTS. Whenever the
Trustees are required to make any payment or payments to any person in
accordance with the provisions of this Article VII or Article VIII, the
Committee shall notify the Trustees in writing of such person's last known
address as it appears in the Committee's records; and the obligations of the
Trustees and the Committee to make such payment or payments shall be fully
discharged by mailing the same to the address specified by the Committee.
7.12 QUALIFIED DOMESTIC RELATIONS ORDER. Nothing contained in this
Plan prevents the Trustees, in accordance with the directions of the Committee,
from complying with the provisions of a qualified domestic relations order (as
defined in section 414(p) of the Code). This Plan specifically permits
distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained his earliest
retirement age (as defined in section 414(p) of the Code) under the Plan. A
distribution to an alternate payee prior to the Participant's attainment of
earliest retirement age is available only if:
(a) The order specifies distribution at that time or permits
an agreement between the Plan and the alternate payee to authorize an earlier
distribution; and
(b) If the present value of the alternate payee's benefits
under the Plan exceeds Three Thousand Five Hundred Dollars ($3,500), the order
requires the alternate payee to consent to any distribution occurring prior to
the Participant's attainment of earliest retirement age. Nothing in this section
permits the Participant the
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right to receive distribution at a time otherwise not permitted under the Plan,
nor does it permit the alternate payee to receive a form of distribution not
permitted under the Plan.
7.13 PROCEDURES FOR DIRECT ROLLOVERS TO AN ELIGIBLE RETIREMENT
PLAN.
(a) The Committee shall notify each Employee who is to receive
an Eligible Rollover Distribution of the availability of a direct rollover of
his or her benefits to an Eligible Retirement Plan. Such notice shall conform to
Code Section 402(f) and the Regulations issued thereunder, and shall be provided
not more than ninety (90) days and not less than thirty (30) days prior to the
Annuity Starting Date, provided, however, to the extent permitted under
applicable law, a Participant may waive the requirement that notice be given no
less than thirty (30) days before the Annuity I Starting Date. If a Participant
or Beneficiary has elected to take distributions in the form of periodic
payments, such notice must be provided only prior to the first payment.
(i) An election by the Employee to have a direct
rollover must be made pursuant to reasonable procedures established by
the Committee, and must include information adequate to enable the
Trustee to effect such rollover. Such information shall include:
(A) the name of the Eligible Retirement Plan;
(B) the address (and name, if the Eligible
Retirement Plan is an individual retirement arrangement) -of the
Trustee of the Eligible Retirement Plan;
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(C) a representation by the Employee that the
recipient plan is an Eligible Retirement Plan and that such plan will
accept a direct rollover; and
(D) such other information as is reasonably
necessary in order to permit the Trustee and Committee to accomplish
the direct rollover.
(ii) In the event that a Employee makes no direction to
the Trustee under subsection (i) above prior to the Annuity Starting
Date, distributions shall proceed pursuant to Section 7.07.
(iii) The Trustee may accomplish the direct rollover to
the Eligible Retirement Plan selected by the Employee by any
reasonable means, including, but not limited to: making a wire
transfer directed to the trustee or custodian of the Eligible
Retirement Plan, mailing a check directly to the trustee or custodian
of the Eligible Retirement Plan, if such check is negotiable only by
the trustee of such Plan; or providing the check to the Employee for
delivery to the Eligible Retirement Plan, if such check is made
payable to the trustee of such Eligible Retirement Plan and is
negotiable only by the trustee of such Eligible Retirement Plan.
(iv) An election by a Employee either to have or not to
have a direct rollover of all or a portion of his or her benefits to
an Eligible Retirement Plan may be revoked within the period during
which any election relating to the form of distribution may be revoked
under this Article.
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(v) If a Employee elects to receive periodic payments
under Section 8.3 above and such payments qualify as Eligible Rollover
Distributions, an election to have such payments rolled over directly
to an Eligible Retirement Plan shall be effective for all future
periodic payments until revoked by the Employee. Such revocation shall
be effective for future payments as soon as is administratively
feasible.
(vi) The Committee may establish additional procedures
relating to direct rollovers to an Eligible Retirement Plan, as long
as such procedures are reasonable and do not result in the effective
elimination of a Employee's ability to elect a direct rollover.
(b) Distributions to Individuals other than the Employee.
(i) If an Eligible Rollover Distribution is paid to the
Employee's surviving spouse (or to a spouse or former spouse by reason
of being an Alternate Payee under a Qualified Domestic Relations
Order) after the Employee's death, an Eligible Retirement Plan shall
be limited to an individual retirement account or an individual
retirement annuity as described in Code Section 408.
(ii) A distribution attributable to a Employee payable
to an individual other than a spouse or former spouse shall not be
considered to be an Eligible Rollover Distribution.
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7.14 TRANSFER TO OTHER QUALIFIED PLAN.
If a Employee terminates employment with Employer and becomes
an employee of another employer that has adopted a profit-sharing or pension
plan and trust qualified as tax exempt under Code Sections 401 and 501, and the
Employee so elects, and the Committee approves, then the Committee shall direct
the Trustee to distribute the vested portion of such Employee's Account(s)
directly to the trustee of such other plan or plans to be held by such trustee
for the benefit of such Employee in accordance with the provisions of such plan
or plans. Any transfer under this Section shall be deemed to be a distribution
or an elective transfer which meets the requirements of Treasury Regulation
Section 1.411(d)-4 (Q/A-3(b)) and shall be made in the manner that satisfies the
provisions of this Article, including the provisions of Section 7.08(a)
requiring the Participant's consent.
ARTICLE VIII.
AMENDMENT AND TERMINATION
8.01 RIGHT TO AMEND OR TERMINATE. The Company reserves the right at
any time and from time to time to amend this Agreement, or discontinue or
terminate the Plan and Trust by delivering to the Committee and Trustees a copy
of an amendment or appropriate Board of Directors' Resolution of Discontinuance
or Termination certified by an officer of the Company; provided, however, that
except as provided in Section 8.02, the Company shall have no power to amend or
terminate this Agreement in such manner as would cause or permit (a) any of the
trust assets to be diverted to purposes other than for the exclusive benefit of
the employees of the Company or their beneficiary; (b) any reduction in the
amount thereto or credited to any Participant; (c) any portion of the trust
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assets to revert to or become the property of the Company; (d) the rights and
responsibilities of the Committee or Trustees to be increased without their
written consent; (e) the elimination of an optional form of benefit with respect
to amounts credited to a Participant's accounts before the amendment; and/or (f)
the elimination or reduction of an early retirement benefit or a retirement type
subsidy. In the case of a retirement type subsidy, the preceding sentence shall
apply only with respect to a Participant who satisfies (either before or after
the amendment) the preamendment conditions for the subsidy. In general, a
retirement type subsidy is a subsidy that continues after retirement, but does
not include a qualified disability benefit, a medical benefit, a social security
supplement, or a death benefit (including life insurance). Furthermore, if the
vesting schedule of a Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or becomes
effective, the nonforfeitable percentage (determined as of such date) of such
Participant's Company derived account balance will not be less than the
percentage computed under the Plan without regard to such amendment.
8.02 AMENDMENT FOR TAX EXEMPTION. The Company reserves the right to
amend this Agreement and the Plan and Trust hereunder in such manner as may be
necessary or advisable so that said Trust may continue to qualify as an exempt
employee's trust under the provisions of the Code; and any such amendment may be
made retroactively.
8.03 LIQUIDATION OF TRUST IN EVENT OF TERMINATION. In the event of
termination or partial termination (within the meaning of section 411(d)(3) of
the Code)
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of this Plan and Trust, or complete discontinuance of contributions thereto by
the Company, the rights of all Participants (or in the case of a partial
termination, the rights of Participants affected thereby) to amounts therefore
credited to all their accounts shall be fully vested and nonforfeitable. In the
event of such termination or discontinuance, the Trustees shall, subject to the
direction of the Committee, hold the assets of the Trust in accordance with the
provisions of the Plan and distribute such assets from time to time to
Participants entitled thereto in accordance with such provisions.
8.04 TERMINATION OF PLAN AND TRUST. This Agreement and the Plan and
Trust hereunder shall in any event terminate whenever all property held by the
Trustees shall have been distributed in accordance with the terms hereof.
8.05 AMENDMENT OF VESTING SCHEDULE. If the Plan's vesting schedule is
amended or the Plan is amended in any way that directly or indirectly affects
the computation of a Participant's nonforfeitable percentage, or if the Plan is
deemed amended by an automatic change to or from a top heavy vesting schedule,
each Participant with at least three (3) years of service with the Company may
elect within a reasonable period after the adoption of the amendment or change,
to have his nonforfeitable percentage computed under the Plan without regard to
such amendment or change. The period during which the election may be made shall
commence with the date the amendment is adopted or deemed to be made and shall
end on the latest of (1) sixty (60) days after the amendment is adopted; (2)
sixty (60) days after the amendment becomes effective; or (3) sixty (60) days
after the Participant is issued written-notice of the amendment by the Company
or Plan Administrator.
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ARTICLE IX
ADMINISTRATION OF THE PLAN
9.01 NAMED FIDUCIARIES. The named fiduciaries with respect to the Plan
shall be the Company, the Committee and the Trustees. The Company shall be the
"plan administrator of the Plan for all purposes of ERISA. The responsibilities
of the named fiduciaries shall be allocated as provided herein, and each such
fiduciary shall have only those responsibilities and obligations that are
specifically imposed upon it by this Trust Agreement or by applicable law. It is
intended that each of the named fiduciaries shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under the
Plan and shall not be responsible for any act or omissions of any other
fiduciary. The Company, the Trustees, and the Committee, as named fiduciaries,
shall be entitled to delegate all or any part of their fiduciary
responsibilities, and obligations to any other person or entity. In the event of
any such delegation, (a) the named fiduciary shall not be liable for any act or
omission of the person to whom the responsibility has been delegated as long as
the selection and retention of such person is prudent and (b) the person to whom
the fiduciary powers and obligations are delegated shall be responsible only for
the proper exercise of the powers, duties, responsibilities, and obligations
that have been specifically delegated to him. The responsibilities of the named
fiduciaries are:
(i) The Company shall have the sole responsibility to
appoint and remove (in accordance with Section 10.11) the Trustees and
successor Trustees, to appoint and remove or replace the members of
the
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Committee as herein provided, and shall have such other powers and
do such other things - as are herein specifically provided.
(ii) The Trustees shall, except as otherwise specifically
provided in this Agreement, have the sole responsibility for the
investment and control of the assets of the Plan and Trust in
accordance with the terms hereof, and for the appointment, retention,
and/or removal of any Investment Manager.
(iii) The Committee shall have the sole responsibility
for the general administration of the Plan and for carrying out its
provisions. In addition, the Committee shall have such powers and
responsibilities as are herein specifically provided.
The Committee shall conduct its business in accordance with
the terms of this Article IX.
9.02 APPOINTMENT OF COMMITTEE. The Company shall appoint a Committee
of three (3) or more persons, any or all of whom may be officers or employees of
the Company or any other individuals, to be known as the "Retirement Plan
Committee. Each Trustee shall be deemed to have been appointed a member of the
Committee by the Company if the Company has not appointed any other persons to
be members of the Committee. If the Committee consists of no members other than
the Trustees, all requirements under the Plan that there be a direction,
designation or other communication between the Committee and the Trustees shall
be disregarded. The members of the Committee shall serve at the pleasure of and
may be removed by the
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Company. Vacancies in the Committee arising by resignation, death, removal, or
otherwise shall be filled by the Company. The number of members of the Committee
shall be as designated by the Company from time to time. The Trustees shall
accept and may rely upon a certification by the Company as to the number and
identity of the individuals comprising the Committee from time to time.
9.03 POWERS OF COMMITTEE. The Committee shall have all powers and
authority necessary in order to carry out its duties and responsibilities in
connection with the administration of the Plan and Trust as herein provided, and
the Committee may make such rules and regulations as it may deem necessary or
desirable to carry out the provisions of the Plan and Trust. The Committee shall
determine any question arising in the administration, interpretation, and
application of the Plan and Trust, including any question submitted by the
Trustees on a matter necessary for them properly to discharge their duties; and
the decision of the Committee shall be conclusive and binding on all persons.
9.04 ACTION BY COMMITTEE. The Committee shall act by a majority of its
members at the time in office and such action may be taken by vote at a meeting
or in writing without a meeting. The Committee may by such majority action
authorize any one or more of its members to execute any direction or document or
take any other action on behalf of the Committee, and in such event any one of
the members of the Committee may certify in writing to the Trustees or any other
person the taking of such action and the name or names of the members of the
Committee so authorized, including himself . The execution of any direction,
document, or certificate on behalf of the Committee by
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any of its members shall constitute his certification of his authority with
respect thereto, and the Trustees or other person shall be protected in
accepting and relying upon any such direction, document, or certificate and is
released from inquiry into the authority of any of the members of the Committee.
Notwithstanding anything to the contrary elsewhere-herein contained, no member
of the Committee shall take any action as a member of the Committee with respect
to any matter concerning himself as a Participant of the Plan.
9.05 DISCRETIONARY ACTION. Wherever under the provisions of this
Agreement the Committee is given any discretionary power or powers, such power
or powers shall not be exercised in such manner as to cause any discrimination
in favor of or against any Employee or class of Employees.
9.06 EVIDENCE ON WHICH COMMITTEE MAY ACT. In taking any action or
determining any fact or question which may arise under this Plan and Trust, the
Committee may, with respect to the affairs of the Company or its Employee, rely
upon any statement by the Company with respect thereto. In the event that any
dispute may arise regarding the payment of any sums or regarding any act to be
performed by the Committee or the Trustees, the Committee may in its sole
discretion direct that such payment be retained or postpone or direct the
postponement of the performance of such act until actual adjudication of such
dispute shall have been made in a court of competent jurisdiction, or until the
Company, the Committee and/or the Trustees shall have been indemnified against
loss to the satisfaction of the Committee; provided, however, that in the event
of any such dispute, the Company may rely upon and act in accordance with any
directions received from the Company.
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9.07 EMPLOYMENT OF AGENTS. The Committee may employ agents, including,
but not limited to, custodians, accountants, consultants, or attorneys, to
exercise and perform such of the powers and duties of the Committee hereunder as
the Committee may delegate to them, and otherwise to render such services to the
Committee as the Committee may determine, and the Committee may enter into
agreements setting forth the terms and conditions of such service. The Committee
may appoint an independent public accountant to audit the Plan. The compensation
of such agents shall be an expense chargeable in accordance with Section 9.08.
The Committee shall be fully protected in delegating any such power or duty to
or in acting upon the advice of any such agent, in whole or in part, and except
as may be required by federal law, shall not be liable for any act or omissions
of any such agent, the Committee's only duty being to use reasonable care in the
selection and retention of any such agent.
9.08 COMPENSATION AND EXPENSE OF COMMITTEE. The members of the
Committee shall serve without compensation for services as such. The Company
may, but is not obligated to, pay all or part of the expenses of the Committee.
To the extent not paid by the Company, the expenses of the Committee shall be
paid by the Trust. To the extent any expenses which are paid out of the Trust
are properly allocable to an Investment Medium or to the separate account of a
Participant, they shall be so allocated and charged. Such expenses shall include
any expenses incident to the functioning of the Trust, including, but not
limited to, attorneys' fees and the compensation of other agents, accounting and
clerical charges, expenses, if any, of being bonded as required by ERISA, and
other costs of administering the Trust.
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9.09 INDEMNIFICATION OF COMMITTEE MEMBERS. The Company shall indemnify
and hold harmless each member of the Committee from and against any and all
claims, losses, damages, expenses (including reasonable attorneys' fees approved
by the Company), and liability (including any reasonable amounts paid in
settlement with the Company's approval), arising from any act or omission of
such member, except when the same is judicially determined to be due to the
willful misconduct of such member.
ARTICLE X.
THE TRUSTEES
10.01 POWERS OF TRUSTEES. It shall be the duty of the Trustees to hold
and, subject to the provisions of this Article, to invest and reinvest the funds
of the Trust and to make distributions therefrom in accordance with the written
directions of the Committee. The Trustees shall have no responsibility for the
correctness under the terms of the Plan of any written directions which they
receive from the Committee. The Trustees shall not be responsible for the
collection of contributions payable to the Trust by the Company pursuant to
Article IV.
10.02 INVESTMENTS. Except as provided in Section 7.10, the Trustees
shall invest and reinvest the assets of the Trust and keep the same invested,
without distinction between principal and income, subject to the following
general investment policies:
(a) All amounts attributable to a Participant's accounts shall
be invested pursuant to the Participant's investment elections under Section
5.08 in one or more of the Investment Media under the Plan.
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(b) AR interest, dividends, and other income, as well as any
cash proceeds from the sale or disposition of securities or other property,
received with respect to any Investment Media (unless received in additional
shares or investment units of such Investment Media) shall be reinvested in the
same Investment Media which produced such interest, dividends, and other income.
If any distribution with respect to an Investment Media may be received at the
election of the holder of shares or investment units in such Investment Media in
the form of additional shares or investment units or in cash or other property,
the Trustees shall elect to receive it in additional shares of investment units
of the Investment Media.
(c) The Trustees shall have no responsibility for any
investment elections, directions or instructions exercised by Participants
hereunder and shall incur no liability on account of investing or administering
the assets of the Trust in accordance with such elections, directions, or
instructions.
10.03 METHOD OF HOLDING, BUYING, AND SELLING SECURITIES. The Trustees
may keep any or all securities or other property in the name of some other
person, firm, or corporation or in their own name without disclosing fiduciary
capacity. The Trustees may sell at public auction or by private contract,
redeem, or otherwise realize upon any securities, investments, or other property
forming a part of the Trust fund and for such purposes may execute such
instruments and writings and do such things as they shall deem proper.
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10.04 EXERCISE OF RIGHTS.
(a) Each Participant shall have the right to exercise the
powers described in paragraph (b) below or, where required by the Investment
Media, to direct the Trustees to exercise such powers in the manner elected by
the Participant, but only with respect to those stocks, bonds, or other
securities of a corporation, association or trust which are credited to such
Participant's Self-Directed Account under the Plan. The Trustees shall have the
right to exercise the powers described in paragraph (b) with respect to any
stocks, bonds or other securities of a corporation, association or trust which
are not credited to a Participant's Self-Directed Account under the Plan.
(b) The powers described in this paragraph (b) are the
following powers: to vote upon stocks, bonds or other securities of any
corporation, association or trust; to consent to or request any action on the
part of such corporation, association or trust; to give general or special
proxies or powers of attorney, with or without power of substitution; to
participate in reorganizations, recapitalizations, consolidations, mergers, and
similar transactions; to deposit such stocks and other securities in any voting
trust, or with any protective or like committee, or with a trustee, or with
designated depositories; and generally to exercise the powers of an owner
consistent with the requirements of the Plan and ERISA.
10.05 RELIANCE ON TRUSTEES AS OWNERS. No person dealing with the
Trustees shall be required to take any notice of this Agreement, but all persons
so dealing shall be protected in treating the Trustees as the absolute owners
with full power of disposition of all the monies, securities, and other property
of the Trust, and all persons
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dealing with the Trustees are released from inquiry into the decision or
authority of the Trustees and from seeing to the application of monies,
securities, and other property paid or delivered to the Trustees.
10.06 LIQUIDATION OF ASSETS. In the event that cash is required by the
Trustees to effect any action or distribution under this Trust, or to pay any
expenses of this Trust, or for any other reason deemed sufficient by the
Trustees consistent with any outstanding obligations of the Trust, the Trustees
shall take such action as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of cash necessary for
such payments.
10.07 DIRECTION BY COMMITTEE. Whenever the Committee consists of
members other than or in addition to the Trustees, and whenever the Trustees are
required or authorized to take any action hereunder pursuant to any written
direction or determination of the Committee, such direction or determination
shall be sufficient protection to the Trustees if contained in a writing signed
by any one or more of its members authorized to execute documents on behalf of
the Committee pursuant to Section 9.04. By such writing the Committee may
ratify, approve, or confirm any action taken by the Trustees, and upon such
ratification, approval, or confirmation the Trustees shall be protected as
though authorization or determination by the Committee had preceded such action.
In the absence of direction by the Committee as to any matter provided in this
Plan, the Trustees may in their discretion take such action as they deem fit and
proper with respect thereto after reasonable attempts to secure Committee
direction. The Trustees may deliver documents to the Committee by delivering the
same
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to each member of the Committee or by mailing the same, postage prepaid,
addressed to the Committee in care of the Company at its principal office.
10.08 RECORDS AND ACCOUNTING. The Trustees or their designated agent
shall keep accurate and detailed records of their transactions hereunder and all
their accounts, books, and records relating thereto shall be open at all
reasonable times to the inspection of the Committee, the Company, and their
authorized representatives. The Trustees shall render in writing, at least once
each twelve (12) months, accounts of their transactions under this Agreement to
the Company and each member of the Committee, and the Committee (or the Company
if the Trustees are the sole members of the Committee) may approve such accounts
of the Trustees by an instrument in writing delivered to the Trustees. In the
absence of the filing in writing with the Trustees by the Committee (or the
Company if the Trustees are the sole members of the Committee) of exceptions or
objections to any such account within ninety (90) days after the receipt by the
Committee (or the Company if the Trustees are the sole members of the Committee)
of any such account, the Committee (or the Company if the Trustees are the sole
members of the Committee) shall be deemed to have approved such account; and in
such case, or upon the written approval of the Committee (or the Company if the
Trustees are the sole members of the Committee) of any such account, the
Trustees shall be released, relieved, and discharged with respect to all matters
and things set forth in such account. Except as may otherwise be required by
applicable federal law, no person interested in the Trust or otherwise other
than the Company or the Committee may require an accounting or bring any action
against the Trustees with respect to the Trust and its actions as Trustees. In
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any proceeding instituted by the Trustees, the Company, and/or the Committee
with respect to these accounts, only the Company, the Committee, and the
Trustees shall be the necessary parties. The Trustees shall from time to time
make such other reports and furnish such other information concerning the Trust
as the Committee may in writing reasonably request or as may be required by
applicable federal law.
10.09 PAYMENT OF TAXES. The Trustees shall upon direction of the
Company pay out of the Trust fund any and all taxes of any and all kinds,
including without limitation property taxes and income taxes levied or assessed
under existing or future laws upon or in respect of the Trust or any monies,
securities, or other property forming a part thereof or the income therefrom
subject to the terms of any agreements or contracts made with respect to trust
investments which make other provision for such tax payments. The Trustees may
assume that any taxes assessed on or in respect of the Trust or its income are
lawfully assessed unless the Company shall in writing advise the Trustees that
in the opinion of counsel for the Company such taxes are or may be unlawfully
assessed. In the event that the Company shall so advise the Trustees, the
Trustees will, if so requested in writing by the Company, contest the validity
of such taxes in any manner deemed appropriate by the Company or its counsel; or
the Company may itself contest the validity of any such taxes in the name of the
Trustees; and the Trustees agree to execute all documents, instruments, claims,
and petitions necessary or advisable in the opinion of the Company or its
counsel for the refund, abatement, reduction, or elimination of any such taxes.
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10.10 TRUSTEES' COMPENSATION AND EXPENSES. 'The Trustees shall not
receive compensation from the Plan for their services as such, but all
reasonable expenses of the Trustees, including those arising under Section 10.09
hereof may, at the election of the Company, be paid by the Company and unless or
until so paid shall constitute a charge upon the Trust. Such expenses shall
include any expenses incident to the functioning of the Plan, including but not
limited to attorneys' fees and the compensation of other agents, accounting and
clerical charges, the cost of obtaining any bonds required by ERISA, and other
costs of administering the Plan or the Trust. To the extent that any expenses
(including those arising under Section 10.09 hereof) which are paid out of the
Trust are properly allocable to an Investment Medium or to the separate account
of a Participant, they shall be so allocated and charged.
10.11 RESIGNATION OR REMOVAL OF TRUSTEES. Any Trustees acting
hereunder may resign at any time upon thirty (30) days' written notice to the
Company, the Committee and the remaining Trustees, and the Company may remove
any Trustees upon thirty (30) days' written notice to the Trustees and the
Committee; but the Company and such Trustee may by written instrument waive such
notice. If any Trustee shall resign, be removed, or for any other reason cease
to be Trustee, the Company shall appoint a successor Trustee or Trustees.
Subject to the foregoing provisions, any resignation or removal of the Trustee
or appointment of a new Trustee shall be by an instrument in writing and shall
become effective on the date therein specified. Any successor Trustee shall have
the same powers and duties as the succeeded Trustee, subject to such changes as
the Company may then determine. The appointment of any successor
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Trustee or Trustees hereunder shall without any separate instrument or
conveyance immediately vest title to the assets of the Trust in such successor
Trustee or Trustees. Upon request of such successor Trustee or Trustees, the
Company and the Trustee ceasing to act shall execute and deliver such
instruments of conveyance and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
such successor Trustee or Trustees all the right, title, and interest of the
retiring Trustee in and to the Trust funds.
10.12 INDEMNIFICATION OF TRUSTEE. The Company shall indemnify and hold
harmless each Trustee from and against any and all claims, losses, damages,
expenses (including reasonable attorneys' fees approved by the Company), and
liability (including any reasonable amounts paid in settlement with the
Company's approval), arising from any act or omission of such Trustee, except
when the same is judicially determined to be due to the willful misconduct of
such Trustee.
ARTICLE XI.
THE COMPANY
11.01 NO CONTRACT OF EMPLOYMENT. This Trust shall not be construed as
creating any contract of employment between the Company and any Participant,
Employee, or other person, and nothing herein contained shall give any person
the right to be retained in the employ of the Company or otherwise restrain the
Company's right to deal with its employees, including Participants and
Employees, and their hiring,-discharge, layoff, compensation, and all other
conditions of employment in all respects as though this Trust did not exist.
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11.02 NO CONTRACT TO MAINTAIN PLAN. The Company by the creation of the
Plan does not enter into any agreement to maintain the Plan or to make any
future contributions thereto or reimbursement of expenses incurred hereunder.
Each contribution by the Company shall be voluntary, and the Company reserves
the right to suspend payment of its contributions hereunder, and no party hereto
or Participant or any other person shall have any cause or right of action
against the Company by reason of any failure by the Company to make
contributions to the Trust, or by reason of any action by the Company in
terminating the Plan and Trust.
11.03 LIABILITY OF THE COMPANY. Subject to its agreement to indemnify
the members of the Committee and the Trustee, as provided in Sections 9.09 and
10.12, neither the Company nor any person acting in behalf of the Company shall
be liable for any act or omission on the part of any member of the Committee, on
the part of the Trustees, or on the part of any Investment Manager or for any
act performed or the failure to perform any act by any person with respect to
this Agreement, the Plan, or Trust, the Company's only duty being to use
reasonable care in the selection and retention of the Trustees and the members
of the Committee.
11.04 ACTION BY THE COMPANY. Whenever under the terms of this
Agreement the Company is permitted or required to take any action, such action
shall be taken by the Board of Directors, or any duly authorized committee
thereof, or by any officer of the Company thereunto duly authorized, by the
Board of Directors or otherwise. In such event, any such officer may certify to
the Committee or the Trustees or any other person the taking of such action and
the name or names of the officers so authorized,
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including himself or herself. The execution of any direction, document, or
certificate on behalf of the Company by any of its officers shall constitute a
certification of the authority of such officer with respect thereto, and the
Committee, the Trustees, or other person shall be protected in accepting and
relying upon any such direction, document, or certificate and are released from
inquiry into the authority of any officer of the Company.
11.05 SUCCESSOR TO BUSINESS OF THE COMPANY. Unless this Plan and Trust
be sooner terminated, a successor to the business of the Company, by whatever
form or manner resulting, may continue the Plan and Trust by executing as
appropriate supplementary agreement and such successor shall ipso facto succeed
to all the rights, powers, and duties of the Company hereunder. The employment
of any Employee who has continued in the employ of such successor shall not be
deemed to have been terminated or severed for any purposes hereunder.
11.06 DISSOLUTION OF THE COMPANY. If the Company is dissolved by
reason of bankruptcy or insolvency or otherwise, without any provision being
made for the continuation of this Plan and Trust by a successor to the business
of the Company, the Plan and Trust hereunder shall terminate, and the Trustees
shall proceed in the same manner as though the Plan and Trust were being
terminated by the Company as provided in Section 8.03.
ARTICLE XII.
ADDITIONAL PARTICIPATING COMPANIES
12.01 PARTICIPATION. Any subsidiary or affiliate of the Company may,
with the consent of the Company, become a participating employer by action of
the Board
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of Directors of such subsidiary or affiliate adopting the Plan and Trust as a
Plan and Trust for the benefit of its employees. Any such additional
participating employer is hereinafter referred to in this Article XII as a
"Participating Subsidiary."
12.02 EFFECTIVE DATE. The participation of any Participating
Subsidiary shall take effect as of the date of its action to adopt the Plan and
Trust or such other date as it may specify with the Company's approval.
12.03 ADMINISTRATION. Each Participating Subsidiary shall be deemed
the 'Company" and shall have and exercise all the rights, powers, and duties
thereof with respect to the Plan as applied to itself and its employees and that
part of the Trust which represents accounts of Participants employed by it.
Subject to Section 12.04, each Participating Subsidiary hereby authorizes Sutro
& Co. Incorporated to exercise on its behalf all such rights, powers, and
duties, including amendment or termination of the Plan, appointment of the
Trustees and the members of the Committee, and serving as the Plan
Administrator. Each participating employer, including the Company and each
Participating Subsidiary, shall make contributions hereunder on behalf of its
employees in accordance with Article IV.
Forfeitures with respect to any Plan Year shall be applied to
reduce the Matching Contributions for such Plan Year of each such participating
employer in proportion to the amount of Matching Contribution otherwise required
of such participating employer pursuant to Section 4.02.
12.04 TERMINATION. If the Plan shall be terminated by any one
Participating Subsidiary, the Trust shall be valued and the accounts of all
Participants
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adjusted pursuant to Section 5.07 and assets representing the accounts of all
Participants employed by such Participating Subsidiary shall be segregated into
a separate trust and held subject to the provisions of the Plan, and all rights,
powers, and duties of the Company with respect to such separate trust shall be
exercised by such Participating Subsidiary.
ARTICLE XIII.
TOP-HEAVY PROVISIONS
13.01 GENERAL RULE. For any Plan Year for which this Plan is a
"top-heavy plan" as defined in Section 13.03 below, any other provisions of this
Plan to the contrary notwithstanding, this Plan shall be subject to the minimum
contribution provisions set by Section 13.02 and the limitation on contributions
set by Section 13.06.
13.02 MINIMUM CONTRIBUTION PROVISIONS. Each Participant who is a
nonkey employee (as defined in Section 13.05 below) and who is an Employee as of
the last day of such Plan Year shall be entitled to a minimum contribution
which, when added to the amount of any employer contributions (excluding Tax
Deferred Contributions and Matching Contributions made with respect to Plan
Years commencing after January 1, 1989) allocated to the Participant's accounts
under this Plan and all other defined contribution plans maintained by the
Company or any Affiliated Company, will cause the sum of all such contributions
to equal the lesser of (a) three percent (3%) of such Participant's compensation
for such Plan Year or (b) the percentage at which contributions are made for the
key employee (as defined in Section 13.04 below) for whom such percentage is the
highest for such Plan Year; provided, if such Participant
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is also a non-key employee covered under a defined benefit plan maintained by
the Company or an Affiliated Company, such Participant shall be entitled to a
minimum benefit-under such defined benefit plan instead of the minimum
contribution described in this Section 13.02. The minimum contribution described
in this Section 13.02 shall be made even though under other Plan provisions, the
Participant would not otherwise be eligible to receive a contribution because
the Participant failed to complete 1,000 Hours of Service, failed to make
mandatory nondeductible employee contributions to the Plan, or had Compensation
which was less than a stated amount. For purposes of this Section 13.02,
"compensation" shall be determined within the meaning of section 415 of the
Code; provided, however, that in no event shall a Participant's compensation
exceed Two Hundred Thousand Dollars ($200,000) for any Plan Year for Plan Years
beginning prior to January 1, 1994 and One Hundred Fifty Thousand Dollars
($150,000) for any Plan Year for Plan Years beginning on or after January 1,
1994 (or such larger amount as the Secretary of the Treasury may determine for
such Plan Year under section 401(a)(17) of the Code).
13.03 TOP-HEAVY PLAN DEFINITION. This Plan shall be a "top-heavy plan"
for any Plan Year if, as of the determination date (as defined in Section
13.03(a) below), the sum of all accounts under the Plan for Participants
(including former Participants but excluding the accounts of Employees who have
not performed any services for the Company at any time during the five (5) year
period ending on the determination date) who are "key employees" (as defined in
Section 13.04 below) exceeds sixty percent (60%) of the sum of all accounts
under the Plan for all Participants (excluding the
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accounts of former "key employees" and of Employees who have not performed any
services for the Company at any time during the five (5) year period ending on
the determination date) unless the Plan is part of an aggregation group or if
this Plan is part of an aggregation group (as de-fined in Section 13.03(b)
below) which for such Plan Year is a "top-heavy group" (as defined in Section
13.03 below). Solely for purposes of this Section 13.03, a Participant's account
shall include any distribution made in the five (5) year period ending on the
determination date, and any contribution due but unpaid as of the determination
date.
(a) "Determination date" means for any Plan Year the last day
of the immediately preceding Plan Year; provided, the "determination date" for
the first Plan Year shall be the last day of such first Plan Year. If two or
more plans are being aggregated, they shall be aggregated by adding together the
results for each plan as of the determination dates for such plans that fall
within the same calendar year.
(b) "Aggregation group" means the group of plans, if any, that
includes the group of plans that are required to be aggregated and, if the
Committee so elects, the group of plans that are permitted to be aggregated.
(i) The group of plans that are required to be
aggregated (the "required aggregation group") includes:
(A) each plan of the Company and of any
Affiliated Company in which a "key employee" is a member, and
(B) each other plan of the Company and any
Affiliated Company which enables a plan in which a key employee is a
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member to meet the requirements of either section 401(a)(4) or section
410 of the Code.
(ii)The plans that are permitted to be aggregated (the
permissive aggregation group" include any plan that is not part of the
"required aggregation group" that the Committee certifies as
constituting a plan within the "permissive aggregation group." Such
plans may be added to the 'permissive aggregation group" only if,
after the addition, the "aggregation group" as a whole continues to
meet the requirements of both section 401(a)(4) and section 410 of the
Code.
(c) "Top-heavy group"means the "aggregation group," if, as of
the applicable determination date, the sum of the present value of the accrued
benefits for 'key employees" under all defined benefit plans included in the
"aggregation group" plus the aggregate of the accounts of "key employees"
(excluding the accounts of Employees who have not performed any services for the
Company at any time during the five (5) year period ending on the determination
date) under all defined contribution plans included in the "aggregation group'
exceeds sixty percent (60%) of the sum of the present value of the accrued
benefits for all employees under an such defined benefit plans plus the
aggregate accounts for all Employees under such defined contribution plans
(excluding the accounts of former "key employees" and of Employees who have not
performed any services for the Company at any time during the five (5) year
period ending on the determination date). Solely for purposes of this subsection
(c), the accrued benefits of "non-key employees" shall be determined under (i)
the method, if any, that
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uniformly applies for accrual purposes under all defined benefit plans
maintained by the Company and any Affiliated Company, or (H) if there is no such
method, as if such benefit accrued not more rapidly than the slowest accrual
rate permitted under section 411(b)(1)(C) of the Code.
(d) In determining whether this Plan constitutes a" top-heavy
plan," the Committee shall follow the rules set forth in section 416 of the Code
and regulations pertaining thereto.
13.04 KEY EMPLOYEE. The term "key employee" means any Employee (and
any Beneficiary of an Employee) under this Plan who is a "key employee" as
determined in accordance with section 416(i)(1) of the Code.
13.05 NON-KEY EMPLOYEE. The term 'non-key employee" means any
Employee (and any Beneficiary of an Employee) who is a "non-key employee" as
determined in accordance with section 416(i)(2) of the Code.
13.06 LIMITATION ON CONTRIBUTIONS. For each Plan Year that the Plan is
a top-heavy plan, 1.0 shall be substituted for 1.25 as the multiplicand of the
dollar limitation in determining the denominator of the defined benefit plan
fraction and of the defined contribution plan fraction for purposes of section
415(e) of the Code.
ARTICLE XIV.
MISCELLANEOUS
14.01 SPENDTHRIFT PROVISION. It is a condition of the Plan, to which
all rights of each Participant shall be subject, that no right or interest of
any Participant in the Plan or in the Trust shall be assignable or transferable
in whole or in part, either directly
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or indirectly, by operation of law or otherwise, including but not by way of
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy, or -in
any other manner, but excluding devolution by death or acquisition by a guardian
or committee of a mental incompetent, and no rights or interest of any
Participant in the Plan or in the Trust shall be liable for or subject to any
obligation or liability of such Participant except obligations of a Participant
under a qualified domestic relations order within the meaning of section 414(p)
of the Code or obligations to the Trust pursuant to section 7.06.
14.02 APPOINTMENT OF PERSON TO RECEIVE PAYMENT. If a Participant or
Beneficiary entitled to receive any benefits hereunder is an donor or is deemed
by the Company or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, they will be paid to such persons as the
Committee may designate or to the duly appointed guardian. In the event any
amount shall become payable hereunder to any person (or the Beneficiary or
estate of such person), and if after written notice from the Trustees mailed to
such person's last known address as shown on the Committee's records, such
person or personal representative shall not have presented himself to the
Trustees or notified the Trustees in writing of his address within one (1) year
after the mailing of such notice, then the Committee shall in its discretion
appoint one or more of the spouse and blood relatives of such person to receive
such amount, including any amount thereafter becoming due to such person (or
estate), in the proportions determined by them. Any action of the Committee
hereunder shall be binding and conclusive upon all persons.
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14.03 CONSTRUCTION. In any question of interpretation or other matter
of doubt, the Trustees, the Committee, and the Company may rely upon the opinion
of counsel for the Company or any other attorney at law designated by the
Company with the approval of the Trustees. The provisions of this Agreement
shall be construed, administered, and enforced according to the law of the
United States and, to the extent permitted by such law, by the law of the State
of California. Contributions to the Trust shall be deemed to be made in the
State of California.
14.04 IMPOSSIBILITY OF PERFORMANCE. In case it becomes impossible for
the Company, the Committee, or the Trustees to perform any act under this Plan
and Trust, that act shall be performed which in the judgment of the Committee
will most nearly carry out the intent and purpose of this Plan and Trust. AR
parties to this Agreement or in any way interested in this Plan and Trust shall
be bound by any acts performed under such condition.
14.05 DEFINITION OF WORDS. Feminine or neuter pronouns shall be
substituted for those of the masculine form, and the plural shall be substituted
for the singular, in any place or places herein where the context may require
such substitution or substitutions.
14.06 TITLES. The titles of articles and sections are included only
for convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.
14.07 MERGER OR CONSOLIDATION. In the event that this Plan is merged
with or consolidated with any other plan, or the assets or liabilities accrued
under this Plan are
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transferred to any other plan, each Participant's benefit under such other plan
shall be at least as great immediately after such merger, consolidation, or
transfer (if such plan were then to terminate) as the benefit to which such
Participant would have been entitled under this Plan immediately before such
merger, consolidation, or transfer (if the Plan were then to terminate).
14.08 CLAIMS PROCEDURE. In accordance with section 503 of the
ERISA and the regulations of the Secretary of Labor prescribed thereunder:
(a) AR claims for benefits under this Plan shall be filed in
writing with the Committee in accordance with such procedures as the Committee
shall reasonably establish;
(b) The Committee shall, within ninety (90) days of submission
of a claim, provide adequate notice in writing to any claimant whose claim for
benefits under the Plan has been denied, setting forth the specific reasons for
such denial and such other information as is required by said regulations
written in a manner calculated to be understood by the claimant;
(c) The Committee shall, upon written request by a claimant
within sixty (60) days of the receipt of the notice that the claim has been
denied, afford a reasonable opportunity to such claimant for a full and fair
review by the Committee of the decision denying the claim; and
(d) The Committee shall, within sixty (60) days of receipt of
a request for a review, render a written decision on its review setting forth
the specific reasons for such decision, written in a manner to be understood by
the claimant.
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14.09 EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT. The effective date
of this amendment and restatement shall be January 1, 1989, except as otherwise
specifically provided herein, and shall apply only to Employees credited with at
least one (1) Hour of Service on or after said date. Provided, however, that
provisions which were required under the Code to be effective for Plan Years
beginning prior to January 1, 1989, are deemed to have been adopted as of the
required effective date.
14.10 EXECUTION OF AGREEMENT. This Agreement may be executed in any
number of counterparts and each fully executed counterpart shall be deemed an
original.
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IN WITNESS WHEREOF, the Company, by its duly authorized officer, and
the Trustees have caused these presents to be signed and in the case of the
Company, its corporate seal affixed, this 24th day of January, 1997.
SUTRO & CO. INCORPORATED
By: /s/ Mary Jane Delaney
-------------------------------------
Title: Executive Vice-President
TRUSTEES:
/s/ Samuel M. Yates
--------------------------------------
/s/ Sidney Meyers
--------------------------------------
/s/ Allan Johansen
--------------------------------------
-102-
<PAGE> 108
FIRST AMENDMENT
TO
PROFIT-SHARING RETIREMENT PLAN
AND
TRUST AGREEMENT
FOR EMPLOYEES OF SUTRO & CO., INCORPORATED
The PROFIT-SHARING RETIREMENT PLAN AND TRUST AGREEMENT FOR EMPLOYEES OF SUTRO &
CO., INCORPORATED as restated on January 24, 1997 is hereby amended as follows:
1. The first sentence of Section 2.19 is hereby amended as follows:
2.19 "INVESTMENT MEDIA" means such marketable securities, Company
Stock, and/or money market mutual funds, and in such amounts, as are
specifically selected and specified by a Participant in directions to the
Trustees (in such form as may be acceptable to the Trustees) for the
investment of assets held in a Self-Directed Account pursuant to Section
5.09.
2. Section 2.31 is hereby amended as follows:
2.31 "SELF-DIRECTED ACCOUNT" means an account established for the
investment and reinvestment of Tax Deferred Contributions, Voluntary
Contributions, Rollover Contributions and vested Company and Matching
Contributions upon the authorization of the Committee. Said Account may be
invested only in authorized Investment Media.
3. Article 2 is hereby amended by adding the following Section 2.38:
2.38 "COMPANY STOCK" means any class of stock of the Company or an
Affiliate Company which constitutes "qualifying employer securities" as
defined in section 407(d)(5) of ERISA and "employer securities" as defined
in section 409(l) of the Code. Consistent with Part 4 of ERISA, the assets
of the Plan may be used to acquire and hold Company Stock in any
proportions or amounts.
4. Section 4.02(a) is hereby amended as follows:
4.02 MATCHING CONTRIBUTIONS.
(a) Beginning with the Plan Year commencing January 1, 1998, and
for each subsequent Plan Year, the Company shall determine whether it
shall make a Matching Contribution (in cash or property, including Company
Stock, in the discretion of the Company) to the Trust under the Plan for
each eligible Participant for whom the Company made Tax Deferred
Contributions during such Plan Year in accordance with the following
rules:
<PAGE> 109
(i) If the Company's pre-tax Net Profits for a Plan
Year equal or exceed One Million Dollars ($1,000,000), the Company
shall make a Matching Contribution equal to 100% of each eligible
Participant's Tax Deferred Contributions made during such Plan Year,
not to exceed the lesser of (i) three percent (3%) of the Participant's
Compensation during such Plan Year, or (ii) Three Thousand Dollars
($3,000) annually.
(ii) If the Company's pre-tax Net Profits for a Plan
Year are less than One Million Dollars ($1,000,000), the Company may
make a Matching Contribution equal to 100% of each eligible
Participant's Tax Deferred Contributions made during such Plan Year,
not to exceed the lesser of (i) three percent (3%) of the Participant's
Compensation during such Plan Year, or (ii) Three Thousand Dollars
($3,000) annually. The Company, in its discretion, shall determine
whether to make a Matching Contribution for a Plan Year under this
Section 4.02(a)(ii) and, if so, the exact amount or percentage of such
Matching Contribution.
For purposes of this Section 4.02(a), the Net Profits
threshold shall be determined on a Plan Year by Plan Year basis, with
no carryover or carryback of profits to or from any other Plan Year.
The Company's Matching Contribution for any Plan Year shall be reduced
by the amount of forfeitures available for that Plan Year pursuant to
Section 7.05. A Participant shall be eligible for the Matching
Contribution provided by this Section 4.02(a), if, and only if, such
Participant either (A) is an Employee on the last day of the Plan Year
for which the Matching Contribution is made, or (B) died, retired on or
after his Normal Retirement Age, or became disabled (within the meaning
of Section 7.03) during such Plan Year.
(b) Notwithstanding the foregoing, for the calendar
quarter commencing on January 1, 1998 and ending on March 31, 1998, the
Company shall determine whether it shall make a Matching Contribution
to the Trust under the Plan for each eligible Participant for whom the
Company made Tax Deferred Contributions for such calendar quarter in
accordance with the rules set forth in Section 4.02(a) prior to this
amendment, within the time prescribed by Section 4.05(b), as amended.
The Company's Matching Contribution for the remaining portion of the
Plan Year shall be determined in accordance with the rules set forth in
Sections 4.02 and 4.05(b), each as amended, and shall be reduced by the
amount of Matching Contribution made under this Section 4.02(b).
5. The first sentence of Section 4.04 is hereby amended as follows:
4.04 COMPANY CONTRIBUTIONS. For each Plan Year, the
Company may in its sole discretion contribute to the Trust, as a
Company Contribution (in cash or property, including Company Stock, in
the discretion of the Company), an amount up to the sum of (1) twenty
percent (20%) of the portion of the Company's Not Profits for such Plan
Year that does not exceed twenty percent (20%) of the Compensation of
all Participants and (2)
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<PAGE> 110
ten percent (10%) of that portion of such Net Profits, if any, that
exceeds twenty percent (20%) of the Compensation of all Participants.
6. Section 4.05(b) is hereby amended as follows:
(b) Effective January 1, 1998, Matching Contributions, if any,
made by the Company on behalf of each Participant with respect to each
Plan Year shall be paid into the Trust not later than the end of the
three (3) month period immediately following the end of such Plan Year.
Matching Contributions shall be allocated to a Participant's Company
Account.
7. Section 5.07 is hereby amended as follows:
5.07 VALUATION AND ALLOCATION OF ASSETS. The Accounts of each
Participant which are maintained by the Trustees shall be valued by the
Trustees and adjusted to reflect appreciation or depreciation in the
value of the Trust. The value of a Participant Account as of any
Valuation Date shall be the sum of the interests of the Participant
Account invested in each Investment Medium as of the Valuation Date for
each such Investment Medium which is coincident with or immediately
preceding the Valuation Date as of which the Participant Account is
being valued. Such valuations and adjustments of the Participants'
Accounts shall be made so as to preserve for each Account of each
Participant its beneficial interest in each of the Investment Medium
subject to the following rules:
(a) All expenses of the Trust which are allocable to a
Participant Account or Investment Medium shall be charged to such
Account or Investment Medium. All such expenses allocable to an
Investment Medium shall be charged against all Participant Accounts in
the same proportion as the amount credited to such Participant Account
and invested in such Investment Medium bears to the total amount
invested in such Investment Medium. All such expenses allocable to a
Participant Account shall be charged against the interest of such
Account invested in each Investment Medium in the same proportion as
each such interest bears to the total value of the Account.
(b) Company Stock held by the Trust shall be valued according
to the following rules: (1) in the case of Company Stock that is
publicly traded on a national securities exchange, such stock shall be
valued by reference to the closing price of such stock on such exchange
on the last trading day of the month for which such stock is being
valued and (2) in the case of Company Stock that is not publicly traded
on a national securities exchange, such stock shall be valued as of the
first day of each Plan Year, or such other time as established by the
Trustees, by determining the fair market value of such stock through
the use of an independent appraiser.
3
<PAGE> 111
(c) Any Company Stock received by the Trustees as a stock
split, dividend, or as a result of a reorganization or other
recapitalization of the Company shall be allocated in the same manner
as the Company Stock to which it is attributable is then allocated.
(d) All cash dividends paid to the Trustees with respect
to Company Stock that has been allocated to a Participant's Account as
of the quarterly date on which the dividend is received by the Trustees
shall be allocated to the Participant's Account. If a Participant (or
Beneficiary) has a current right to a distribution in Company Stock and
such stock has not yet been registered in the name of the Participant
(or Beneficiary) as of the record date of any dividend on such stock,
such dividend shall be distributed to the Participant (or Beneficiary).
8. Article 15 is hereby added in its entirety to read as follows:
ARTICLE XV
TENDER OFFERS AND VOTING OF COMPANY STOCK
15.01 TENDER OFFERS FOR COMPANY STOCK. Notwithstanding any
other provision of the Plan to the contrary, in the event an offer is
received by the Trustees (including but not limited to a tender offer
or exchange offer within the meaning of the Securities Exchange Act of
1934, as from time to time amended and in effect) to acquire any or all
shares of Company Stock held by the Trust (an "Offer"), the discretion
or authority to sell, exchange or transfer any of such shares shall be
determined in accordance with the following rules:
(a) The Trustees shall have no discretion or authority to
sell, exchange or transfer any of such shares pursuant to such Offer
except to the extent, and only to the extent, that the Trustees are
timely directed to do so in writing by each Participant with respect to
any such shares that are allocated to such Participant's Accounts. Upon
timely receipt of such instructions, the Trustees shall, subject to the
provisions of (c) and (l) of this Section, exchange or transfer
pursuant to such Offer, only such shares as to which instructions were
given. The Trustees shall use their best efforts to communicate or
cause to be communicated to each Participant the consequences of any
failure to provide timely instructions to the Trustees. In the event,
under the terms of an Offer or otherwise, any shares of Company Stock
tendered for sale, exchange or transfer pursuant to such Offer may be
withdrawn from such Offer, the Trustees shall follow such instructions
respecting the withdrawal of such shares from such Offer in the same
manner and the same proportion as is timely received by the Trustees
from the Participants entitled under this subsection (a) to give
instructions as to the sale, exchange or transfer of securities
pursuant to such Offer.
(b) In the event that an Offer for fewer than all of the
shares of Company Stock held by the Trustees in the Trust is received
by the Trustees, each Participant shall be entitled to direct the
Trustees as to the acceptance or rejection of such Offer (as provided
by subsection (a) above) with respect to the largest portion of such
Company
4
<PAGE> 112
Stock as may be possible given the total number or amount of shares of
Company Stock the Plan may sell, exchange or transfer pursuant to the
Offer based upon the instructions received by the Trustees from all
Participants who timely instruct the Trustees pursuant to this
subsection to sell, exchange or transfer such shares pursuant to such
Offer, each on a pro rata basis in accordance with the maximum number
of shares each such Participant would have been permitted to direct
under subsection (a) had the Offer been for all shares of Company Stock
held in the Trust.
(c) In the event an Offer is received by the Trustees and
prior to termination of such Offer, another Offer is received by the
Trustees for the shares subject to the first Offer, the Trustees shall
use their best efforts under the circumstances to solicit instructions
from the Participants (i) with respect to shares tendered for sale,
exchange or transfer pursuant to the first Offer, whether to withdraw
such tender, if possible, and, if withdrawn, whether to tender any
shares so withdrawn for sale, exchange or transfer pursuant to the
second Offer and (ii) with respect to shares not tendered for sale,
exchange or transfer pursuant to the first Offer, whether to tender or
not to tender such shares for sale, exchange or transfer pursuant to
the second Offer. The Trustees shall follow all such instructions
received in a timely manner from Participants in the same manner and in
the same proportion as provided in subsection (a) above. With respect
to any further Offer for any Company Stock received by the Trustees and
subject to any earlier Offer (including successive Offers from one or
more existing offerors), the Trustees shall act in the same manner as
described above.
(d) With respect to any Offer received by the Trustees, the
Trustees shall distribute, at the Company's expense, copies of all
relevant material including but not limited to material filed with the
Securities and Exchange Commission with such Offer or regarding such
Offer, and shall seek confidential written instructions from each
Participant who is entitled to respond to such Offer. The identities of
Participants and the amount of Company Stock allocated to their
Accounts shall be determined from the list of Participants delivered to
the Trustees by the Company which shall take all reasonable steps
necessary to provide the Trustees with the latest possible information.
(e) The Trustees shall distribute and/or make available to
each Participant who is entitled to respond to an Offer an instruction
form to be used by each such Participant who wishes to instruct the
Trustees. The instruction form shall state that (i) if the Participant
fails to return an instruction form to the Trustees by the indicated
deadline, the Company Stock with respect to which he is entitled to
give instructions will not be sold, exchanged or transferred pursuant
to such Offer, (ii) the Participant will be a named fiduciary (as
described in subsection (j) below) with respect to all shares for which
he is entitled to give instructions, and (iii) the Company acknowledges
and agrees to honor the confidentiality of the Participant's
instructions to the Trustees.
(f) Each Participant may choose to instruct the Trustees in
one of the following two ways: (i) not to sell, exchange or transfer
any shares of Company Stock for which he is entitled to give
'instructions, or (ii) to sell, exchange or transfer some or all
5
<PAGE> 113
Company Stock for which he is entitled to give instructions. The
Trustees shall follow up with additional mailings and postings of
bulletins, as reasonable under the time constraints then prevailing, to
obtain instructions from Participants not otherwise responding to such
requests for instructions. Subject to subsection (c), the Trustees
shall then sell, exchange or transfer shares according to instructions
from Participants, except that Company Stock for which no instructions
are received shall not be sold, exchanged or transferred.
(g) The Company shall furnish former Participants who have
received distributions of Company Stock so recently as to not be
shareholders of record with the information given to Participants
pursuant to subsections (d), (e) and (f) of this Section. The Trustees
are hereby authorized to sell, exchange or transfer pursuant to an
Offer any such Company Stock in accordance with appropriate
instructions from such former Participants.
(h) The Trustees shall not express any opinion or give any
advice or recommendation to any Participant concerning the Offer, nor
shall they have any authority or responsibility to do so. The Trustees
shall have no duty to monitor or police the party making the Offer.
(i) The Trustees shall not reveal or release a Participant's
instructions to the Company, its officers, directors, employees, or
representatives. If some but not all Company Stock held by the Trust is
sold, exchanged, or transferred pursuant to an Offer, the Company, with
the Trustees' cooperation, shall take such action as is necessary to
maintain the confidentiality of Participants' records including without
limitation, establishment of a security system and procedures which
restrict access to Participant records and retention of an independent
agent to maintain such records. If an independent record keeping agent
is retained, such agent must agree, as a condition of its retention by
the Company, not to disclose the composition of any Participant
Accounts to the Company, its officers, directors, employees, or
representatives.
(j) Each Participant shall be a named fiduciary (as that term
is defined in section 402(a)(2) of ERISA) with respect to Company Stock
allocated to his Accounts under the Plan solely for purposes of
exercising the rights of a shareholder with respect to an Offer
pursuant to this Section 15.01 and voting rights pursuant to Section
15.02.
(k) The Trustees shall have the discretion or authority to
sell, exchange or transfer shares pursuant to an Offer to the extent,
and only to the extent, any such shares are not allocated to
Participants' Accounts. In exercising their fiduciary responsibility
with respect to such sale, exchange or transfer, the Trustees may
delegate their discretion or authority to an independent third party
who shall serve as a fiduciary or may seek advice from a third party
with respect to exercising their fiduciary responsibility.
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<PAGE> 114
(l) In the event a court of competent jurisdiction shall issue
an opinion or order to the Plan, the Company or the Trustees an opinion
or order, which shall, in the opinion of counsel to the Company or the
Trustees, invalidate, in all circumstances or in any particular
circumstances, any provision or provisions of this Section regarding
the determination to be made as to whether or not Company Stock held by
the Trustees shall be sold, exchanged or transferred pursuant to an
Offer or cause any such provision or provisions to conflict with
securities laws, then, upon notice thereof to the Company or the
Trustees, as the case may be, such invalid or conflicting provisions of
this Section shall be given no further force or effect.
15.02 VOTING OF COMPANY STOCK. Notwithstanding any other
provision of the Plan. to the contrary, the voting of all Company Stock
held in the Trust Fund shall be voted by the Trustees as provided
below:
(a) If the Company has a registration-type class of securities
(as defined in section 409(c)(4) of the Code), then with respect to all
corporate matters, each Participant shall be entitled to direct the
Trustees as to the voting of all Company Stock allocated and credited
to his Accounts. If the Company does not have a registration-type class
of securities, then only with respect to such matters as the approval
or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of trade or business, or such similar
transactions as may be prescribed in Treasury Regulations, each
Participant shall be entitled to direct the Trustees as to the voting
of all Company Stock allocated and credited to his Accounts.
(b) All Participants entitled to direct such voting shall be
notified by the Company, pursuant to its normal communications with
shareholders, of each occasion for the exercise of such voting rights
within a reasonable time before such rights are to be exercised. Such
notification shall include all information distributed to shareholders
either by the Company or any other party regarding the exercise of such
rights. Such Participants shall be so entitled to direct the voting of
fractional shares (or fractional interests in shares), provided,
however, that the Trustees may, to the extent possible, vote the
combined fractional shares (or fractional interests in shares) so as to
reflect the aggregate direction of all Participants giving directions
with respect to fractional shares (or fractional interests in shares).
(c) The Trustees shall not express any opinion or give my
advice or recommendation to any Participant concerning the voting
direction of Company Stock allocated to his Account, nor shall they
have any authority or responsibility to do so.
(d) The Trustees shall maintain confidentiality with respect
to the voting directions of all Participants and shall not reveal or
release a Participant's voting directions to the Company, its officers,
directors, employees, or representatives. The Company, with the
Trustees' cooperation, may take such action as is necessary to maintain
the confidentiality of Participants' records including without
limitation,
7
<PAGE> 115
establishment of a security system and procedures which restrict access
to Participant records and retention of an independent agent to
maintain such records. If an independent record keeping agent is
retained, such agent must agree, as a condition of its retention by the
Company, not to disclose the voting directions of any Participant to
the Company, its officers, directors, employees, or representatives.
(e) Each Participant shall be a named fiduciary (as that term
is defined section 402(a)(2) of ERISA) with respect to Company Stock
for which he has the right to direct the voting under the Plan but
solely for the purpose of exercising voting rights pursuant to this
Section 15.02 or Offers pursuant to Section 15.01.
(f) The Trustees shall have the discretion or authority to
exercise any voting rights of any Company Stock to the extent, and only
to the extent, any such Company Stock is not allocated to Participants'
Accounts or a Participant fails to direct the Trustees as to the
exercise of voting rights arising under any Company Stock credited to
his Accounts. In exercising their fiduciary responsibility with respect
to voting, the Trustees may delegate their discretion or authority to
an independent third party who shall serve as a fiduciary or may seek
advice from a third party with respect to their fiduciary
responsibility.
(g) In the event a court of competent jurisdiction shall issue
an opinion or order to the Plan, the Company or the Trustees, which
shall, in the opinion of counsel to the Company or the Trustees,
invalidate, in all circumstances or in any particular circumstances,
any provision or provisions of this Section regarding the manner in
which Company Stock held in the Trust shall be voted or cause any such
provision or provisions to conflict with ERISA, then, upon notice
thereof to the Company or the Trustees, as the case may be, such
invalid or conflicting provisions of this Section shall be given no
further force or effect.
15.03 STOCK RIGHTS, WARRANTS OR OPTIONS. In the event any
rights, warrants, or options are issued on Company Stock allocated to
Participants' Accounts, the Trustees shall exercise them or sell them
as directed by the Participant. With respect to any rights, warrants,
or options issued on Company Stock not allocated to Participants'
Accounts, the Trustees shall have the discretion or authority to
exercise them for the acquisition of additional Company Stock to the
extent that cash is then available in the Trust Fund or to sell them.
Any Company Stock acquired in this fashion shall be treated as Company
Stock purchased by the Trustees for the net price paid and shall be
allocated in the same manner as the funds used to purchase the Company
Stock were or would be allocated under the provisions of the Plan and
any' proceeds from the sale of any right, warrant, or option shall be
allocated in accordance with the source of the Company Stock with
respect to which the rights, warrants, or options were issued.
15.04 SECURITIES LAW LIMITATION. The Trustees shall not be
required to engage in any transaction, including without limitation,
directing the purchase or sale of Company Stock or permitting
contributions or withdrawals, which they determine in their
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<PAGE> 116
sole discretion might tend to subject the Trustees, the Plan, the
Company, or any Participant or Beneficiary to a liability under federal
or state securities laws.
10. The effective date of this First Amendment shall be January 1, 1998.
Executed this 11th day of March, 1998 at San Francisco, California.
Employer: Sutro & Co., Incorporated
By: /s/ JOHN LUIKART
-------------------------------------
President and Chief Executive Officer
Trustees:
____________________________________
____________________________________
____________________________________
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<PAGE> 117
CERTIFICATION BY SECRETARY
OF
SUTRO & CO., INCORPORATED
I hereby certify that I am the duly elected, qualified and acting
secretary of the Sutro & Co., Incorporated ("Company") and that John Luikart,
who is President and Chief Executive Officer of the Company is authorized to act
on behalf of the Company to make amendments to the Profit-Sharing Retirement
Plan and Trust for Employees of Sutro & Co., Incorporated.
Dated: March 11, 1998
By: /s/ MARY JANE DELANEY
---------------------
Secretary
10
<PAGE> 1
Exhibit 4.4
PROFIT-SHARING RETIREMENT PLAN
AND
TRUST AGREEMENT
FOR EMPLOYEES OF TUCKER ANTHONY INCORPORATED
This Trust Agreement is made as of the 1st day of January, 1989, by and
between TUCKER ANTHONY INCORPORATED, a Massachusetts corporation having its
principal places of business in Boston, Massachusetts and New York, New York
(hereinafter called the "Company"), and Richard K. Howe, Vincent Morano and
Dennis J. O'Connor (hereinafter called the "Trustees").
W I T N E S S E T H T H A T:
WHEREAS the Company recognized the contribution being made to the
successful operation of its business by its employees and desired to reward such
contribution and therefore established a profit sharing plan entitled
"Profit-Sharing Plan For Employees of Tucker, Anthony & R. L. Day, Inc." and a
separate trust agreement to accompany said plan entitled "Tucker, Anthony & R.
L. Day, Inc. Retirement Trust Agreement", which have been subsequently amended
from time to time; and
WHEREAS the Company now desires to amend, restate and combine said
profit sharing plan and accompanying trust agreement in their entirety to comply
with the Tax Reform Act of 1986 and to permit employees who are or
<PAGE> 2
shall hereafter become eligible as participants hereunder to share in additional
Company contributions through salary reduction and matching contribution
arrangements and to make various other changes thereto;
NOW, THEREFORE, the Company and the Trustees, each in consideration of
the covenants, agreements, and declarations of the other, mutually covenant,
agree, and declare as follows:
<PAGE> 3
ARTICLE I
Introduction
1.01 Creation of Trust. There has been hereby established a trust known
as the "PROFIT-SHARING RETIREMENT TRUST FOR EMPLOYEES OF TUCKER ANTHONY
INCORPORATED" (formerly known as the "Tucker, Anthony & R. L. Day, Inc.
Retirement Trust Agreement") (the "Trust"). The Trustees shall receive any
contributions paid to the Trust and all contributions so received, together with
the income therefrom, shall be held, managed, and administered as a fund in
trust pursuant to the terms of this Agreement. The Trustees hereby confirm their
acceptance of the Trust created hereunder and agree to perform the provisions of
this Agreement on their part to be performed.
1.02 Interpretation of Trust Agreement. The Trust is established for
the exclusive benefit of the eligible Employees and their Beneficiaries. So far
as possible, this Agreement shall be interpreted in a manner consistent with
this intent and with the intent of the Company that the Trust established
hereunder shall continue to be a profit sharing plan and to satisfy those
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and
of the Internal Revenue Code of 1986 (the "Code") relating to exempt employees'
trusts, as either of them may from time to time be amended. Except as otherwise
provided in Section 4.05 hereof, under
3
<PAGE> 4
no circumstances shall any property, whether corpus or income of the Trust
hereunder, or any funds contributed to the Trust, ever revert to or be used or
enjoyed by the Company or be used for any purpose other than for the exclusive
benefit of the eligible Employees or their Beneficiaries.
4
<PAGE> 5
ARTICLE II
Definitions
Whenever used in this Agreement, unless the context clearly indicates
otherwise, the following words shall have the following meanings:
2.01 "Affiliated Company" means (a) a corporation which, together with
the Company, is a member of a controlled group of corporations (as defined in
Section 414(b) of the Code), (b) a trade or business (whether or not
incorporated) which is under common control (as defined in Section 414(c) of the
Code) with the Company, (c) a corporation, partnership, or other entity which,
together with the Company, is a member of an affiliated service group (as
defined in Section 414(m) of the Code), or (d) any entity required to be
aggregated with the Company under Section 414(o) of the Code.
2.02 "Agreement" means this Agreement, as amended from time to time.
2.03 "Anniversary Date" means December 31 in each year.
2.04 "Beneficiary" means the person or persons designated by a
Participant, pursuant to the provisions of Section 7.04 of this Agreement, to
receive distribution of such Participant's share upon his death, and includes a
co-beneficiary or a contingent beneficiary. The term "Beneficiary" also
includes a Participant's surviving spouse if such spouse is deemed to be such
Participant's Beneficiary pursuant to section 7.04.
5
<PAGE> 6
2.05 "Board of Directors" means the board of directors of the Company in
office from time to time or the Executive Committee of such board, with respect
to such powers as have been delegated to it by the Board.
2.06 "Break in Service" means any Plan Year during which an Employee has
not completed or been credited with more than 500 Hours of Service with the
Company and/or an Affiliated Company.
2.07 "Committee" means the Administrative Committee constituted under
Article IX of this Agreement in office from time to time.
2.08 "Company" means Tucker Anthony Incorporated and also means any
successor to all or a major portion of its business which adopts this Plan and
Trust pursuant to Section 11.05. "Company Division" means each separate
operating division of the Company.
2.09 "Company Contributions" means the contributions, if any, made by
the Company pursuant to Section 4.03.
2.10 "Compensation" of a Participant means all of the compensation of an
Employee paid by the Company as reported on Form W-2 on account of services
rendered to the Company. Notwithstanding the foregoing, (i) Compensation shall
include all amounts which would have been paid to a Participant as Compensation
but for an election by such Participant under
6
<PAGE> 7
Section 125 or 401(k) of the Code, (ii) Compensation shall not include any
amounts includible on Form W-2 which are
(A) attributable to any group insurance or other employee
welfare plan or any non-cash fringe benefit, prize or award;
(B) paid under a long-term deferred compensation plan or
agreement; or
(C) imputed to the Participant under Section 7872 of the Code
as a result of a loan from the Company to the Participant;
and (iii) a Participant's Compensation for any Plan Year shall not exceed
$200,000 (subject to cost-of-living adjustments made by the Secretary of
Treasury or his delegate). In determining the Compensation of a Participant for
purposes of the limitation described in the preceding sentence for any Plan
Year, the rules of Section 414(q)(6) of the Code shall apply, except that in
applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age nineteen (19) before the close of such Plan Year.
2.11 "Employee" means any person who is employed by the Company and who
is scheduled to complete at least 1,000 Hours of Service in a Plan Year,
excluding employees who are non-resident aliens whose compensation
7
<PAGE> 8
constitutes foreign source income for United States federal income tax purposes.
An Employee's employment shall be deemed to have commenced on the date on which
he first performs an Hour of Service as an Employee.
2.12 "Family Member" means an individual who is described as such in
Section 414(q)(6)(B) of the Code and who is a Participant of the Plan.
2.13 "Highly Compensated Employee" means any individual who is described
as such in Section 414(q) of the Code and who is a Participant of the Plan.
2.14 "Hour of Service" means:
(a) Each hour for which an employee is directly or
indirectly paid or entitled to payment by the Company or an
Affiliated Company for the performance of duties. These hours
shall be credited to the employee for the Plan Year(s) in which
the duties are performed; and
(b) Each hour for which an employee is directly or indirectly
paid or entitled to payment by the Company or an Affiliated Company on account
of a period of time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to vacation, holiday,
illness, incapacity (including disability), layoff, jury duty or other similar
reason. These hours shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations which
8
<PAGE> 9
are incorporated herein by reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Company or an Affiliated
Company. The same hours shall not be credited under both paragraph (a) or
paragraph (b), as the case may be, and under this paragraph (c). These hours
shall be credited to the employee for the Plan Year(s) to which the award or
agreement pertains rather than the Plan Year in which the award, agreement, or
payment is made; and
(d) each hour credited, at the rate of forty (40) hours per week
for each week involved, for the following periods of time:
(i) Unpaid periods of absence authorized by the Company
in accordance with standard personnel policies of the Company,
provided the employee returns to employment with the Company
immediately upon the expiration of such authorized absence.
(ii) Unpaid military leave while the employee's
reemployment rights are protected by law, provided the employee
returns to employment with the Company within the period
prescribed by law.
Solely for purposes of determining whether a Break in Service
has occurred in a Plan Year, an employee who is absent from work by reason of
pregnancy, birth or adoption of a child, or for purposes of caring for such
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child for a period beginning immediately following such birth or adoption shall
receive credit for the Hours of Service which would otherwise have been credited
to such employee but for such absence, or in any case in which such hours cannot
be determined, eight (8) Hours of Service per day of such absence, provided,
however, that the number of Hours of Service credited under this paragraph shall
not exceed the difference between 501 and the number of Hours of Service with
which such employee would have been credited for the Plan Year to which this
paragraph is applicable. The Hours of Service credited under this paragraph
shall be credited in the first Plan Year in which such credit is necessary to
avoid a Break in Service.
2.15 "Investment Media" means (a) such one or more investment funds,
including without limitation insurance company contracts or accounts and mutual
funds, as are designated by the Trustees from time to time as being available
for investment of Participant accounts under Article V, (b) such marketable
securities as are designated by the Trustees from time to time as being
available for investment of Participant accounts under Article V, and (c) such
other marketable securities (including options) obtainable by the Trustees
either "over the counter" or on a recognized exchange, and/or in money market
mutual funds, and in such amounts, as are specifically selected
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and specified by a Participant in directions to the Trustees (in such form as
may be acceptable to the Trustees) for the investment of assets held in a
Self-Directed Account pursuant to Section 5.08. The Trustees may designate one
or more Investment Media which are sponsored and/or managed by the Company or
any Affiliated Company.
2.16 "Matching Contributions" means the contributions made by the
Company pursuant to Section 4.02.
2.17 "Normal Retirement Age" means age sixty-five (65).
2.18 "Participant" means an Employee who is eligible to
participate in the Plan as determined under Article III of the
Plan.
2.19 "Plan" means the "PROFIT-SHARING RETIREMENT PLAN FOR EMPLOYEES OF
TUCKER ANTHONY INCORPORATED" as set forth herein, together with any and all
amendments hereto.
2.20 "Plan Year" means the fiscal year of the Trust, being the twelve
(12) months ending on each Anniversary Date.
2.21 "Predecessor Company" means Tucker, Anthony & R. L. Day, a
Massachusetts partnership.
2.22 "Salary Reduction Agreement" means the agreement entered into
between the Company and an Employee pursuant to the provisions of Section 3.04.
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2.23 "Self-Directed Account" means an account established pursuant to
the terms of the Plan as in effect on December 31, 1988 for the investment and
reinvestment of Participant deductible and nondeductible contributions made
prior to January 1, 1987 and rollover contributions made prior to January 1,
1989, at the discretion of the Participant.
2.24 "Tax Deferred Contributions" means the contributions made by the
Company pursuant to Section 4.01 of the Plan either in consideration of a
Participant's agreement to reduce his cash Compensation by a comparable amount
pursuant to a Salary Reduction Agreement or as a special Tax Deferred
Contribution designed to cause the test in Section 6.02(a)(i) or (ii) and/or the
test in Section 6.04(a)(i) or (ii) to be satisfied.
2.25 "Trust" means the trust fund created by this Agreement, including
all Investment Media, and held by the Trustees hereunder, into which all
contributions and income thereon shall be paid and out of which all payments and
distributions shall be made.
2.26 "Trustees" means the individuals named herein as trustees and any
duly appointed successor trustee or trustees.
2.27 "Valuation Date" means the Anniversary Date and, with respect to
each Investment Medium, each other date which the Committee in its sole
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discretion selects for the revaluation of that Investment Medium.
2.28 "Year of Service" means one (1) year of an employee's employment
with the Company, any Affiliated Company, and the Predecessor Company, whether
or not continuous, including service as a partner with the Predecessor Company;
provided, however, that the determination of Years of Service will be subject to
the following rules:
(a) The computation of Years of Service will be made on the
basis of Hours of Service performed by the employee during each Plan Year. An
employee will be considered to have completed one (1) Year of Service with
respect to his employment during any Plan Year if and only if such employee
completes at least 1,000 Hours of Service in such Plan Year. Notwithstanding the
foregoing, an employee's Years of Service with respect to a period of employment
prior to January 1, 1989 shall in no event be less than such employee's Years of
Service as determined under the Plan as in effect on December 31, 1988.
(b) In any case in which an individual becomes an employee by reason of
the acquisition of his prior employer by the Company, whether by merger,
acquisition of assets or stock or otherwise, his service with such prior
employer shall be included in determining his Years of Service hereunder only to
the extent that such service is required to be credited
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hereunder by Section 414(a) of the Code and any regulations promulgated
thereunder, by the terms of the agreement pursuant to which such prior employer
was acquired by the Company or by a vote of the Board.
(c) In the event an employee terminates his employment and is
subsequently reemployed, such employee's Years of Service completed prior to
such termination shall be restored upon reemployment.
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ARTICLE III
Participation
3.01 Eligibility for Participation. Each Employee who was a Participant
on December 31, 1988 shall continue to be a Participant on January 1, 1989,
provided he is still employed by the Company on that date. Each other Employee,
including each Employee hired on or after January 1, 1989, shall become a
Participant under the Plan on the day he becomes an Employee.
3.02 Determination of Eligibility by Committee. The determination of an
Employee's eligibility for membership under the Plan shall be made by the
Committee from the Company's records, and the Committee's decisions on these
matters shall be conclusive and binding upon all persons.
3.03 Duration of Eligibility. A Participant shall continue as an active
Participant until he ceases to be an Employee and, except as otherwise
specifically provided herein, shall cease to be an active Participant entitled
to share in contributions hereunder upon such cessation. To the extent a former
Participant's accounts have not been fully distributed, such former Participant
shall be treated as a Participant for purposes of applying the provisions of the
Plan to such accounts. A former Participant shall once again become an active
Participant under the
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Plan on the date on which he again becomes an Employee.
3.04 Salary Reduction Agreement. Effective on and after March 1, 1989
each Participant may, but shall not be required to, enter into a Salary
Reduction Agreement with the Company. The terms of any such Salary Reduction
Agreement shall provide that such Participant agrees to accept a reduction in
cash Compensation from the Company, in an amount equal to any whole number
percentage of his Compensation, in consideration of the Company's agreement to
contribute an equal amount into the Trust on his behalf; provided, such salary
reduction percentage shall not exceed fifteen percent (15%); and provided
further, such reduction shall not exceed $7,627 (or such greater dollar amount
as may be established from time to time by the Secretary of the Treasury under
Section 402(g) of the Code) in any calendar year.
A Participant's Salary Reduction Agreement shall become effective on
such Participant's first pay period in the month which begins not less than
fifteen (15) days (or such shorter period as the Committee allows) after the
delivery of such Salary Reduction Agreement to the Company; provided, however,
that all Salary Reduction Agreements entered into between the Company and any
Employee before March 1, 1989 shall become effective on March 1, 1989.
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A Participant may elect to change (including an election to completely
suspend or subsequently recommence) the percentage rate of his salary reduction
effective (i) prior to January 1, 1990, only as of the first pay period of any
month and (ii) on or after January 1, 1990, only as of the first pay period of
any calendar quarter, plus, for each Plan Year, one additional election to
change effective as of any pay period. Each such change shall be made by written
notice filed with the Committee at least fifteen (15) days (or such shorter
period as the Committee allows) prior to the first day of such month, quarter
or, with respect to the additional change available in each Plan Year beginning
on or after January 1, 1990, pay period, whichever is applicable. No change in
the percentage of a Participant's salary reduction shall be made at any other
time by the Participant and the salary reduction percentage in force at any time
shall continue in force unless and until changed in accordance with the
provisions of the preceding sentences.
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ARTICLE IV
Contributions Under the Plan
4.01 Tax Deferred Contributions. For each month, the Company shall make
a Tax Deferred Contribution to the Trust on behalf of each Participant who has
entered into a Salary Reduction Agreement equal to the amount specified in said
Salary Reduction Agreement. In addition to the Tax Deferred Contributions made
by the Company pursuant to the preceding sentence, the Company may, in order to
cause the test in Section 6.02(a)(i) or (ii) and/or the test in Section
6.04(a)(i) or (ii) to be satisfied for a Plan Year, make a special Tax Deferred
Contribution to the Trust for such Plan Year, which special Tax Deferred
Contribution shall be in an amount determined by the Company in its sole
discretion and shall be allocated for the benefit of all Participants who are
employed on the last day of such Plan Year and are not Highly Compensated
Employees either (i) in proportion to each such Participant's Compensation for
such Plan Year or (ii) in equal dollar amounts on a per capita basis, as shall
be designated by the Company at the time such special Tax Deferred Contribution
is made. Notwithstanding anything hereinabove to the contrary, Tax Deferred
Contributions shall be subject to the limitations described in Article VI of the
Plan.
4.02 Matching Contributions. For each Plan Year, the Company shall
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make a Matching Contribution to the Trust under the Plan for each eligible
Participant who made Tax Deferred Contributions during any part of such Plan
Year equal to one hundred percent (100%) of the Participant's Tax Deferred
Contributions made during such Plan Year (excluding any special Tax Deferred
Contribution made during such Plan Year pursuant to the second sentence of
Section 4.01); provided, however, that, except as provided in the next paragraph
of this Section 4.02, the Matching Contribution made by the Company under this
Section 4.02 on behalf of any eligible Participant for any Plan Year shall not
exceed two percent (2%) of such Participant's Compensation for such Plan Year;
and provided further that the Company's Matching Contribution for any Plan Year
shall be reduced by the amount of forfeitures available for that Plan Year
pursuant to Section 7.05. A Participant shall be eligible for the Matching
Contribution provided by this Section 4.02 if, and only if, such Participant is
an Employee on the Anniversary Date of such Plan Year.
Notwithstanding the foregoing, the Company may, in order to cause the
test in Section 6.04(a)(i) or (ii) to be satisfied for a Plan Year, increase the
maximum percentage of a Participant's Compensation which it will contribute as a
Matching Contribution pursuant to this Section 4.02 on behalf of all
Participants who are employed on the Anniversary Date of such
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<PAGE> 20
Plan Year and are not Highly Compensated Employees.
4.03 Company Contributions. The Company shall contribute as a Company
Contribution to the Plan on account of each Plan Year such amount, if any, as
may be voted by the Board of Directors in its sole discretion for said Plan
Year.
4.04 Payment of Contributions.
(a) The Tax Deferred Contributions made by the Company on behalf
of each Participant with respect to each month shall be paid into the Trust by
the Company not later than thirty (30) days after the last day of such month and
credited to the Participant's Tax Deferred Account. The special Tax Deferred
Contributions, if any, made by the Company pursuant to the second sentence of
Section 4.01 for any Plan Year shall be paid into the Trust not later than the
date required for such contributions to be deductible for Federal income tax
purposes for said Plan Year and allocated among Participants' Tax Deferred
Accounts pursuant to Section 4.01.
(b) The Matching Contributions made by the Company on behalf of
each Participant with respect to each Plan Year shall be paid into the Trust not
later than the date required for such contributions to be deductible for Federal
income tax purposes for such Plan Year and credited to the Participant's Company
Account.
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(c) The Company Contributions, if any, made by the Company on
behalf of Participants for each Plan Year shall be paid into the Trust not later
than the date required for such contributions to be deductible for Federal
income tax purposes for such Plan Year and shall be allocated among
Participants' Company Accounts pursuant to Section 5.04.
4.05 Reversion of Certain Contributions Made by the Company. All Tax
Deferred, Matching, and Company Contributions made pursuant to Sections 4.01,
4.02, and 4.03 shall be made upon the condition that such contributions are
fully deductible for Federal income tax purposes. In the event that any such
deduction is disallowed in whole or in part, then the Company may direct the
Trustees to return the amount of such contributions (to the extent disallowed)
(decreased by losses attributable to such amount, but not including any earnings
attributable to such amount) to the
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Company at any time within the twelve-month period commencing on the date of
disallowance. In the event that the Company shall make Tax Deferred, Matching
and/or Company Contributions pursuant to Sections 4.01, 4.02 or 4.03 on the
basis of a mistake of fact, the Company may direct the Trustees to return the
amount of such contributions (decreased by losses attributable to such amount,
but not including any earnings attributable to such amount) to the Company at
any time within the twelve-month period commencing on the date of contribution.
In no event shall the return of a contribution hereunder cause any Participant's
accounts to be returned to less than they would have been had the nondeductible
or mistaken amount not been contributed.
4.06 Participant Contributions. Effective on and after January 1, 1987,
no Participant contributions shall be permitted under the Plan.
4.07 Rollover Contributions. Notwithstanding anything to the contrary
elsewhere herein, any Participant may make contributions of all or any part of
(a) any amount received by such Participant from another plan and trust
qualified as an exempt employee benefit plan and trust under Sections 401(a) and
501(a) of the Code or (b) any amount received by such Participant out of an
individual retirement account which consists of a prior rollover contribution
from a qualified employee benefit plan which, in either case, but for such
contribution to the Plan, would have been taxable income to such Participant.
Contributions under this Section 4.07 shall be in cash or such other form of
property as is acceptable to the Trustees and as is necessary to avoid
imposition of tax on the distribution. Any such rollover contribution shall be
credited to a Rollover Account for the benefit of such Participant.
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ARTICLE V
Participants' Accounts;
Allocation of Assets and Contributions;
Participants' Investment Elections
5.01 Participants' Accounts. The Committee shall maintain the following
accounts for each Participant under the Plan: (a) a Tax Deferred Account to
which Tax Deferred Contributions made by the Company (including any special Tax
Deferred Contributions made pursuant to the second sentence of Section 4.01, but
which shall be accounted for separately within such Tax Deferred Account) for
the benefit of such Participant shall be credited; (b) a Company Account to
which Matching Contributions and Company Contributions made by the Company for
the benefit of such Participant shall be credited; (c) a Nondeductible Account
to which nondeductible contributions made by such Participant prior to January
1, 1987 were credited; and (d) a Rollover Account to which rollover
contributions made by the Participant pursuant to Section 4.07 shall be
credited; provided, however, that if a Participant made Rollover Contributions
prior to January 1, 1989 which are invested in a Self-Directed Account, a
separate Rollover Account shall be maintained with respect thereto. The rights
of each Participant to the amounts allocated to his Tax Deferred, Nondeductible
and Rollover
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Accounts shall be fully vested and nonforfeitable at all times.
5.02 Allocation of Tax Deferred Contributions. At the time of payment of
any Tax Deferred Contributions to the Trust (including any special Tax Deferred
Contributions made pursuant to the second sentence of Section 4.01), the Company
shall deliver to the Committee a schedule showing the name of each Participant
and the amount of Tax Deferred Contributions made on his behalf. The schedule
shall also contain such other information as the Committee may reasonably
require for the proper administration of the Plan. Upon receiving all such
schedules with respect to any period ending on a Valuation Date and after the
account balances of the Participants have been adjusted as provided in Section
5.06, the Committee shall credit to the Tax Deferred Account of each Participant
listed on such schedules the amount of Tax Deferred Contributions made to the
Trust on his behalf as shown therein.
5.03 Allocation of Matching Contributions (Including Forfeitures). As
soon as practicable after the end of each Plan Year, the Company shall deliver
to the Committee a schedule showing the name of each Participant who was an
Employee of the Company on the Anniversary Date of such Plan Year and the amount
of Matching Contributions (including forfeitures) made on his behalf pursuant to
Section 4.02. The schedule shall also contain such other
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<PAGE> 25
information as the Committee may reasonably require for the proper
administration of the Plan. Upon receiving such schedule with respect to a Plan
Year and after the account balances of the Participants have been adjusted as of
the Anniversary Date of such Plan Year as provided in Section 5.06, the
Committee shall credit to the Company Account of each Participant listed on such
schedule the amount of the Matching Contribution (including forfeitures) made to
the Trust on his behalf as shown therein.
5.04 Allocation of Company Contributions. The Board of Directors shall,
in its sole discretion, determine the portion of the Company Contribution voted
pursuant to Section 4.03 which shall be allocated to each Company Division (if
any). Such determination shall be made on a basis which does not discriminate in
favor of employees who are Highly Compensated Employees (in accordance with
Section 401(a)(4) of the Code) and which complies with the requirements of
Sections 401(a)(26) and 410(b) of the Code. As soon as practicable after the end
of each Plan Year for which a Company Contribution has been made to the Trust
pursuant to Section 4.03, the Company shall deliver to the Committee a schedule
showing the amount of the Company Contribution for the Plan Year allocated to
each Company Division and the name of each Participant who was an Employee of
the Company
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on the Anniversary Date of such Plan Year, and opposite the name of each such
Participant the amount of Compensation paid to such Participant by the Company
during such Plan Year as well as the Company Division to which such Compensation
was properly allocated. In the event that during any Plan Year a Participant is
employed by more than one Company Division, such Participant's Compensation
shall be equitably allocated among the Company Divisions by which he was
employed in accordance with generally accepted accounting principles. The
schedule shall also contain such other information as the Committee may
reasonably require for the proper administration of the Plan. Upon receiving
such schedule and the total contribution, if any, made by the Company for such
Plan Year, and after the account balances of the Participants have been adjusted
as provided in Section 5.06, the Committee shall allocate a portion of the
Company Contribution to the Plan for the Plan Year allocable to each Company
Division to the Company Account of each Participant which bears the same ratio
to such portion of the total Company Contribution allocated to such Company
Division as the Participant's Compensation allocable to such Company Division
for such Plan Year bears to the total Compensation of all eligible Participants
allocated to such Company Division for such Plan Year.
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5.05 Allocation of Rollover Contributions. After the receipt of any
rollover contribution made by a Participant, the Committee shall credit such
rollover contribution to such Participant's Rollover Account.
5.06 Valuation and Allocation of Assets. The Investment Media shall be
valued by the Trustees, as of each Valuation Date, according to such methods as
the Trustees may reasonably select in order to determine the fair market value
of the assets of each such Investment Medium. As of each Valuation Date, each
account maintained under the direction of the Committee shall be adjusted to
reflect the effect of income collected and accrued, realized and unrealized
profit and losses, expenses, and all other transactions during the applicable
period. All expenses of the Trust which are allocable to a Participant account
or Investment Medium shall be charged to such account or Investment Medium. All
such expenses allocable to an Investment Medium shall be charged against all
Participant accounts in the same proportion as the amount credited to such
Participant account and invested in such Investment Medium bears to the total
amount invested in such Investment Medium. All such expenses allocable to a
Participant account will be charged against the interest of such account
invested in each Investment Medium in the same proportion as each such interest
bears to the total value of the account. Such valuations and
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adjustments of the Participants' accounts shall be made so as to preserve for
each account of each Participant its beneficial interest in each of the
Investment Media. The value of a Participant account as of any Valuation Date
shall be the sum of the interests of the Participant account invested in each
investment Medium as of the Valuation Date for each such Investment Medium which
is coincident with or immediately preceding the Valuation Date as of which the
Participant account is being valued.
5.07 Distributions and Forfeitures. Whenever the Trustees shall make any
distribution to or in behalf of a Participant in accordance with the provisions
of Article VII, or whenever a Participant shall forfeit all or any portion of
his Company Account in accordance with the provisions of Section 7.05, such
Participant's accounts shall be charged with the amount of such distribution or
forfeiture. In the event of any distribution or forfeiture of less than the full
amount standing to the credit of a Participant's accounts, the amount charged
against such Participant's accounts shall be charged against such Participant's
interest in the Investment Media in accordance with administrative policies
established by the Committee, or in the absence of any such policy, on a pro
rata basis. All distributions and forfeitures shall be based upon the value of
the Participant's accounts determined as of
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the Valuation Date next preceding such distribution or forfeiture. The accounts
of any Participant shall continue to be maintained under the Plan and shall
continue to share in the allocation of income, gain, losses, appreciation, and
depreciation of assets pursuant to Section 5.06 until such accounts have been
fully distributed.
5.08 Election of Investments.
(a) Each Participant shall have the right to elect the manner of
investment of the amounts standing to the credit of his accounts among the
Investment Media established under the Trust. By such election, the Participant
shall direct the portion of the aggregate amount then credited, and/or
thereafter to be credited, to his accounts which is to be invested by the
Trustees in each of the Investment Media. The Committee shall maintain records
of account at all times adequately reflecting each Participant's interest in
each of the Investment Media. The Committee may establish such procedures,
forms, minimum investment amounts or other limitations with respect to
investment elections, including without limitation special rules to be
applicable only to Self-Directed Accounts, as it may deem necessary or advisable
for the orderly administration of the Plan.
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(b) Each Participant may revoke his investment election as to
any amounts then standing in his accounts and may make a new investment election
in accordance with this Section 5.08 on a daily basis. In the event that such a
new election causes a transfer of assets from one Investment Media to another,
the transfer shall be made by the Trustees as soon as reasonably possible
thereafter.
(c) To make or change an investment election, each Participant
shall give notice to the Committee, by use of the investment direction system
maintained for such purposes by the Committee or its agent. To be effective,
such an investment election must be in accordance with any and all rules and
regulations established by the Committee for this purpose. Any direction made by
a Participant using the investment direction system maintained by the Committee
or its agent shall be treated as a direction made pursuant to Section 404(c) of
ERISA.
(d) If, at any time, there shall be no investment election in
effect with respect to any amount credited to a Participant's accounts, the
Committee shall direct the Trustees to invest all such amounts in such one or
more of the Investment Media as the Committee shall, in its sole discretion,
select on a uniform basis for all such Participants.
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(e) The Company, the Committee and the Trustees shall have no
responsibility for the investment elections of the Participants and shall incur
no liability on account of investing the assets of the Trust in accordance with
such directions.
(f) For purposes of this Section 5.08, all references to a
Participant shall include a former Participant and the Beneficiary of a deceased
Participant to the extent that such former Participant or Beneficiary has an
interest under the Trust.
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ARTICLE VI
Limitations on Contributions
and Allocations
6.01 Contributions to be Deductible. Tax Deferred Contributions,
Matching Contributions, and Company Contributions under the Plan with respect to
a Plan Year shall not exceed that amount which, when added to the contributions
made by the Company for that Plan Year to all other qualified pension or profit
sharing plans maintained by the Company, equals the maximum amount allowable as
a deduction by the Company pursuant to Section 404 of the Code with respect to
such Plan Year.
6.02 Limitation on Tax Deferred Contributions.
(a) At any time during the Plan Year, the Committee
may direct the Company to suspend or reduce the amount of Tax Deferred
Contributions with respect to any Participant if the Committee determines that
such suspension or reduction is necessary to cause the test in either (i) or, to
the extent not prohibited by regulations promulgated by the Secretary of the
Treasury, (ii) below to be met with respect to the amount of Tax Deferred
Contributions for such Plan Year:
(i) the Actual Deferral Percentage for the Highly
Compensated Employees who are eligible for Tax Deferred Contributions is
not more than the Actual Deferral Percentage for all other Employees who
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are eligible for Tax Deferred Contributions multiplied by 1.25; or
(ii) The excess of the Actual Deferral Percentage
for the Highly Compensated Employees who are eligible for Tax Deferred
Contributions over the Actual Deferral Percentage for all other
Employees who are eligible for Tax Deferred Contributions is not more
than two (2) percentage points, and the Actual Deferral Percentage for
the Highly Compensated Employees who are eligible for Tax Deferred
Contributions is not more than the Actual Deferral Percentage for all
other Employees who are eligible for Tax Deferred Contributions
multiplied by two (2).
For purposes of this subsection (a), "Actual Deferral
Percentage" for a specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately for each Employee in such group) of
(A) the amount of Tax Deferred Contributions actually paid over to the Trust on
behalf of the Participant for such Plan Year (including that portion of the
special Tax Deferred Contributions made on behalf of such Participant for the
Plan Year pursuant to the second sentence of Section 4.01 and designated by the
Company to be included for purposes of satisfying the tests in this Section
6.02) to (B) the Participant's total compensation for the Plan Year. To the
extent required by Sections 414(q) and 401(k) of the
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Code and any regulations promulgated thereunder, in determining the deferral
percentage of a Highly Compensated Employee described in Section 414(q)(6)(A) of
the Code who has a Family Member, the Tax Deferred Contribution made on behalf
of such Highly Compensated Employee and the total compensation of such Highly
Compensated Employee shall include the Tax Deferred Contributions and total
compensation of his Family Member(s), and such Family Member(s) shall not be
considered a separate Employee for purposes of determining the Actual Deferral
Percentage for any group under the Plan. "Total compensation" for purposes of
this Section 6.02(a) and Section 6.04(a) means, in the case of each Employee and
for each Plan Year, all compensation received by the Employee from the Company
during the Plan Year as reported on Form W-2 for federal income tax withholding
purposes, plus any amounts that would have been received by the Employee from
the Company as total compensation during the Plan Year but for an election under
section 125 or 401(k) of the Code. In no event shall an Employee's total
compensation for any Plan Year exceed, for purposes of this Plan, $200,000
(subject to cost-of-living adjustments made by the Secretary of the Treasury of
his delegate under section 401(a)(17) of the Code).
(b) If, for any Plan Year, the Committee determines that the Tax
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Deferred Contributions made on behalf of Highly Compensated Employees exceed the
limitation set forth in subsection (a) above, the Committee shall direct the
Trustees to reduce the Tax Deferred Contributions of the Highly Compensated
Employees in order of their deferral percentages beginning with the highest of
such percentages, to the extent necessary to cause the Plan to meet the
limitation set forth in subsection (a) above. Any Tax Deferred Contributions so
reduced, together with the income or loss allocable thereto determined in
accordance with Section 401(k) of the Code and the regulations thereunder, shall
be distributed to the Highly Compensated Employee on whose behalf such
contributions were made no later than March 15 of the following Plan Year.
Notwithstanding the foregoing, to the extent provided in regulations issued by
the Secretary of the Treasury, the amount that would otherwise be distributed to
a Participant in accordance with the provisions of this Section 6.02 shall be
reduced by the amount, if any, distributed to the Participant for the year under
Section 6.03.
(c) The Committee shall determine each Plan Year whether the
limitation set forth in subsection (a) above is met and its determination shall
be final and binding on all persons.
6.03 Return of Excess Deferrals. If, during any calendar year, more than
the maximum permissible dollar amount under Section 3.04 of the Plan
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(and Section 402(g) of the Code) is allocated pursuant to one or more cash or
deferred arrangements to a Participant's accounts under this Plan and any other
plan described in Sections 401(k), 408(k), or 403(b) of the Code, the following
provisions shall apply:
(a) No later than March 1 of the next succeeding calendar year,
the Participant may, but is not required to, allocate all or part of such
contributions in excess of the maximum permissible dollar amount ("excess
deferrals") to this Plan. To be effective, such allocation must be in writing,
state that excess deferrals have been made on behalf of such Participant for the
preceding calendar year, and be submitted to the Committee; and
(b) To the extent a Participant allocates excess deferrals in a
timely manner to this Plan pursuant to (a) above, the Committee shall direct the
Trustees to return such excess deferrals, as adjusted for income or losses
attributable thereto determined in accordance with Section 402(g) of the Code
and the regulations thereunder, to the Company for distribution to the
Participant no later than the April 15 following such allocation.
6.04 Limitation on Matching Contributions.
(a) At any time during the Plan Year, the Committee may direct
the Company to suspend or reduce the amount of Matching Contributions
with
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<PAGE> 37
respect to any Participant at any time during the Plan Year, if the Committee
determines that such suspension or reduction is necessary to cause the test in
either (i) or, to the extent not prohibited by regulations promulgated by the
Secretary of the Treasury, (ii) below to be met with respect to such
contributions for such Plan Year:
(i) the Actual Contribution Percentage for the Highly
Compensated Employees who are eligible for Matching Contributions, is
not more than the Actual Contribution Percentage for all other Employees
who are eligible for Matching Contributions, multiplied by 1.25; or
(ii) the excess of the Actual Contribution Percentage
for the Highly Compensated Employees who are eligible for Matching
Contributions, over the Actual Contribution Percentage for all other
Employees who are eligible for Matching Contributions, is not more than
two (2) percentage points, and the Actual Contribution Percentage for
the Highly Compensated Employees who are eligible for Matching
Contributions, is not more than the Actual Contribution Percentage for
all other Employees who are eligible for Matching Contributions,
multiplied by two (2).
For purposes of this subsection (a), the "Actual Contribution
Percentage" for a specified group of Participants for a Plan Year shall be
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<PAGE> 38
the average of the ratios (calculated separately for each Employee in such
group) of (A) the Matching Contributions actually paid over to the Trust on
behalf of the Participant for such Plan Year (including that portion of the
special Tax Deferred Contributions made on behalf of such Participant for the
Plan Year pursuant to the second sentence of Section 4.01 and designated by the
Company to be included for purposes of satisfying the tests in this Section
6.04) to (B) the Participant's total compensation (as defined in Section
6.02(a)) for the Plan Year. To the extent required by Sections 414(q) and 401(m)
of the Code and any regulations promulgated thereunder, in determining the
contribution percentage of a Highly Compensated Employee described in Section
414(q)(6)(A) of the Code who has a Family Member, the Matching Contributions
made on behalf of and the Compensation of such Highly Compensated Employee shall
include the Matching Contributions and total compensation of his Family
Member(s), and such Family Member(s) shall not be considered a separate
Participant for purposes of determining the Actual Contribution Percentage for
any group under the Plan.
(b) If, for any Plan Year, the Committee determines the Matching
Contributions made on behalf of Highly Compensated Employees exceed the
limitation set forth in subsection (a) above, the Committee shall direct the
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<PAGE> 39
Trustees to distribute to the Highly Compensated Employees, in order of their
contribution percentages beginning with the highest of such percentages, the
amount necessary to cause the Plan to meet such limitation for such Plan Year.
All such Matching Contributions together with the income and loss allocable
thereto determined in accordance with Section 401(m) of the Code and the
regulations thereunder, shall be distributed to the Highly Compensated Employee
on whose behalf such contributions were made no later than March 15 of the
following Plan Year.
6.05 Limitations on Allocations. Notwithstanding anything hereinabove to
the contrary, the sum of the amounts credited to the accounts of any Participant
for any Plan Year pursuant to Section 5.02 (dealing with Tax Deferred
Contributions), Section 5.03 (dealing with Matching Contributions), Section 5.04
(dealing with Company Contributions), and this Section 6.05 shall be reduced to
the extent that such amounts would cause the sum of all such contributions
credited to the accounts of such Participant under the Plan for such Plan Year
to exceed the lesser of (a) $30,000 (or, if greater, one-fourth of the defined
benefit dollar limitation set forth in Section 415(b) of the Code, as adjusted
pursuant to Section 415(d) of the Code), or
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<PAGE> 40
(b) twenty-five percent (25%) of such Participant's total compensation
(determined in accordance with Section 415 of the Code and the regulations
thereunder) for such Plan Year.
Any reductions required pursuant to the foregoing sentence shall be made
in the following order:
(i) the Tax Deferred Contributions allocated to such
Participant's Tax Deferred Account pursuant to Section 5.02 shall be
reduced first;
(ii) the Matching Contributions allocated to such Participant's
Company Account pursuant to Section 5.03 shall be reduced next; and
(iii) the Company Contributions allocated to such Participant's
Company Account pursuant to Section 5.04 shall
be reduced last.
In the event any reduction is required pursuant to subsection (i) above, the
amount of such reduction shall be held unallocated by the Trustees and shall be
reapplied in such a way as to reduce succeeding Tax Deferred Contributions on
behalf of such Participant under the Plan. In the event any reduction pursuant
to (ii) or (iii) above is required, the amount of such reduction shall be
allocated and credited pursuant to the procedures set forth in section 5.04
above (with respect to the allocation of Company Contributions) to the Company
Accounts of remaining Participants exclusive
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<PAGE> 41
of any other Participant for whom a reduction for such Plan Year has
been required pursuant to this Section 6.05. Any such reductions which cannot be
so reallocated shall be held unallocated by the Trustees and shall be treated as
if they were a Company Contribution to be allocated under Section 5.04 with
respect to the succeeding Plan Year.
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<PAGE> 42
ARTICLE VII
Payments to or for the Account of
Participants or Terminated Participants
7.01 Restrictions on Payments and Distributions. No money or other
property of the Trust shall be paid out or distributed by the Trustees except
(a) for the purchase or other acquisition of appropriate investments, (b) for
defraying the expenses, including taxes, if any, of administering the Trust as
elsewhere herein provided, (c) for the purpose of making distributions to or for
the account of Participants at the written direction of the Committee in
accordance with the rules set forth below, (d) for the return of Company
contributions pursuant to Section 4.05, (e) for the distribution of amounts
attributable to excess contributions pursuant to Section 6.02(b), 6.03 or
6.04(b) or (f) for the purpose of complying with the terms of a qualified
domestic relations order, within the meaning of Section 414(p) of the Code. All
benefits payable under the Plan shall be paid or provided for solely from the
Trust, and the Company assumes no liability or responsibility therefor.
7.02 Retirement. A Participant shall become fully vested in his accounts
upon attainment of Normal Retirement Age. Upon retirement of a Participant,
which shall be deemed to mean any termination of his employment
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<PAGE> 43
with the Company at or after his Normal Retirement Age, the full amount then
standing to the credit of such Participant's accounts shall be distributed to
him or applied for his benefit as provided in Section 7.07. A Participant who
remains in the active employ of the Company after attaining Normal Retirement
Age shall continue as a Participant for all purposes of the Plan until the date
of his actual retirement.
7.03 Disability Retirement. If the Committee shall determine, on the
basis of such medical evidence as it may reasonably require, that a Participant
is totally incapable of performing his assigned duties with the Company and is
therefore unable to continue in the employ of the Company by reason of the
sickness or disability (whether mental or physical) of such Participant which is
causing such total incapacity, the Committee shall direct the Trustees to apply
the full amount then standing to the credit of such Participant's accounts for
his benefit as provided in Section 7.07. The Committee's determination as to
whether a Participant has become sick or disabled so as to be unable to continue
in the employ of the Company shall be conclusive and binding on all persons.
7.04 Death Benefits.
(a) Upon the death of any Participant who has a
surviving spouse, the Committee shall direct the Trustees to
distribute the full
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<PAGE> 44
amount standing to the credit of such Participant's accounts to the
Participant's surviving spouse, unless the exception provided by paragraph (b)
of this Section 7.04 applies.
(b) The requirement of subsection (a) of this Section 7.04 shall
not apply if (i) the Participant elects to designate a Beneficiary other than
his spouse and his spouse (A) consents in writing to such election, (B) such
election designates a beneficiary which may not be changed without the consent
of the spouse (or the consent of the spouse expressly permits designations by
the Participant without any requirement of further consent by the spouse), and
(C) the spouse's consent acknowledges the effect of such election and is
witnessed by a Plan representative or a notary public, or (ii) if it is
established to the satisfaction of the Committee that the consent of the
surviving spouse could not have been obtained because there is no spouse,
because the spouse cannot be located, or because of other circumstances
prescribed by regulations under Section 417(a)(2) of the Code.
A former spouse shall be treated as a surviving spouse to the
extent benefits must be paid to such former spouse upon the Participant's death
pursuant to a qualified domestic relations order (as defined in Section 414(p)
of the Code), except that no consent shall be required from
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<PAGE> 45
such former spouse with respect to the designation of a Beneficiary to receive
benefits not subject to said order.
(c) If, and only if, a Participant is not married or, if married, is
permitted under this Section 7.04 to designate a Beneficiary other than his
surviving spouse, then such Participant's accounts shall be distributed in
accordance with this subsection (c) of Section 7.04. Such a Participant shall
have the right to designate one or more Beneficiaries, including contingent
Beneficiaries, entitled to receive the amount payable in behalf of such
Participant under the provisions of this Plan in the event of death. Such
designation shall be made in writing in such manner as the Committee shall
determine. A Participant may change such designation from time to time, and may
revoke such designation, provided, however, that any subsequent designation must
meet the requirements of this Section 7.04. Upon the death of any Participant,
the Committee shall direct the Trustees to distribute, for the benefit of such
Participant's Beneficiaries and subject to the provisions of Section 7.08, the
full amount standing to the credit of the Participant's accounts. If a
Participant dies without having designated a Beneficiary, or if none of the
designated Beneficiaries survives the Participant, or if the Committee is in
doubt as to the effective status of a Beneficiary
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<PAGE> 46
designation, payment of any sum that would otherwise have been payable to such
Beneficiary will be made to the first surviving class of the following classes
of successive preference Beneficiaries, all members of such class to share
equally: the Participant's (i) surviving spouse; (ii) surviving issue (including
adopted children and stepchildren), per stirpes; (iii) surviving parents; (iv)
brothers and sisters, in equal shares; and (v) executors and administrators. If
a Beneficiary entitled to receive any amount payable in behalf of a Participant
dies before receiving the entire amount to which such Beneficiary is entitled,
the undistributed balance, together with any income or loss accumulated thereon,
shall be distributed to such Beneficiary's estate in accordance with Section
7.07.
7.05 Termination of Employment Prior to Retirement or
Death.
(a) If any Participant's employment with the Company
terminates under circumstances other than by reason of retirement, disability or
death, as provided for under Section 7.02 through 7.04, he shall be entitled to
a vested benefit equal to the sum of (i) 100% of the amounts standing to the
credit of his Tax Deferred Account, Nondeductible Account and Rollover Account,
plus (ii) that percentage of the amount standing to the credit of his Company
Account, based upon his Years of Vesting Service, which shall be
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<PAGE> 47
determined under Schedule A if the Participant was initially hired by the
Company before January 1, 1987 and under Schedule B if the Participant was
initially hired by the Company after December 31, 1986.
<TABLE>
<CAPTION>
Schedule A Schedule B
---------- ----------
Years Vested Years Vested
of Service Percentage of Service Percentage
---------- ---------- ---------- ----------
<S> <C> <C> <C>
Less than 1 0% Less than 3 0%
1 but less than 2 25% 3 or more 100%
2 but less than 3 50%
3 or more 100%
</TABLE>
A Participant whose employment with the Company terminates and
who immediately thereafter becomes an employee of an Affiliated Company shall
not be considered to have terminated his employment for purposes of this Section
until his employment with the Affiliated Company subsequently terminates.
The vested benefit determined in accordance with the foregoing
provision shall never be adjusted or altered in any fashion on account of any
Years of Vesting Service which the Participant might complete upon reemployment
with the Company or an Affiliated Company after a Break in Service, except as
provided in Section 7.06.
(b) The determination of the amount to which such terminated
Participant is entitled in accordance with the foregoing rules shall be made
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<PAGE> 48
by the Committee and communicated to the Trustees.
(c) Any amount standing to the credit of a Participant's Company
Account to which he is not entitled at the time of his termination of employment
shall be forfeited by him upon the earlier of the payment of the full amount to
which such Participant is entitled under the Plan or the incurrence of five (5)
Consecutive Breaks in Service by the Participant. For purposes of the preceding
sentence, a terminated Participant who is not entitled to receive any amount
under the Plan shall be deemed to have received the entire amount to which he is
entitled on the date his employment terminates and shall forfeit his entire
Company Account as of that date. At the close of the Plan Year in which any
forfeitures occur, all such forfeited amounts shall be applied to reduce the
Company's Matching Contribution for such Plan Year.
7.06 Reemployment. If a terminated Participant is reemployed by the
Company, he shall again become an active Participant upon reemployment pursuant
to Section 3.03.
If such a reemployed Participant was not 100% vested in his Company
Account under Section 7.05(a) at the time of his prior termination, the
following special provisions shall apply:
(a) If such a terminated Participant is reemployed after
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<PAGE> 49
incurring five (5) consecutive Breaks in Service, he shall have no rights with
respect to any amounts previously forfeited from his Company Account, and any
portion of his Company Account which has not been distributed shall be held in a
separate, fully vested Company Account until such Participant becomes 100%
vested under Section 7.05(a) whereupon it shall be merged with the Company
Account otherwise maintained for him.
(b) If such a terminated Participant is reemployed before
incurring five (5) consecutive Breaks in Service, the full amount, if any, which
was forfeited from his Company Account as a result of his prior termination
shall be restored to his Company Account as of the date of reemployment. If such
terminated Participant had previously received a distribution of all or any part
of the vested portion of his Company Account, the vested portion of his Company
Account shall thereafter be determined by (i) adding the amount previously
distributed to his current Company Account balance, (ii) multiplying the
resulting sum by his current vesting percentage and (iii) subtracting from the
resulting product the amount previously distributed.
7.07 Methods of Payment.
(a) Whenever under this Article VII any amount is
required to
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<PAGE> 50
be distributed or applied for the benefit of any Participant or Beneficiary or
other person, such distribution shall be made by the payment or commencement of
payments under such one or more of the following methods as the Participant or
Beneficiary may elect.
Option A. One lump sum payment in cash.
Option B. Payments in annual periodic installments, in
cash, reasonably nearly equal in amount, over any
period not exceeding fifteen (15) years.
Option C. One lump sum transfer, in kind, to an individual
retirement account (within the meaning of Section
408(a) of the Code).
If a Participant or Beneficiary fails to make an election under this Section
7.07(a), he shall receive his benefit in a single cash payment pursuant to
Option A. Notwithstanding the foregoing, if the amount standing to the credit of
a Participant's accounts does not exceed $3,500, the Participant or Beneficiary
shall automatically receive his benefit in one lump sum payment in cash.
(b) Whenever during any Plan Year the amount standing to the
credit of a Participant's accounts becomes distributable pursuant to Sections
7.02 through 7.05, distribution at such
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<PAGE> 51
retirement, disability, death or termination of employment, as the case may be,
shall be made or commenced within a reasonable time after the latest of (1) such
retirement, disability, death or termination of employment, (2) the
determination of the allocation to which the Participant is entitled under
Section 5.04 with respect to such Plan Year, or (3) if Section 7.08(a) is
applicable to such Participant, the date the Participant consents to a
distribution pursuant to that Section.
7.08 Restrictions on Method and Timing of Payment. Notwithstanding any
provision to the contrary, in order to comply with Sections 401(a)(9),
411(a)(11) and 414(p) of the Code, the following provisions shall apply:
(a) If the sum of a Participant's account balances to be
distributed upon retirement, disability or severance under Section 7.02, 7.03 or
7.05 is greater than $3,500, such account balances shall not be distributed in
whole or in part until the earlier of (i) the date the Participant attains
Normal Retirement Age or (ii) the Participant's death, unless the Participant
consents to such earlier distribution in writing.
(b) In the case of distribution to a Participant, the period of
years selected under Option B shall be such that the requirements set forth in
both (i) and (ii) below are satisfied at the time distribution to such
Participant is to commence.
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<PAGE> 52
(i) No method of payment hereunder may be selected
which would provide for payment to any person during any period longer
than the life expectancy of the Participant or the joint life and last
survivor expectancy of the Participant and his Beneficiary, determined
using attained ages as of the calendar year in which payments commence
and Table V or VI of Treasury Regulation Section 1.72-9.
(ii) If someone other than the Participant's spouse is
designated to receive benefits, then the period of years over which
installment payments are to be paid shall be such that any period of
years remaining as of the calendar year in which the Participant attains
age seventy and one-half (70-1/2) or any subsequent calendar year shall
meet the minimum distribution incidental benefit requirement which shall
be determined in accordance with regulations promulgated under Section
401(a)(9) of the Code.
For purposes of this Section 7.08(b) and Section
7.08(e), a Participant's Beneficiary shall be determined in accordance
with regulations promulgated under Section 401(a)(9) of the Code.
(c) In no event shall the distribution of a Participant's
Accounts, unless the Participant otherwise elects, begin later than the 60th
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<PAGE> 53
day after the close of the Plan Year in which the later of the following events
occurs:
(i) the Participant's sixty-fifth (65th) birthday;
(ii) the tenth (10th) anniversary of the date on which
the Participant first became a Participant, or
(iii) the Participant's termination of service with the
Company (and any Affiliated Company).
(d) In no event shall distribution of benefits to a Participant
begin later than the April 1 next following the calendar year in which such
Participant attains age seventy and one-half (70-1/2) (the "Required
Distribution Date"). Notwithstanding the foregoing, the Required Distribution
Date for any Participant (i) who is not a "five-percent owner" (within the
meaning of Section 416(i)(1)(B)(i) of the Code) at any time during the five Plan
Year period ending in the calendar year in which the Participant attains age
70-1/2 and (ii) who attains age 70-1/2 before January 1, 1988, shall be no
earlier than the April 1 next following the calendar year in which the
Participant terminates employment with the Company.
(e) In the event a Participant dies before his Required
Distribution Date and his surviving spouse is not his Beneficiary, his
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<PAGE> 54
entire interest shall be paid to his Beneficiary in a lump sum no later than
December 31 of the calendar year containing the fifth (5th) anniversary of the
Participant's death; provided, however, that the Participant's Beneficiary may
elect, no later than December 31 of the calendar year following the calendar
year in which the Participant died, to receive installment payments commencing
no later than such date and payable over a period not exceeding the
Beneficiary's life expectancy. If the Participant's Beneficiary is his surviving
spouse, the Participant's entire interest shall be paid to his surviving spouse
in installment payments commencing no later than the December 31 of the calendar
year in which the Participant would have attained age seventy and one-half
(70-1/2) and payable over a period not exceeding the life expectancy of the
surviving spouse, provided, however, that the surviving spouse always has the
right to elect to receive her benefits in a lump sum. If the spouse dies before
said date, subsequent distributions shall be made as if the spouse had been the
Participant. Life expectancy will be calculated in accordance with Treasury
Regulation Section 1.72-9 and regulations promulgated under Section 401(a)(9) of
the Code.
If a Participant dies on or after his Required Distribution Date, the
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<PAGE> 55
Participant's remaining interest in the Plan shall be distributed at least as
rapidly as under the method of distribution being used as of the date of death.
(f) If, and to the extent that, any portion of a Participant's
account balances is payable to a former spouse or dependent pursuant to a
qualified domestic relations order within the meaning of Sections 401(a)(13)(B)
and 414(p) of the Code, the provisions of said order shall govern the
distribution thereof. Such an order may provide for payments to a former spouse
or dependent even though the Participant is still employed by the Company or is
otherwise not eligible for the distribution of benefits under the Plan.
7.09 Withdrawals During Employment.
(a) Upon written notice given to the Committee at least thirty
(30) days (or such shorter period as the Committee allows) in advance of a
Valuation Date, a Participant may withdraw any amount standing to the credit of
his Nondeductible Account and/or Rollover Account as of such Valuation Date.
(b) Upon written notice to the Committee at least thirty (30)
days prior to a Valuation Date, and if the Participant is one hundred percent
(100%) vested in his Company Account and has withdrawn the full
55
<PAGE> 56
amount, if any, standing to the credit of his Nondeductible and Rollover
Accounts as provided in subsection (a) above, the Participant may elect to
withdraw from his Company Account an amount not less than the lesser of (i)
$1,000 or (ii) 25% of the amount standing to the credit of his Company Account,
as of such Valuation Date, for one or more of the following purposes:
(i) To satisfy any expense arising as a result of
accident, sickness or disability of the Participant or a
member of his immediate family;
(ii) To purchase a primary residence for the Participant;
(iii) To provide for the education of the Participant or a
member of his immediate family;
(iv) To provide for such other types of financial
emergencies as the Committee may deem appropriate in
accordance with Section 9.05.
(c) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who has not yet attained age fifty-nine and one-half (59-1/2) and
has withdrawn the full amount, if any, standing to the credit of his
Nondeductible, Rollover and, if fully vested, Company Accounts
56
<PAGE> 57
as provided in subsections (a) and (b) above, may at any time during his
employment with the Company withdraw all or any portion of the amount
(determined as of such Valuation Date) standing to the credit of his Tax
Deferred Account, excluding any outstanding loan amounts with respect to such
accounts, but only in order, and to the extent necessary, to meet a "Financial
Hardship;" provided, no such withdrawal may exceed the aggregate amount of the
Tax Deferred Contributions (excluding any special Tax Deferred Contributions
made on behalf of such Participant pursuant to the second sentence of Section
4.01) made on his behalf by the Company, reduced by the sum of all prior
withdrawals from such Participant's Tax Deferred Account. The determination that
the Participant is faced with a Financial Hardship and of the amount required to
meet such Financial Hardship which is not reasonably available from other
resources of the Participant shall be made by the Committee in accordance with
uniform and nondiscriminatory standards and policies which shall be adopted by
the Committee and consistently applied to each application for a withdrawal
pursuant to this Section 7.09(c). For purposes of this Section 7.09(c),
"Financial Hardship" shall mean an immediate and heavy financial need which such
Participant is not able to meet from any other reasonably available resources.
In determining that such Participant is not able to
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<PAGE> 58
meet such Financial Hardship from any other sources, the Committee may
reasonably rely upon the written certification of the Participant given in
accordance with the regulations under Section 401(k) of the Code. Subject to the
foregoing and the requirements of Section 401(k) of the Code and any regulations
thereunder, the term "Financial Hardship" shall mean and include the following:
(i) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
(ii) the payment of the tuition for the next semester or
quarter of post-secondary education for the Participant, his spouse,
children, or dependents;
(iii) the medical expenses described in Section 213(d)
of the Code which are incurred by the Participant, his spouse or any
dependent, and which are not covered by insurance; or
(iv) the need to prevent an eviction or mortgage
foreclosure on the Participant's principal residence.
(d) Upon written notice to the Committee at least thirty (30)
days (or such shorter period as the Committee allows) prior to a Valuation Date,
a Participant who is at least fifty-nine and one-half (59-1/2) years old shall
be
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<PAGE> 59
entitled to withdraw all or any portion of the amounts credited to his accounts
under the Plan as of such Valuation Date.
(e) A Participant may specify that a withdrawal under this
Section 7.09 is to be charged to his interest in one or more specific Investment
Media in which the account charged with the withdrawal is invested. Unless so
specified, distribution will be made out of the interests of such account in
each Investment Medium in accordance with the proportion which the interest of
such account in such Investment Medium bears to the total value of such account,
subject however to such restrictions as may be applicable to the particular
Investment Media.
(f) All withdrawals under this Section 7.09 shall be made as
soon as practicable after the Valuation Date next following timely receipt by
the Committee of the Participant's written notice.
7.10 Loans to Participants. Upon written application of a Participant
submitted to the Committee at least thirty (30) days (or such shorter period as
the Committee allows) prior to a Valuation Date, the Committee may direct the
Trustees to lend to such Participant such amount or amounts from his Tax
Deferred Account, as the Committee may determine proper, up to the greater of
(a) fifty percent (50%) of the total aggregate value of such Participant's Tax
Deferred Account (determined as of such Valuation Date) or
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<PAGE> 60
(b) solely for loans made prior to October 19, 1989, $10,000; but only for one
of the purposes enumerated in Section 7.09(c) or to provide for such other
financial contingency as the Committee, in its sole discretion, may deem
appropriate in accordance with Section 9.05. Notwithstanding the foregoing, the
aggregate amount of all outstanding loans, including accrued interest, from the
Plan to a Participant shall not exceed $50,000, reduced by the amount of any
loan repayment made during the one (1) year period ending on the day before the
date on which such loan is to be made. For loans made on or after February 1,
1990, the minimum amount which may be loaned to a Participant under this Section
7.10 shall be $1,000. A Participant may not have more than one loan outstanding
under this Section 7.10 at any given time.
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Committee may make reasonable distinctions
based upon credit-worthiness, other obligations of the Participant and other
factors that may adversely affect the ability to assure repayment. The decision
as to whether a loan shall or shall not be made in any case shall rest solely
within the discretion of the Committee, such discretion to be exercised
consistently with the provisions of Section 9.05 and with such
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<PAGE> 61
procedures as the Committee may establish pursuant to this Section 7.10. Loans
approved under this Section 7.10 shall be made as soon as reasonably practicable
after the Valuation Date next following timely receipt by the Committee of the
Participant's written application.
Each such loan shall be made at such reasonable rate of interest as the
Committee may determine, and shall be subject to such other terms and conditions
as the Committee may deem proper, and shall be evidenced by the promissory note
of the Participant and secured by at least fifty percent (50%) of the
Participant's interest in the Plan. Each such loan shall be repaid by such means
as may be authorized by the Committee, shall be amortized over the term of the
loan in level payments made not less frequently than quarterly, and shall be
repaid within five (5) years unless such loan is used to acquire a dwelling unit
which within a reasonable period of time is to be used (determined at the time
the loan is made) as the principal residence of the Participant in which case
the repayment period shall not exceed twenty (20) years.
Each such loan shall be deemed to be an investment made at the direction
of such Participant and shall be credited to a separate investment account for
the borrowing Participant. An amount equal to the principal amount of such loan
when made shall be
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charged to the interests of such Participant's Tax Deferred Account.
A Participant may specify that a loan under this Section 7.10 is to be
charged to his interest in one or more specific Investment Media in which his
Tax Deferred Account is invested. Unless so specified, the loan amounts shall be
made out of the interest of such account in each Investment Medium in accordance
with the proportion which the interest of such account in such Investment Medium
bears to the total value of such account, subject however to such restrictions
as may be applicable to the particular Investment Media.
All interest and loan repayments shall be credited to the Tax Deferred
Account of such Participant and shall be invested, pursuant to such
Participant's investment elections under Section 5.08. All expenses incurred by
the Committee and the Trustees, including reasonable attorneys' fees and court
costs, as a result of a default by a Participant shall be charged against the
Participant's accounts.
If any loan under this Section 7.10 is in default, as determined in
accordance with the procedures established by the Committee, when any part or
all of the amount standing to the credit of a Participant's accounts is to be
distributed to such Participant or his Beneficiary, the Committee shall direct
the Trustees to apply the amount of such distributable amount
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in payment of the entire outstanding loan principal, and any interest
theretofore accrued, before distributing the balance, if any, to the Participant
or his Beneficiary.
7.11 Discharge of Trustees' Obligation to Make Payments. Whenever the
Trustees are required to make any payment or payments to any person in
accordance with the provisions of this Article VII or Article VIII, the
Committee shall notify the Trustees in writing of such person's last known
address as it appears in the Committee's records; and the obligations of the
Trustees and the Committee to make such payment or payments shall be fully
discharged by mailing the same to the address specified by the Committee.
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ARTICLE VIII
Amendment and Termination
8.01 Right to Amend or Terminate. The Company reserves the right at any
time and from time to time to amend this Agreement, or discontinue or terminate
the Plan and Trust by delivering to the Committee and the Trustees a copy of an
amendment or appropriate Board of Directors' resolution of discontinuance or
termination certified by an officer of the Company; provided, however, that
except as provided in Section 8.02, the Company shall have no power to amend or
terminate this Agreement in such manner as would cause or permit (a) any of the
Trust assets to be diverted to purposes other than for the exclusive benefit of
the Employees of the Company or their Beneficiaries; (b) any reduction in the
amount theretofore credited to any Participant; (c) any portion of the Trust
assets to revert to or become the property of the Company; (d) the rights and
responsibilities of the Committee or the Trustees to be increased without their
written consent, and/or (e) the elimination of an optional form of benefit with
respect to amounts credited to a Participant's accounts before the amendment.
8.02 Amendment for Tax Exemption. The Company reserves the right to
amend this Agreement and the Plan and Trust hereunder in such manner as may be
necessary or advisable so that said Trust may continue to qualify as an
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exempt employees' trust under the provisions of the Code; and any such amendment
may be made retroactively.
8.03 Liquidation of Trust in Event of Termination. In the event of
termination or partial termination (within the meaning of Section 411(d)(3) of
the Code) of this Plan and Trust, or complete discontinuance of contributions
thereto by the Company, the rights of all Participants (or in the case of a
partial termination, the rights of Participants affected thereby) to amounts
theretofore credited to all their accounts shall be fully vested and
nonforfeitable. In the event of such termination or discontinuance, the Trustees
shall, subject to the direction of the Committee, hold the assets of the Trust
in accordance with the provisions of the Plan and distribute such assets from
time to time to Participants entitled thereto in accordance with such
provisions.
8.04 Termination of Plan and Trust. This Agreement and the Plan and
Trust hereunder shall in any event terminate whenever all property held by the
Trustees shall have been distributed in accordance with the terms hereof.
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ARTICLE IX
Administration of the Plan
9.01 Named Fiduciaries. The named fiduciaries with respect to the Plan
shall be the Company, the Committee and the Trustees. The Company shall be the
"plan administrator" of the Plan for all purposes of ERISA. The responsibilities
of the named fiduciaries shall be allocated as provided herein, and each such
fiduciary shall have only those responsibilities and obligations that are
specifically imposed upon it by this Trust Agreement or by applicable law. It is
intended that each of the named fiduciaries shall be responsible for the proper
exercise of its own powers, duties, responsibilities, and obligations under the
Plan and shall not be responsible for any act or omission of any other
fiduciary. The Company, the Trustees, and the Committee, as named fiduciaries,
shall be entitled to delegate all or any part of their fiduciary
responsibilities, and obligations to any other person or entity. In the event of
any such delegation, (a) the named fiduciary shall not be liable for any act or
omission of the person to whom the responsibility has been delegated as long as
the selection and retention of such person is prudent and (b) the person to whom
the fiduciary powers and obligations are delegated shall be responsible only for
the proper exercise of the powers, duties,
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responsibilities, and obligations that have been specifically delegated to him.
The responsibilities of the named fiduciaries are:
(i) The Company shall have the sole responsibility to
appoint and remove (in accordance with Section 10.11) the Trustees and
successor Trustees, to appoint and remove or replace the members of the
Committee as herein provided, and shall have such other powers and do
such other things as are herein specifically provided.
(ii) The Trustees shall, except as otherwise specifically
provided in this Agreement, have the sole responsibility for the
investment and control of the assets of the Plan and Trust in
accordance with the terms hereof, and for the appointment, retention,
and/or removal of any Investment Manager.
(iii) The Committee shall have the sole responsibility for
the general administration of the Plan and for carrying out its
provisions. In addition, the Committee shall have such powers and
responsibilities as are herein specifically provided.
The Committee shall conduct its business in accordance with the terms of this
Article IX.
9.02 Appointment of Committee. The Company shall appoint a Committee of
two or more persons, any or all of whom may be officers or employees of
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the Company or any other individuals, to be known as the "Profit Sharing Plan
Committee." Each Trustee shall be deemed to have been appointed a member of the
Committee by the Company if the Company has not appointed any other persons to
be members of the Committee. If the Committee consists of no members other than
the Trustees, all requirements under the Plan that there be a direction,
designation or other communication between the Committee and the Trustees shall
be disregarded. The members of the Committee shall serve at the pleasure of and
may be removed by the Company. Vacancies in the Committee arising by
resignation, death, removal, or otherwise shall be filled by the Company. The
number of members of the Committee shall be as designated by the Company from
time to time. The Trustees shall accept and may rely upon a certification by the
Company as to the number and identity of the individuals comprising the
Committee from time to time.
9.03 Powers of Committee. The Committee shall have all powers and
authority necessary in order to carry out its duties and responsibilities in
connection with the administration of the Plan and Trust as herein provided, and
the Committee may make such rules and regulations as it may deem necessary or
desirable to carry out the provisions of the Plan and Trust. The Committee shall
determine any question arising in the administration,
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interpretation, and application of the Plan and Trust, including any question
submitted by the Trustees on a matter necessary for them properly to discharge
their duties; and the decision of the Committee shall be conclusive and binding
on all persons.
9.04 Action by Committee. The Committee shall act by a majority of its
members at the time in office and such action may be taken by vote at a meeting
or in writing without a meeting. The Committee may by such majority action
authorize any one or more of its members to execute any direction or document or
take any other action on behalf of the Committee, and in such event any one of
the members of the Committee may certify in writing to the Trustees or any other
person the taking of such action and the name or names of the members of the
Committee so authorized, including himself. The execution of any direction,
document, or certificate on behalf of the Committee by any of its members shall
constitute his certification of his authority with respect thereto, and the
Trustees or other person shall be protected in accepting and relying upon any
such direction, document, or certificate and is released from inquiry into the
authority of any of the members of the Committee. Notwithstanding anything to
the contrary elsewhere herein contained, no member of the Committee shall take
any action as a member of the Committee
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with respect to any matter concerning himself as a Participant of the Plan.
9.05 Discretionary Action. Wherever under the provisions of this
Agreement the Committee is given any discretionary power or powers, such power
or powers shall not be exercised in such manner as to cause any discrimination
in favor of or against any Employee or class of Employees.
9.06 Evidence on Which Committee May Act. In taking any action or
determining any fact or question which may arise under this Plan and Trust, the
Committee may, with respect to the affairs of the Company or its Employees, rely
upon any statement by the Company with respect thereto. In the event that any
dispute may arise regarding the payment of any sums or regarding any act to be
performed by the Committee or the Trustees, the Committee may in its sole
discretion direct that such payment be retained or postpone or direct the
postponement of the performance of such act until actual adjudication of such
dispute shall have been made in a court of competent jurisdiction, or until the
Company, the Committee, and/or the Trustees shall have been indemnified against
loss to the satisfaction of the Committee; provided, however, that in the event
of any such dispute, the Committee may rely upon and act in accordance with any
directions received from the Company.
9.07 Employment of Agents. The Committee may employ agents, including,
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but not limited to, custodians, accountants, consultants, or attorneys, to
exercise and perform such of the powers and duties of the Committee hereunder as
the Committee may delegate to them, and otherwise to render such services to the
Committee as the Committee may determine, and the Committee may enter into
agreements setting forth the terms and conditions of such service. The Committee
may appoint an independent public accountant to audit the Plan. The compensation
of such agents shall be an expense chargeable in accordance with Section 9.08.
The Committee shall be fully protected in delegating any such power or duty to
or in acting upon the advice of any such agent, in whole or in part, and except
as may be required by Federal law, shall not be liable for any act or omission
of any such agent, the Committee's only duty being to use reasonable care in the
selection and retention of any such agent.
9.08 Compensation and Expense of Committee. The members of the Committee
shall serve without compensation for services as such. The Company may, but is
not obligated to, pay all or part of the expenses of the Committee. To the
extent not paid by the Company, the expenses of the Committee shall be paid by
the Trust. To the extent any expenses which are paid out of the Trust are
properly allocable to an Investment Medium or to the separate account of a
Participant, they shall be so allocated and
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charged. Such expenses shall include any expenses incident to the functioning of
the Trust, including, but not limited to, attorneys' fees and the compensation
of other agents, accounting and clerical charges, expenses, if any, of being
bonded as required by ERISA, and other costs of administering the Trust.
9.09 Indemnification of Committee Members. The Company shall indemnify
and hold harmless each member of the Committee from and against any and all
claims, losses, damages, expenses (including reasonable attorneys' fees approved
by the Company), and liability (including any reasonable amounts paid in
settlement with the Company's approval), arising from any act or omission of
such member, except when the same is judicially determined to be due to the
willful misconduct of such member.
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ARTICLE X
The Trustees
10.01 Powers of Trustees. It shall be the duty of the Trustees to hold and,
subject to the provisions of this Article, to invest and reinvest the funds of
the Trust and to make distributions therefrom in accordance with the written
directions of the Committee. The Trustees shall have no responsibility for the
correctness under the terms of the Plan of any written directions which they
receive from the Committee. The Trustees shall not be responsible for the
collection of contributions payable to the Trust by the Company pursuant to
Article IV.
10.02 Investments. Except as provided in Section 7.10, the Trustees shall
invest and reinvest the assets of the Trust and keep the same invested, without
distinction between principal and income, subject to the following general
investment policies:
(a) All amounts attributable to a Participant's accounts shall
be invested pursuant to the Participant's investment elections under Section
5.08 in one or more of the Investment Media under the Plan.
(b) All interest, dividends, and other income, as well as any
cash proceeds from the sale or disposition of securities or other property,
received with respect to any Investment Media shall be credited to each
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Participant's accounts invested in such Investment Media and (unless received in
additional shares or investment units of such Investment Media) shall be
invested pursuant to the Participant's investment elections under Section 5.08.
If any distribution with respect to an Investment Media may be received at the
election of the holder of shares or investment units in such Investment Media in
the form of additional shares or investment units or in cash or other property,
the Trustees shall elect to receive it in additional shares or investment units
of the Investment Media.
(c) The Trustees shall have no responsibility for any investment
elections, directions or instructions exercised by Participants hereunder and
shall incur no liability on account of investing or administering the assets of
the Trust in accordance with such elections, directions, or instructions.
Without limitation of the foregoing, if, at any time, there shall be no
investment election in effect with respect to a Participant, the Trustees shall
invest all amounts contributed in respect of such Participant in such one or
more of the Investment Media as the Committee shall, in its sole discretion,
select on a uniform basis for all such Participants.
10.03 Method of Holding, Buying, and Selling Securities. The Trustees may
keep any or all securities or other property in the name of some other
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person, firm, or corporation or in their own name without disclosing fiduciary
capacity. The Trustees may sell at public auction or by private contract,
redeem, or otherwise realize upon any securities, investments, or other property
forming a part of the Trust fund and for such purposes may execute such
instruments and writings and do such things as they shall deem proper.
10.04 Exercise of Rights. The Trustees are hereby authorized to vote upon any
stock, bonds, or other securities of any corporation, association, or trust at
any time comprising the Trust fund or otherwise consent to or request any action
on the part of such corporation, association, or trust, and to give general or
special proxies or powers of attorney, with or without power of substitution,
and to participate in reorganizations, recapitalizations, consolidations,
mergers, and similar transactions with respect to such securities; to deposit
such stocks and other securities in any voting trust, or with any protective or
like committee, or with a trustee, or with depositaries designated thereby; and
generally to exercise any of the powers of an owner with respect to the stock
and other securities and assets comprising the Trust fund which the Trustees
deem to be for the best interests of the Trust to exercise.
10.05 Reliance on Trustees as Owners. No person dealing with the
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Trustees shall be required to take any notice of this Agreement, but all persons
so dealing shall be protected in treating the Trustees as the absolute owners
with full power of disposition of all the monies, securities, and other property
of the Trust, and all persons dealing with the Trustees are released from
inquiry into the decision or authority of the Trustees and from seeing to the
application of monies, securities, and other property paid or delivered to the
Trustees.
10.06 Liquidation of Assets. In the event that cash is required by the
Trustees to effect any action or distribution under this Trust, or to pay any
expenses of this Trust, or for any other reason deemed sufficient by the
Trustees consistent with any outstanding obligations of the Trust, the Trustees
shall take such action as to the disposition of securities or other property
forming a part of the Trust as will provide the amount of cash necessary for
such payments.
10.07 Direction by Committee. Whenever the Committee consists of members
other than or in addition to the Trustees, and whenever the Trustees are
required or authorized to take any action hereunder pursuant to any written
direction or determination of the Committee, such direction or determination
shall be sufficient protection to the Trustees if contained in a writing signed
by any one or more of its members authorized to execute
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documents on behalf of the Committee pursuant to Section 9.04. By such writing
the Committee may ratify, approve, or confirm any action taken by the Trustees,
and upon such ratification, approval, or confirmation the Trustees shall be
protected as though authorization or determination by the Committee had preceded
such action. In the absence of direction by the Committee as to any matter
provided in this Plan, the Trustees may in their discretion take such action as
they deem fit and proper with respect thereto after reasonable attempts to
secure Committee direction. The Trustees may deliver documents to the Committee
by delivering the same to each member of the Committee or by mailing the same,
postage prepaid, addressed to the Committee in care of the Company at its
principal office.
10.08 Records and Accounting. The Trustees shall keep accurate and detailed
records of their transactions hereunder and all their accounts, books, and
records relating thereto shall be open at all reasonable times to the inspection
of the Committee, the Company, and their authorized representatives. The
Trustees shall render in writing, at least once each twelve (12) months,
accounts of their transactions under this Agreement to the Company and each
member of the Committee, and the Committee (or the Company if the Trustees are
the sole members of the Committee) may approve
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such accounts of the Trustees by an instrument in writing delivered to the
Trustees. In the absence of the filing in writing with the Trustees by the
Committee (or the Company if the Trustees are the sole members of the Committee)
of exceptions or objections to any such account within ninety (90) days after
the receipt by the Committee (or the Company if the Trustees are the sole
members of the Committee) of any such account, the Committee (or the Company if
the Trustees are the sole members of the Committee) shall be deemed to have
approved such account; and in such case, or upon the written approval of the
Committee (or the Company if the Trustees are the sole members of the Committee)
of any such account, the Trustees shall be released, relieved, and discharged
with respect to all matters and things set forth in such account. Except as may
otherwise be required by applicable Federal law, no person interested in the
Trust or otherwise other than the Company or the Committee may require an
accounting or bring any action against the Trustees with respect to the Trust
and its actions as Trustees. In any proceeding instituted by the Trustees, the
Company, and/or the Committee with respect to these accounts, only the Company,
the Committee, and the Trustees shall be the necessary parties. The Trustees
shall from time to time make such other reports and furnish such other
information concerning the Trust as the Committee may in
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writing reasonably request or as may be required by applicable Federal law.
10.09 Payment of Taxes. The Trustees shall upon direction of the Company pay
out of the Trust fund any and all taxes of any and all kinds, including without
limitation property taxes and income taxes levied or assessed under existing or
future laws upon or in respect of the Trust or any monies, securities, or other
property forming a part thereof or the income therefrom subject to the terms of
any agreements or contracts made with respect to trust investments which make
other provision for such tax payments. The Trustees may assume that any taxes
assessed on or in respect of the Trust or its income are lawfully assessed
unless the Company shall in writing advise the Trustees that in the opinion of
counsel for the Company such taxes are or may be unlawfully assessed. In the
event that the Company shall so advise the Trustees, the Trustees will, if so
requested in writing by the Company, contest the validity of such taxes in any
manner deemed appropriate by the Company or its counsel; or the Company may
itself contest the validity of any such taxes in the name of the Trustees; and
the Trustees agree to execute all documents, instruments, claims, and petitions
necessary or advisable in the opinion of the Company or its counsel for the
refund, abatement, reduction, or elimination of any such taxes.
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10.10 Trustees' Compensation and Expenses. The Trustees shall not receive
compensation from the Plan for their services as such, but all reasonable
expenses of the Trustees, including those arising under Section 10.09 hereof
may, at the election of the Company, be paid by the Company and unless or until
so paid shall constitute a charge upon the Trust. Such expenses shall include
any expenses incident to the functioning of the Plan, including but not limited
to attorney's fees and the compensation of other agents, accounting and clerical
charges, the cost of obtaining any bonds required by ERISA, and other costs of
administering the Plan or the Trust. To the extent that any expenses (including
those arising under Section 10.09 hereof) which are paid out of the Trust are
properly allocable to an Investment Medium or to the separate account of a
Participant, they shall be so allocated and charged.
10.11 Resignation or Removal of Trustees. Any Trustee acting hereunder may
resign at any time upon thirty (30) days' written notice to the Company, the
Committee and the remaining Trustees, and the Company may remove any Trustee
upon thirty (30) days' written notice to the Trustees and the Committee; but the
Company and such Trustee may by written instrument waive such notice. If any
Trustee shall resign, be removed, or for any other reason cease to be Trustee,
the Company shall appoint a successor Trustee or
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Trustees. Subject to the foregoing provisions, any resignation or removal of the
Trustee or appointment of a new Trustee shall be by instrument in writing and
shall become effective on the date therein specified. Any successor Trustee
shall have the same powers and duties as the succeeded Trustee, subject to such
changes as the Company may then determine. The appointment of any successor
Trustee or Trustees hereunder shall without any separate instrument or
conveyance immediately vest title to the assets of the Trust in such successor
Trustee or Trustees. Upon request of such successor Trustee or Trustees, the
Company and the Trustee ceasing to act shall execute and deliver such
instruments of conveyance and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
such successor Trustee or Trustees all the right, title, and interest of the
retiring Trustee in and to the Trust funds.
10.12 Indemnification of Trustees. The Company shall indemnify and hold
harmless each Trustee from and against any and all claims, losses, damages,
expenses (including reasonable attorneys' fees approved by the Company), and
liability (including any reasonable amounts paid in settlement with the
Company's approval), arising from any act or omission of such Trustee, except
when the same is judicially determined to be due to the willful
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misconduct of such Trustee.
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ARTICLE XI
The Company
11.01 No Contract of Employment. This Trust shall not be construed as
creating any contract of employment between the Company and any Participant,
Employee, or other person, and nothing herein contained shall give any person
the right to be retained in the employ of the Company or otherwise restrain the
Company's right to deal with its employees, including Participants and
Employees, and their hiring, discharge, layoff, compensation, and all other
conditions of employment in all respects as though this Trust did not exist.
11.02 No Contract to Maintain Plan. The Company by the creation of the Plan
does not enter into any agreement to maintain the Plan or to make any future
contributions thereto or reimbursement of expenses incurred hereunder. Each
contribution by the Company shall be voluntary, and the Company reserves the
right to suspend payment of its contributions hereunder, and no party hereto or
Participant or any other person shall have any cause or right of action against
the Company by reason of any failure by the Company to make contributions to the
Trust, or by reason of any action by the Company in terminating the Plan and
Trust.
11.03 Liability of the Company. Subject to its agreement to indemnify
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the members of the Committee and the Trustees, as provided in Sections
9.09 and 10.13, neither the Company nor any person acting in behalf of the
Company shall be liable for any act or omission on the part of any member of the
Committee, on the part of the Trustees, or on the part of any Investment Manager
or for any act performed or the failure to perform any act by any person with
respect to this Agreement, the Plan, or Trust, the Company's only duty being to
use reasonable care in the selection and retention of the Trustees and the
members of the Committee.
11.04 Action by the Company. Whenever under the terms of this Agreement the
Company is permitted or required to take any action, such action shall be taken
by the Board of Directors, or any duly authorized committee thereof, or by any
officer of the Company thereunto duly authorized, by the Board of Directors or
otherwise. In such event, any such officer may certify to the Committee or the
Trustees or any other person the taking of such action and the name or names of
the officers so authorized, including himself or herself. The execution of any
direction, document, or certificate on behalf of the Company by any of its
officers shall constitute a certification of the authority of such officer with
respect thereto, and the Committee, the Trustees, or other person shall be
protected in accepting
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and relying upon any such direction, document, or certificate and are released
from inquiry into the authority of any officer of the Company.
11.05 Successor to Business of the Company. Unless this Plan and Trust be
sooner terminated, a successor to the business of the Company, by whatever form
or manner resulting, may continue the Plan and Trust by executing an appropriate
supplementary agreement and such successor shall ipso facto succeed to all the
rights, powers, and duties of the Company hereunder. The employment of any
Employee who has continued in the employ of such successor shall not be deemed
to have been terminated or severed for any purposes hereunder.
11.06 Dissolution of the Company. If the Company is dissolved by reason of
bankruptcy or insolvency or otherwise, without any provision being made for the
continuation of this Plan and Trust by a successor to the business of the
Company, the Plan and Trust hereunder shall terminate, and the Trustees shall
proceed in the same manner as though the Plan and Trust were being terminated by
the Company as provided in Section 8.03.
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ARTICLE XII
Additional Participating Companies
12.01 Participation. Any subsidiary or affiliate of the Company may, with the
consent of the Company, become a participating employer by action of the board
of directors of such subsidiary or affiliate adopting the Plan and Trust as a
Plan and Trust for the benefit of its employees. Any such additional
participating employer is hereinafter referred to in this Article XII as a
"Participating Subsidiary."
12.02 Effective Date. The participation of any Participating Subsidiary shall
take effect as of the date of its action to adopt the Plan and Trust or such
other date as it may specify with the Company's approval.
12.03 Administration. Each Participating Subsidiary shall be deemed the
"Company" and shall have and exercise all the rights, powers, and duties thereof
with respect to the Plan as applied to itself and its employees and that part of
the Trust which represents accounts of Participants employed by it. Subject to
Section 12.04, each Participating Subsidiary hereby authorizes Tucker Anthony
Incorporated to exercise on its behalf all such rights, powers, and duties,
including amendment or termination of the Plan, appointment of the Trustees and
the members of the Committee, and serving as the Plan Administrator.
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Each participating employer, including the Company and each Participating
Subsidiary, shall make contributions hereunder on behalf of its employees in
accordance with Article IV. Forfeitures with respect to any Plan Year shall be
applied to reduce the Matching Contributions for such Plan Year of each such
participating employer in proportion to the amount of Matching Contribution
otherwise required of such participating employer pursuant to Section 4.02.
12.04 Termination. If the Plan shall be terminated by any one Participating
Subsidiary, the Trust shall be valued and the accounts of all Participants
adjusted pursuant to Section 5.06 and assets representing the accounts of all
Participants employed by such Participating Subsidiary shall be segregated into
a separate trust and held subject to the provisions of the Plan, and all rights,
powers, and duties of the Company with respect to such separate trust shall be
exercised by such Participating Subsidiary.
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ARTICLE XIII
Top-Heavy Provisions
13.01 General Rule. For any Plan Year for which this Plan is a "top-heavy
plan" as defined in Section 13.03 below, any other provisions of this Plan to
the contrary notwithstanding, this Plan shall be subject to the minimum
contribution provisions set by Section 13.02 and the limitation on contributions
set by Section 13.06.
13.02 Minimum Contribution Provisions. Each Participant who is a non-key
employee (as defined in Section 13.05 below) and who is an Employee as of the
last day of such Plan Year shall be entitled to a minimum contribution which,
when added to the amount of any employer contributions (excluding Tax Deferred
Contributions (other than special Tax Deferred Contributions made pursuant to
the second sentence of Section 4.01) and Matching Contributions made with
respect to Plan Years commencing on or after January 1, 1989) allocated to the
Participant's accounts under this Plan and all other defined contribution plans
maintained by the Company or any Affiliated Company, will cause the sum of all
such contributions to equal the lesser of (a) three percent (3%) of such
Participant's compensation for such Plan Year or (b) the percentage at which
contributions are made for the key employee (as defined in Section 13.04 below)
for whom
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such percentage is the highest for such Plan Year; provided, if such
Participant is also a non-key employee covered under a defined benefit plan
maintained by the Company or an Affiliated Company, such Participant shall be
entitled to a minimum benefit under such defined benefit plan instead of the
minimum contribution described in this Section 13.02. For purposes of this
Section 13.02, "compensation" shall be determined within the meaning of Section
415 of the Code; provided, however, that in no event shall a Participant's
compensation exceed $200,000 for any Plan Year (or such larger amount as the
Secretary of the Treasury may determine for such Plan Year under Section
401(a)(17) of the Code). In determining the "compensation" of a Participant for
purposes of the limitation described in the preceding sentence for any Plan
Year, the rules of Section 414(q)(6) of the Code shall apply, except that in
applying such rules the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age nineteen (19) before the close of such Plan Year.
13.03 Top-Heavy Plan Definition. This Plan shall be a "top- heavy plan" for
any Plan Year if, as of the determination date (as defined in Section 13.03(a)
below), the sum of all accounts under the Plan for Participants (including
former Participants but excluding the accounts of Employees who
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have not performed any services for the Company at any time during the five (5)
year period ending on the determination date) who are "key employees" (as
defined in Section 13.05 below) exceeds sixty percent (60%) of the sum of all
accounts under the Plan for all Participants (excluding the accounts of former
"key employees" and of Employees who have not performed any services for the
Company at any time during the five (5) year period ending on the determination
date) unless the Plan is part of an aggregation group or if this Plan is part of
an aggregation group (as defined in Section 13.03(b) below) which for such Plan
Year is a "top-heavy group" (as defined in Section 13.03(c) below). Solely for
purposes of this Section 13.03, a Participant's account shall include any
distribution made in the five (5) year period ending on the determination date,
and any contribution due but unpaid as of the determination date.
(a) "Determination date" means for any Plan Year the last day of
the immediately preceding Plan Year; provided, the determination date" for the
first Plan Year shall be the last day of such first Plan Year. If two or more
plans are being aggregated, they shall be be aggregated by adding together the
results for each plan as of the determination dates for such plans that fall
within the same calendar year.
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(b) "Aggregation group" means the group of plans, if any, that
includes the group of plans that are required to be aggregated and, if the
Committee so elects, the group of plans that are permitted to be aggregated.
(i) The group of plans that are required to be aggregated
(the "required aggregation group") includes:
(A) each plan (including any terminated plan)
of the Company and of any Affiliated Company in which a "key
employee" is a member, and
(B) each other plan of the Company and any
Affiliated Company which enables a plan in which a key employee
is a member to meet the requirements of either Section
401(a)(4) or Section 410 of the Code.
(ii) The plans that are permitted to be aggregated (the
"permissive aggregation group") include any plan that is not part of the
"required aggregation group" that the Committee certifies as
constituting a plan within the "permissive aggregation group." Such
plans may be added to the "permissive aggregation group" only if, after
the addition, the "aggregation group" as a whole continues to meet the
requirements of both Section 401(a)(4) and Section 410 of the Code.
(c) "Top-heavy group" means the "aggregation group,"
if, as of
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the applicable determination date, the sum of the present value of the accrued
benefits for "key employees" under all defined benefit plans included in the
"aggregation group" plus the aggregate of the accounts of "key employees"
(excluding the accounts of Employees who have not performed any services for the
Company at any time during the five (5) year period ending on the determination
date) under all defined contribution plans included in the "aggregation group"
exceeds sixty percent (60%) of the sum of the present value of the accrued
benefits for all employees under all such defined benefit plans plus the
aggregate accounts for all Employees under such defined contribution plans
(excluding the accounts of former "key employees" and of Employees who have not
performed any services for the Company at any time during the five-year period
ending on the determination date). Solely for purposes of this subsection (c),
the accrued benefits of "non-key employees" shall be determined under (i) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Company and any Affiliated Company, or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under Section 411(b)(1)(C) of the Code.
(d) In determining whether this Plan constitutes a "top-heavy
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plan," the Committee shall follow the rules set forth in Section 416 of the Code
and regulations pertaining thereto.
13.04 Key Employee. The term "key employee" means any Employee (and any
Beneficiary of an Employee) under this Plan who is a "key employee" as
determined in accordance with Section 416(i)(1) of the Code.
13.05 Non-Key Employee. The term "non-key employee" means
any Employee (and any Beneficiary of an Employee) who is a "non-
key employee" as determined in accordance with Section 416(i)(2)
of the Code.
13.06 Limitation on Contributions. For each Plan Year that the Plan is a
top-heavy plan, 1.0 shall be substituted for 1.25 as the multiplicand of the
dollar limitation in determining the denominator of the defined benefit plan
fraction and of the defined contribution plan fraction for purposes of Section
415(e) of the Code.
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ARTICLE XIV
Miscellaneous
14.01 Spendthrift Provision. It is a condition of the Plan, to which all
rights of each Participant shall be subject, that no right or interest of any
Participant in the Plan or in the Trust shall be assignable or transferable in
whole or in part, either directly or indirectly, by operation of law or
otherwise, including but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner, but excluding devolution
by death or acquisition by a guardian or committee of a mental incompetent, and
no rights or interest of any Participant in the Plan or in the Trust shall be
liable for or subject to any obligation or liability of such Participant except
obligations of a Participant under a qualified domestic relations order within
the meaning of Section 414(p) of the Code or obligations to the Trust pursuant
to Section 7.06.
14.02 Appointment of Person to Receive Payment. If a Participant or
Beneficiary entitled to receive any benefits hereunder is a minor or is deemed
by the Company or is adjudged to be legally incapable of giving valid receipt
and discharge for such benefits, they will be paid to such persons as the
Committee may designate or to the duly appointed guardian. In the
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event any amount shall become payable hereunder to any person (or the
Beneficiary or estate of such person), and if after written notice from the
Trustees mailed to such person's last known address as shown on the Committee's
records, such person or personal representative shall not have presented himself
to the Trustees or notified the Trustees in writing of his address within one
(1) year after the mailing of such notice, then the Committee shall in its
discretion appoint one or more of the spouse and blood relatives of such person
to receive such amount, including any amount thereafter becoming due to such
person (or estate), in the proportions determined by them. Any action of the
Committee hereunder shall be binding and conclusive upon all persons.
14.03 Construction. In any question of interpretation or other matter of
doubt, the Trustees, the Committee, and the Company may rely upon the opinion of
counsel for the Company or any other attorney at law designated by the Company
with the approval of the Trustees. The provisions of this Agreement shall be
construed, administered, and enforced according to the laws of the United States
and, to the extent permitted by such laws, by the laws of the Commonwealth of
Massachusetts. All contributions to the Trust shall be deemed to be made in the
Commonwealth of Massachusetts.
14.04 Impossibility of Performance. In case it becomes impossible for
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<PAGE> 96
the Company, the Committee, or the Trustees to perform any act under this Plan
and Trust, that act shall be performed which in the judgment of the Committee
will most nearly carry out the intent and purpose of this Plan and Trust. All
parties to this Agreement or in any way interested in this Plan and Trust shall
be bound by any acts performed under such condition.
14.05 Definition of Words. Feminine or neuter pronouns shall be substituted
for those of the masculine form, and the plural shall be substituted for the
singular, in any place or places herein where the context may require such
substitution or substitutions.
14.06 Titles. The titles of articles and sections are included only for
convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.
14.07 Merger or Consolidation. In the event that this Plan is merged with or
consolidated with any other plan, or the assets or liabilities accrued under
this Plan are transferred to any other plan, each Participant's benefit under
such other plan shall be at least as great immediately after such merger,
consolidation, or transfer (if such plan were then to terminate) as the benefit
to which such Participant would have been entitled under this Plan immediately
before such merger, consolidation, or
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<PAGE> 97
transfer (if the Plan were then to terminate).
14.08 Claims Procedure. In accordance with Section 503 of the ERISA and the
regulations of the Secretary of Labor prescribed thereunder,
(a) All claims for benefits under this Plan shall be filed in
writing with the Committee in accordance with such procedures as the Committee
shall reasonably establish;
(b) The Committee shall, within ninety (90) days of submission
of a claim, provide adequate notice in writing to any claimant whose claim for
benefits under the Plan has been denied, setting forth the specific reasons for
such denial and such other information as is required by said regulations
written in a manner calculated to be understood by the claimant;
(c) The Committee shall, upon written request by a claimant
within sixty (60) days of the receipt of the notice that the claim has been
denied, afford a reasonable opportunity to such claimant for a full and fair
review by the Committee of the decision denying the claim; and
(d) The Committee shall, within sixty (60) days of receipt of a
request for a review, render a written decision on its review setting forth the
specific reasons for such decision, written in a manner to be understood by the
claimant.
14.09 Special Provisions for Certain Leased Employees. A "leased
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<PAGE> 98
employee" shall receive credit for Hours of Service for the entire period during
which he is a leased employee of the Company as if he were an Employee of the
Company; provided, however, a leased employee shall not be an Employee eligible
to participate in the Plan as long as he remains a leased employee. For purpose
of this Section 14.09, the term leased employee means any person (a) who is not
an Employee of the Company or an Affiliated Company and (b) who pursuant to an
agreement between the Company or an Affiliated Company and any other person (a
"leasing organization") has performed services for the Company or an Affiliated
Company of a type historically performed by employees in the business field of
the Company or Affiliated Company on a substantially full-time basis for a
period of at least one (1) year. Notwithstanding the foregoing, if leased
employees constitute less than twenty percent (20%) of the Company's or
Affiliated Company's non-highly compensated work force within the meaning of
Section 414(n)(5) of the Code, a person who is covered by a money purchase
pension plan maintained by the leasing organization which provides a non-
integrated employer contribution rate of at least ten percent (10%) of
compensation, immediate participation, and full vesting shall not be considered
a leased employee.
14.10 Effective Date of Amendment and Restatement. The effective date
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<PAGE> 99
of this amendment and restatement shall be January 1, 1989, except as otherwise
specifically provided herein, and shall apply only to Employees credited with at
least one (1) Hour of Service on or after said date. Notwithstanding the
foregoing, the effective date of Sections 3.04, 4.01 and 4.02 shall be March 1,
1989 and the effective date of the changes contained in Section 13.03 shall be
January 1, 1985.
14.11 Execution of Agreement. This Agreement may be executed in any number of
counterparts and each fully executed counterpart shall be deemed an original.
IN WITNESS WHEREOF the Company, by its duly authorized officer, and the
Trustees have caused these presents to be signed and in the case of the Company,
its corporate seal affixed, this 14th day of December, 1990.
TUCKER ANTHONY INCORPORATED
By: /s/ Richard K. Howe
-----------------------------
Title: Executive Vice President/Secretary
TRUSTEES:
/s/ Richard K. Howe
-----------------------------
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<PAGE> 100
Richard K. Howe
/s/ Vincent Morano
----------------------
Vincent Morano
/s/ Dennis J. O'Connor
----------------------
Dennis J. O'Connor
100
<PAGE> 101
PROFIT-SHARING RETIREMENT PLAN
FOR EMPLOYEES OF TUCKER ANTHONY INCORPORATED
1992 Amendment
A. The Profit-Sharing Retirement Plan for Employees of Tucker Anthony
Incorporated (the "Plan"), originally effective January 1, 1955 and most
recently amended and restated in its entirety effective January 1, 1989, is
hereby amended as follows:
1. The name of the Plan is changed to, and Section 2.19 of the Plan is
amended to define the word "Plan" to mean the "Tucker Anthony Incorporated
Profit Sharing Retirement Plan."
2. Section 7.07 is hereby amended by adding the following new paragraph
at the end thereof:
"(c) To the extent required by Section 401(a)(31) of the Code,
effective for distributions made on or after January 1, 1993, if a
distributee of any "eligible rollover distribution" from the Plan elects to
have such distribution paid directly to an eligible retirement plan and
specifies the "eligible retirement plan" to which such distribution is to
be paid (in such form and at such time as the Committee may prescribe) such
distribution shall be made in the form of a direct trustee-to-trustee
transfer to the "eligible retirement plan" so specified. The terms in the
preceding sentence that are in quotation marks shall have the relevant
meanings prescribed by Section 401(a)(31)."
3. Section 7.09(b) of the Plan is hereby amended to read as follows:
"(b) Upon written notice to the Committee at least thirty (30) days
prior to a Valuation Date, and if the Participant is one hundred percent
(100%) vested in his Company Account and has withdrawn the full amount, if
any, standing to the credit of his Nondeductible and Rollover Accounts as
provided in subsection (a) above, the Participant may elect to withdraw
<PAGE> 102
from his Company Account an amount not less than the lesser of (i) $1,000
or (ii) 25% of the amount standing to the credit of his Company Account,
as of such Valuation Date, for one or more of the following purposes (and
to pay the amount of any taxes reasonably anticipated to result from such
a withdrawal):
(i) the purchase (excluding mortgage payments) of a
principal residence of the Participant;
(ii) the payment of the tuition for the next twelve months of
post-secondary education for the Participant, his spouse, children,
or dependents;
(iii) the payment of medical expenses described in Section
213(d) of the Code which are incurred by the Participant, his
spouse, children, or dependents, and which are not covered by
insurance;
(iv) the need to prevent an eviction or mortgage foreclosure
on the Participant's principal residence; or
(v) to provide for such other types of financial emergencies
as the Committee may deem appropriate in accordance with Section
9.05."
4. The first sentence of Section 7.09(c) of the Plan is hereby amended
by deleting the words "to meet a 'Financial Hardship;' provided" and inserting
in lieu thereof the words "to meet a 'Financial Hardship' and to pay the amount
of any taxes reasonably anticipated to result from such a withdrawal; provided".
5. Subsection 7.09(c)(ii) of the Plan is hereby amended to read as
follows:
"(ii) the payment of tuition for the next twelve months of
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<PAGE> 103
post-secondary education for the Participant, his spouse, children,
or dependents;"
6. Section 7.10(a) of the Plan is hereby amended to read as follows:
"(a) fifty percent (50%) of the total aggregate value of such
Participant's Tax Deferred and Rollover Accounts (determined as of such
Valuation Date) or".
7. Section 10.04 of the Plan is hereby amended to read as follows:
"10.04 Exercise of Rights.
(a) Subject to paragraph (b) below, the Trustees are hereby
authorized to vote upon any stock, bonds, or other securities of any
corporation, association, or trust at any time comprising the Trust fund
or otherwise consent to or request any action on the part of such
corporation, association, or trust, and to give general or special proxies
or powers of attorney, with or without power of substitution, and to
participate in reorganizations, recapitalizations, consolidations,
mergers, and similar transactions with respect to such securities; to
deposit such stocks and other securities in any voting trust, or with any
protective or like committee, or with a trustee, or with depositaries
designated thereby; and generally to exercise any of the powers of an
owner with respect to the stock and other securities and assets comprising
the Trust fund which the Trustees deem to be for the best interests of the
Trust to exercise.
(b) Notwithstanding paragraph (a) above, each Participant shall
have the power to vote, or otherwise act with respect to, the shares in
any Investment Media which are sponsored and/or managed by the Company or
any Affiliated Company that are held by the Trustees for the benefit of
such Participant. Such shares shall be voted, or such other action shall
be taken with respect thereto, in accordance with the Participants'
instructions except as may otherwise be required by applicable law. To
facilitate such right, the Trustees shall have delivered to each
Participant a copy of all proxies, notices, and other relevant information
which are distributed to shareholders of such Investment Media generally
and the Trustees shall establish such procedures for the collection of
Participants' instructions with respect to voting, or taking action with
respect to, such shares and the timely
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<PAGE> 104
transmission of such instructions as they shall determine to be
appropriate. Any such shares with respect to which voting instructions
have been sought but have not been timely received shall not be voted."
B. The effective date of items 1, 3, 4 and 5 of Section A above is January 1,
1992, the effective date of item 2 of Section A above is January 1, 1993, and
the effective date of item 6 of Section A above is December 1, 1992.
C. Said Plan, as so amended, is in all other respects hereby confirmed.
4
<PAGE> 105
TUCKER ANTHONY INCORPORATED
Action by Unanimous Written Consent
The undersigned, being all of the members of the Board of Directors of
Tucker Anthony Incorporated (the "Corporation"), do hereby adopt the following
resolution by action in writing without a meeting:
RESOLVED, the Tucker Anthony Incorporated Profit Sharing Retirement
Plan (the "Plan"), as amended and restated effective January 1, 1989 and
subsequently amended, is hereby further amended as follows:
1. Section 4.07 is hereby amended by adding the following to the end
thereof.
"Notwithstanding the foregoing, rollover contributions made by a
Participant on or after May 1, 1994, shall be credited to such
Participant's Tax Deferred Account."
2. The first sentence of Section 5.01 is hereby amended to read as
follows:
"The Committee shall maintain the following accounts for each
Participant under the Plan: (a) a Tax Deferred Account to which Tax
Deferred Contributions made by the Company (including any special Tax
Deferred Contributions made pursuant to the second sentence of Section
4.01, but which shall be accounted for separately within such Tax
Deferred Account) for the benefit of such Participant and rollover
contributions made by the Participant pursuant to Section 4.07 on or
after May 1, 1994 shall be credited; (b) a Company Account to which
Matching Contributions and Company Contributions made by the Company
for the benefit of such Participant shall be credited; (c) a
Nondeductible Account to which nondeductible contributions made by such
Participant prior to January 1, 1987 were credited; and (d) a Rollover
Account to which rollover contributions made by the Participant
pursuant to Section 4.07 prior to May 1, 1994, shall be credited;
provided, however, that if a Participant made rollover contributions
prior to January 1, 1989 which are invested in a Self-Directed Account,
a separate Rollover Account shall be maintained with respect thereto."
3. Section 5.05 is hereby amended by adding the following to the end
thereof:
"Notwithstanding the foregoing, rollover contributions made by a
Participant on or after May 1, 1994 shall be credited to such
Participant's Tax Deferred Account."
4. Section 7.09(c) is hereby amended by adding the following sentence
immediately following the first sentence thereto:
"Notwithstanding the foregoing, no such withdrawal may exceed the
aggregate amount of the Tax Deferred Contributions (excluding any
special Tax Deferred Contributions made on behalf of such Participant
pursuant to the second sentence of Section 4.01) and any rollover
contributions made to such Participant's Tax Deferred Account on or
after May 1, 1994, reduced by the sum of all prior withdrawals from
such Participant's Tax Deferred Account."
<PAGE> 106
RESOLVED, the effective date of this Amendment is May 1, 1994.
RESOLVED, said Plan, as so amended, is in all other respects hereby
confirmed.
IN WITNESS WHEREOF, the undersigned have executed this Action By
Unanimous Written Consent by affixing their respective signatures hereto, all as
of this 28th day of April, 1994.
/s/ Kevin J. Dunn /s/ Lawrence G. Kirshbaum
----------------------------- -----------------------------
Kevin J. Dunn Lawrence G. Kirshbaum
/s/ John H. Goldsmith /s/ Thomas A. Pasquale
----------------------------- -----------------------------
John H. Goldsmith Thomas A. Pasquale
/s/ Robert H. Yevich
-----------------------------
Robert H. Yevich
- 2 -
<PAGE> 107
TUCKER ANTHONY INCORPORATED
PROFIT SHARING RETIREMENT PLAN
December 1994 Amendment
A. The TUCKER ANTHONY INCORPORATED PROFIT SHARING RETIREMENT PLAN originally
effective January 1, 1955, as subsequently amended, is hereby further amended,
as follows:
1. Section 2.10 is hereby amended, effective January 1, 1994, by adding
the following to the end thereof.
"In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each employee taken into account under the Plan shall
not exceed the OBRA'93 annual compensation limit. The OBRA'93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months,
beginning in such calendar year over which compensation is determined
(determination period). If a determination period consists of fewer
than 12 months, the OBRA'93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA'93 annual Compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA'93 annual Compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA'93 annual compensation limit is
$150,000."
2. Section 6.02(a) is hereby amended, effective January 1, 1994, by
adding the following at the end thereof:
"In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each employee taken into account under the Plan shall
<PAGE> 108
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months,
beginning in such calendar year over which compensation is determined
(determination period). If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual Compensation limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA '93 annual Compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000."
3. Section 7.07(a) is hereby amended, effective January 1, 1989, by
deleting the last sentence thereof in its entirety.
4. Section 7.07(c) is hereby amended, effective January 1, 1993, by
adding the following language at the end thereof:
"Notwithstanding the foregoing, if a distribution is one to which
Sections 401(a)(11) and 417 of the Code do not apply, such
distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
a) the Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and
b) the Participant, after receiving the notice, affirmatively
elects a distribution.
5. Section 7.08(a) is hereby amended, effective January 1, 1989, to
read as follows:
"(a) A Participant's account balances to be distributed upon
retirement,
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<PAGE> 109
disability or severance under Section 7.02, 7.03 or 7.05 shall not be
distributed in whole or in part until the earlier of (i) the date the
Participant attains Normal Retirement Age or (ii) the Participant's
death, unless the Participant consents to such earlier distribution in
writing."
6. Section 13.02 is hereby amended, effective January 1, 1994, by
adding the following to the end thereof:
"In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each employee taken into account under the Plan shall
not exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months,
beginning in such calendar year over which compensation is determined
(determination period). If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under section 401(a)(17) of the Code shall
mean the OBRA '93 annual Compensation limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA '93 annual Compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000."
B. Except as so amended, the Plan in all other respects, is hereby
confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and
on behalf of the Employer by its duly authorized officer this 23rd day of
December, 1994.
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<PAGE> 110
TUCKER ANTHONY INCORPORATED
By /s/ Michael L. Michael
------------------------------
Secretary
4
<PAGE> 111
TUCKER ANTHONY INCORPORATED
PROFIT SHARING RETIREMENT PLAN
November 1995 Amendment
A. The TUCKER ANTHONY INCORPORATED PROFIT SHARING RETIREMENT
PLAN originally effective January 1, 1955, and most recently amended and
restated effective January 1, 1989, is hereby further amended effective January
1, 1995, as follows:
1. Section 5.04 is hereby amended to read as follows:
"5.04 Allocation of Company Contributions. As soon as practicable
after the end of each Plan Year for which a Company Contribution has been
made to the Trust pursuant to Section 4.03, the Company shall deliver to
the Committee a schedule showing the amount of the Company Contribution
for the Plan Year and the name of each Participant who was an Employee of
the Company on the Anniversary Date of such Plan Year, and opposite the
name of each such Participant the amount of Compensation paid to such
Participant by the Company during such Plan Year. The schedule shall also
contain such other information as the Committee may reasonably require for
the proper administration of the Plan. Upon receiving such schedule and
the total contribution, if any, made by the Company for such Plan Year,
and after the account balances of the Participants have been adjusted as
provided in Section 5.06, the Committee shall allocate a portion of the
Company Contribution to the Plan for the Plan Year to the Company Account
of each Participant which bears the same ratio to such portion of the
total Company Contribution as the Participant's Compensation for such Plan
Year bears to the total Compensation of all eligible Participants for such
Plan Year."
B. Except as so amended, the Plan in all other respects, is hereby confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and on
behalf of the Employer by its duly authorized officer this 4th day of
April, 1996.
TUCKER ANTHONY INCORPORATED
By: /s/ John H. Goldsmith
-----------------------------------
John H. Goldsmith
Chairman/Chief Executive Officer
<PAGE> 112
TUCKER ANTHONY INCORPORATED
PROFIT SHARING RETIREMENT PLAN
October 1996 Amendment
A. The TUCKER ANTHONY INCORPORATED PROFIT SHARING RETIREMENT
PLAN originally effective January 1, 1955, and most recently amended and
restated effective January 1, 1989, is hereby further amended effective as of
October 14, 1996, as follows:
1. Section 7.10 is hereby amended in its entirety to read as follows:
"7.10 Loans to Participants. Upon written application of a
Participant submitted to the Company at least thirty (30) days (or such
shorter period as the Committee allows) prior to a Valuation Date, the
Committee may direct the Trustees to lend to such Participant such amount
or amounts from his accounts under the Plan up to fifty percent (50%) of
the total aggregate value of the vested portion of such Participant's
accounts (determined as of such Valuation Date). Notwithstanding the
foregoing, the aggregate amount of all outstanding loans, including
accrued interest, from the Plan to a Participant shall not exceed $50,000,
reduced by the amount of any loan repayment made during the one (1) year
period ending on the day before the date on which such loan is to be made.
The minimum amount which may be loaned to a Participant under this Section
7.10 shall be $1,000. A Participant may not have more than two loans
outstanding under this Section 7.10 at any given time.
Loans shall be made available to all Participants on a reasonably
equivalent basis, except that the Committee may make reasonable
distinctions based upon credit-worthiness, other obligations of the
Participant and other factors that may adversely affect the ability to
assure repayment. The decision as to whether a loan shall or shall not be
made in any case shall rest solely within the discretion of the Committee,
such discretion to be exercised consistently with the provisions of
Section 9.05 and with such procedures as the Committee may establish
pursuant to this Section 7.10. Loans approved under this Section 7.10
shall be made as soon as reasonably practicable after the Valuation Date
next following timely receipt by the Committee of the Participant's
written application.
Each such loan shall be made at such reasonable rate of interest as
the Committee may determine, and shall be subject to such other terms and
conditions as the Committee may deem proper, and shall be evidenced by the
promissory note of the Participant and secured by at least fifty percent
(50%) of the Participant's interest in the Plan. Each such loan shall be
repaid by such means as may be authorized by the Committee, shall be
amortized over the term of the loan in level payments made not less
frequently than quarterly, and shall be repaid within five (5) years
unless such loan is used to acquire a dwelling unit which within a
reasonable period of time is to be used
<PAGE> 113
(determined at the time the loan is made) as the principal residence of
the Participant in which case the repayment period shall not exceed twenty
(20) years.
Each such loan shall be deemed to be an investment made at the
direction of such Participant and shall be credited to a separate
investment account for the borrowing Participant. An amount equal to the
principal amount of such loan when made shall be charged to the interests
of such Participant's accounts under the Plan as designated by the
Participant.
A Participant may specify that a loan under this Section 7.10 is to
be charged to his interest in one or more specific Investment Media in
which his accounts are invested. Unless so specified, the loan amounts
shall be made out of the interest of such account in each Investment
Medium in accordance with the proportion which the interest of such
account in such Investment Medium bears to the total value of such
accounts, subject however to such restrictions as may be applicable to the
particular Investment Media.
All interest and loan repayments shall be credited to the
appropriate accounts of such Participant and shall be invested, pursuant
to such Participant's investment elections under Section 5.08. All
expenses incurred by the Committee and the Trustees, including reasonable
attorneys' fees and court costs, as a result of a default by a Participant
shall be charged against the Participant's accounts.
If any loan under this Section 7.10 is in default, as determined in
accordance with the procedures established by the Committee, when any part
or all of the amount standing to the credit of a Participant's accounts
becomes distributable to such Participant or his Beneficiary, the
Committee shall direct the Trustees to apply the amount of such
distributable amount in payment of the entire outstanding loan principal,
and any interest theretofore accrued, before distributing the balance, if
any, to the Participant or his Beneficiary."
B. Except as so amended, the Plan in all other respects, is hereby confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and on
behalf of the Employer by its duly authorized officer this 14th day of October,
1996.
TUCKER ANTHONY INCORPORATED
By: /s/ Marc Menchel
-----------------------------
2
<PAGE> 114
TUCKER ANTHONY INCORPORATED
PROFIT SHARING RETIREMENT PLAN
March 1998 Amendment
A. The TUCKER ANTHONY INCORPORATED PROFIT SHARING RETIREMENT
PLAN (the "Plan") originally effective January 1, 1955, and most recently
amended and restated effective January 1, 1989, is hereby further amended in its
entirety to read as follows:
1. Section 2.15 is hereby amended by adding the following sentences
immediately following the first sentence thereto:
"In addition, the term "Investment Media" shall include any investment
fund established by the Trustees at the direction of the Committee which
shall be invested primarily in shares of common stock, $.01 per share, of
Freedom Securities Corporation, a Delaware corporation, which stock
constitutes "qualifying employer securities" as defined in section
407(d)(5) of ERISA and "employer securities" as defined in section 409(l)
of the Code ("Freedom Securities Stock"), and short-term interest income
vehicles (the "Freedom Securities Stock Fund"). Consistent with ERISA, the
assets of the Plan may be used to acquire and hold Freedom Securities
Stock in any proportions or amounts."
2. Section 4.02 is hereby amended by adding the following parenthetical
immediately after the term "Matching Contribution" on the second line thereof:
"(in cash or shares of Freedom Securities Stock, in the discretion of the
Company)"
3. Section 4.03 is hereby amended in its entirety to read as follows:
"4.03 Company Contributions. The Company shall contribute as a
Company Contribution (in cash or shares of Freedom Securities Stock, in
the discretion of the Company) to the Plan on account of each Plan Year
such amount, if any, as may be voted by the Board of Directors in its sole
discretion for said Plan Year."
4. Section 5.06 is hereby amended by adding "(a)" at the beginning of the
first paragraph thereto and adding the following subsection (b) to follow such
paragraph:
"(b) Freedom Securities Stock held by the Trust shall be valued
according to the following rules: (1) in the case of Freedom Securities
Stock that is publicly traded
<PAGE> 115
on a national securities exchange, such stock shall be valued by reference
to the closing price of such stock on such exchange on the last trading
day immediately preceding the date such stock is contributed to the Plan
or other relevant date for which the valuation is to be performed and (2)
in the case of Freedom Securities Stock that is not publicly traded on a
national securities exchange, such stock shall be valued as of the date of
contribution or other relevant date by determining the fair market value
of such stock through the use of an independent appraiser."
5. Option A of Section 7.07(a) is hereby amended to read as follows:
"Option A. One lump sum payment (i) in cash, or (ii) in full shares of
Freedom Securities Stock to the extent of such Participant's
accounts interest in the Freedom Securities Stock Fund plus
the cash equal to the value of the remaining balance of such
Participant's accounts."
6. Article X is hereby amended by adding the following Sections 10.13 and
10.14 at the end thereof:
"Section 10.13 Voting of Freedom Securities Stock. Each Participant
or Beneficiary shall have the right and shall be afforded the opportunity
to direct the manner in which the shares of Freedom Securities Stock
representing the interest of such Participant or Beneficiary in the
Freedom Securities Stock Fund shall be voted at all stockholders'
meetings. To facilitate such right the Company shall deliver to each
Participant or Beneficiary a copy of all proxies, notices, and other
information which it distributes to its shareholders generally and the
Committee shall establish such procedures for the collection of
Participants' and Beneficiaries' instructions on the voting of such
Freedom Securities Stock and the timely transmission of such instructions
to the Trustees as it shall determine to be appropriate. Any Freedom
Securities Stock allocable to the interests of Participants and
Beneficiaries in the Freedom Securities Stock Fund for which no signed
voting-direction instrument is timely received from the Participant or
Beneficiary shall not be voted by the Trustees. The Trustees shall take
any and all necessary measures, including, but not limited to, the
retention of an independent outside tabulator, recordkeeper, auditor or
other person, to ensure that the instructions received from Participants
shall be held in strict confidence and shall not be divulged or released
to any person, including employees, officers and directors of the Company
or any Affiliated Company. Participants and Beneficiaries do not acquire
ownership of Freedom Securities Stock held by the Trustees unless and
until the Trustees deliver to them in accordance with Article VII hereof
stock certificates which have been registered in their names on the stock
books of the Company. For purposes of this Section 10.13, to the extent
the Plan does not meet the requirements of Section 404(c) of ERISA, each
Participant and Beneficiary shall be a named fiduciary under the Plan with
respect to his interest in the shares of Freedom Securities Stock held in
the Freedom Securities Stock Fund.
<PAGE> 116
10.14. Tender Offer or Exchange Offer. In the event of a tender
offer or exchange offer by any person (including the Company) for any or
all shares of Freedom Securities Stock held in the Trust, each Participant
or Beneficiary shall have the right and shall be afforded the opportunity
to direct in writing whether the shares of Freedom Securities Stock
(including fractional shares) representing the interest of such
Participant in the Freedom Securities Stock Fund shall be tendered or
exchanged in response to such offer. The Trustees shall act with respect
to such Freedom Securities Stock in accordance with such written
instructions. Any such Freedom Securities Stock with respect to which
written instructions have not been timely received by the Trustees shall
not be tendered or exchanged. To facilitate the foregoing right of the
Participants, the Company shall utilize its best efforts to distribute or
cause to be distributed to each Participant substantially the same
information as may be distributed to the stockholders of the Company in
connection with such offer and the Committee shall establish such
procedures for the collection of Participants' and Beneficiaries'
instructions with respect to such Freedom Securities Stock and the timely
transmission of such instructions to the Trustees as it shall determine to
be appropriate. The Trustees shall take any and all necessary measures,
including, but not limited to, the retention of an independent outside
tabulator, recordkeeper, auditor or other person, to ensure that the
instructions received from Participants and Beneficiaries shall be held in
strict confidence and shall not be divulged or released to any person,
including employees, officers and directors of the Company or any
Affiliated Company. For purposes of this Section 10.14, to the extent the
Plan does not meet the requirements of Section 404(c) of ERISA, each
Participant and Beneficiary shall be a named fiduciary under the Plan with
respect to his interest in the shares of Freedom Securities Stock held in
the Freedom Securities Stock Fund."
B. Except as so amended, the Plan in all other respects, is hereby confirmed.
IN WITNESS WHEREOF, these presents have been signed and sealed for and on
behalf of Tucker Anthony Incorporated by its duly authorized officer this 27th
day of March, 1998.
TUCKER ANTHONY INCORPORATED
By: /s/ Marc Menchal
-----------------------
<PAGE> 1
Exhibit 5.1
April 1, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, DC 20549
Re: Freedom Securities Corporation
Ladies/Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") filed by Freedom Securities Corporation (the "Company"), a Delaware
corporation, with the Securities and Exchange Commission with respect to the
registration of three 401(k) plans (the Freedom Capital Management Corporation
Deferred Savings Plan, the Profit-Sharing Retirement Plan for Employees of Sutro
& Co. Incorporated and the Tucker Anthony Incorporated Profit Sharing Retirement
Plan) (collectively, the "Plans") and an indeterminate number of shares of the
Company's common stock, par value $0.01 per share (the "Shares") to be offered
or sold pursuant to such Plans.
We have made such examination as we have deemed necessary for the purpose of
this opinion. Based upon such examination, it is our opinion, that, when the
Registration Statement has become effective under the Securities Act of 1933,
and when the Shares to be issued are sold and paid for in the manner described
in the Registration Statement, the Shares will have been validly issued, fully
paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
ROSENMAN & COLIN LLP
By: /s/ Howard Schneider
--------------------
A Partner
<PAGE> 1
Exhibit 5.2
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NY 11202
Employer Identification Number:
04-1915080
Date: Jun. 23, 1995 File Folder Number:
043002980
FREEDOM CAPITAL MANAGEMENT Person to Contact:
CORPORATION FRANK PAUSCH
C/O MATTHEW T GIULIANI ESQ Contact Telephone Number:
C/O GOODWIN PROCTER & HOAR (718) 488-2427
EXCHANGE PLACE Plan Name:
BOSTON, MA 02109 FREEDOM CAPITAL MANAGEMENT
CORP DEFERRED SAVINGS PLAN
Plan Number: 002
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated June 9, 1995. The proposed amendments should be
adopted on or before the date prescribed by the regulations under Code section
401(b).
This determination letter is applicable for the amendment(s) adopted on
Nov. 9, 1994.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
This plan satisfies the nondiscriminatory current
<PAGE> 2
2
FREEDOM CAPITAL MANAGEMENT
availability requirements of section 1.401(a)(4)-4(b) of the regulations with
respect to those benefits, rights, and features that are currently available to
all employees in the plan's coverage group. For this purpose, the plan's
coverage group consists of those employees treated as currently benefiting for
purposes of demonstrating that the plan satisfies the minimum coverage
requirements of section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Herbert J. Huff
Herbert J. Huff
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
for Employee Benefit Plans
<PAGE> 1
Exhibit 5.3
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
2 CUPANIA CIRCLE
MONTEREY PARK, CA 91755
Date: Nov. 06, 1996 Employer Identification Number:
94-2624410
File Folder Number:
940062264
SUTRO & CO INCORPORATED Person to Contact:
201 CALIFORNIA STREET MARGARET M. SAITO
SAN FRANCISCO, CA 94111 Contact Telephone Number:
(213) 725-2531
Plan Name:
PROFIT SHARING PLAN FOR
EMPLOYEES OF SUTRO & CO.,
INCORPORATED
Plan Number: 003
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated April 4 & 22, 1996. The proposed amendments
should be adopted on or before the date prescribed by the regulations under
Codes section 401(b).
This determination is also subject to your adoption of the proposed
amendments submitted in your letter(s) dated 5-7-96 & 7- 10-96. These proposed
amendments should also be adopted on or before the date prescribed by the
regulations under Code Section 401(b).
<PAGE> 2
2
SUTRO & CO. INCORPORATED
Your plan does not consider total compensation for purposes of figuring
benefits. In operation, the provision may discriminate in favor of employees who
are highly compensated. If this occurs, your plan will not remain qualified.
This determination letter is applicable for the amendment(s) adopted on
February 29, 1994.
This determination letter is applicable for the plan adopted on April 19,
1990.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount requirement of section
1.401(a)(4)-1(b)(2) of the regulations on the basis of a general test described
in the regulations.
This letter is issued under Rev. Proc. 93-39 and considers the amendments
required by the Tax Reform Act of 1986 except as otherwise specified in this
letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefitting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
<PAGE> 3
3
SUTRO & CO. INCORPORATED
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Steven A. Jensen
Steven A. Jensen
District Director
Enclosure(s):
Publication 794
Addendum
<PAGE> 4
4
SUTRO & CO. INCORPORATED
This plan also satisfies the requirements of Code section 401(k).
This plan does not provide for contributions on behalf of participants with less
than one thousand hours of service during the plan year and/or does not provide
for contributions on behalf of participants not employed on the last day of the
plan year. The provision(s) may, in operation, cause this plan to fail the
coverage requirements of IRC 410(b) and/or the participation requirements of IRC
401(a)(26). If this discrimination occurs, this plan will not remain qualified.
<PAGE> 1
Exhibit 5.4
REVISED LETTER
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NY 11202
Employer Identification Number:
04-2566229
Date: Mar. 18, 1996 File Folder Number:
040001607
TUCKER ANTHONY INCORPORATED Person to Contact:
C/O MATTHEW T GIULIANI ESQ BARBARA SADLON
C/O GOODWIN PROCTER & HOAR Contact Telephone Number:
EXCHANGE PLACE (518) 431-0372
BOSTON, MA 02109 Plan Name:
TUCKER ANTHONY INCORPORATED
PROFIT SHARING RETIREMENT PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your permanent
records.
Continued qualification of the plan under its present form will depend on
its effect in operation. (See section 1.401- 1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan, and provides information on the
reporting requirements for your plan. It also describes some events that
automatically nullify it. It is very important that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or
local statutes.
This determination is subject to your adoption of the proposed amendments
submitted in your letter dated November 10. 1995. The proposed amendments should
be adopted on or before the date prescribed by the regulations under Code
section 401(b).
This determination letter is applicable for the amendment(s) adopted on
12/14/90 & 04/28/94.
This determination letter is also applicable for the amendment(s) adopted
on December 23, 1994.
This plan has been mandatorily disaggregated, permissively aggregated, or
restructured to satisfy the nondiscrimination requirements.
This letter is issued under Rev. Proc. 93-39 and considers
<PAGE> 2
2
TUCKER ANTHONY INCORPORATED
the amendments required by the Tax Reform Act of 1986 except as otherwise
specified in this letter.
This plan satisfies the nondiscriminatory current availability
requirements of section 1.401(a)(4)-4(b) of the regulations with respect to
those benefits, rights, and features that are currently available to all
employees in the plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently benefiting for purposes
of demonstrating that the plan satisfies the minimum coverage requirements of
section 410(b) of the Code.
This letter may not be relied upon with respect to whether
the plan satisfies the qualification requirements as amended by
the Uruguay Round Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated in
the power of attorney.
If you have questions concerning this matter, please contact the person
whose name and telephone number are shown above.
Sincerely yours,
/s/ Herbert J. Huff
Herbert J. Huff
District Director
Enclosures:
Publication 794
Addendum
<PAGE> 3
3
This letter is also applicable to amendments adopted on January 4, 1993.
This letter supersedes our prior letter dated 01/25/96.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 to be filed April 2, 1998 of our report dated March 10, 1998, with respect
to the consolidated financial statements of Freedom Securities Corporation for
the one month period ended December 31, 1996 and the year ended December 31,
1997 and the consolidated financial statements of the Freedom Securities
Holding Corporation for the year ended December 31, 1995 and the eleven months
ended November 29, 1996 included in the Freedom Securities Corporation
Registration Statement on Form S-1 (No. 333-44931) Amendment No. 3.
/s/ ERNST & YOUNG LLP
New York, New York
March 31, 1998
