<PAGE>
As filed with the Securities and Exchange Commission on January 4, 1999.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________________________
CMP Media Inc.
(Exact name of registrant as specified in its charter)
Delaware 11-2240940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
600 Community Drive 11030
Manhasset, New York (Zip Code)
(Address of Principal Executive Offices)
__________________________________
CMP MEDIA INC. PROFIT SHARING & RETIREMENT SAVINGS PLAN
(Full title of plan)
__________________________________
ROBERT D. MARAFIOTI, ESQ.
Vice President, Secretary and General Counsel
CMP Media Inc.
600 Community Drive
Manhasset, New York 11030
(Name and Address of agent for service)
___________________________________
Telephone number of agent for service:
(516) 562-5000
________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
Proposed Proposed
Title of Amount maximum offering maximum Amount of
security being being price per aggregate offering registration
registered registered* share** price fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Common Stock, 1,000,000 $13.125 $13,125,000 $3,648.75
$.01 Par Value
Per Share
================================================================================
</TABLE>
* In addition, pursuant to Rule 416 under the Securities Act of 1933, this
registration statement also covers an indeterminate number of additional shares
which may be offered and issued in accordance with the Plan terms to prevent
dilution from stock splits, stock dividends or similar transactions, as well as
an indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
** The maximum offering price per share is calculated pursuant to Rule 457(c)
and (h) using the average high and low prices of the security as of December 30,
1998 as reported in NASDAQ.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing information specified in the instructions to
Part I of Form S-8 will be sent or given to employees participating in the CMP
Media Inc. Profit Sharing & Retirement Savings Plan (the "Plan") as specified by
Rule 428(b)(1) of the Securities Act of 1933, as amended (the "Securities Act").
Those documents and the documents incorporated by reference into this
Registration Statement pursuant to Item 3 of Part II of this Registration
Statement, taken together, constitute a prospectus that meets the requirements
of Section 10(a) of the Securities Act of 1933, as amended.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
CMP Media Inc. (the "Company") hereby incorporates, or will be deemed
to have incorporated, herein by reference the following documents:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the periods
ending March 31, 1998, June 30, 1998 and September 30, 1998, respectively;
(3) The Company's Current Reports on Form 8-K filed on April 10, 1998,
July 7, 1998, September 4, 1998 and November 12, 1998, and all other reports
filed pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, (the "Exchange Act") since December 31, 1997;
(4) The description of the Company's Class A Common Stock contained in
the Company's most recent Exchange Act registration statement on Form 8-A,
including any amendment thereto or report filed for the purpose of updating such
description;
(5) The Company's Notice of Annual Stockholders Meeting and Proxy
Statement for its annual meeting of stockholders filed on April 23, 1998
pursuant to Section 14 of the Exchange Act; and
(6) All documents filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Officers and Directors
Section 102(b)(7) of the General Corporation Law of the State of
Delaware (the "DGCL"), provides that a corporation (in its original certificate
of incorporation or an amendment thereto) may eliminate or limit the personal
liability of a director (or certain persons who, pursuant to the provisions of
the certificate of incorporation, exercise
<PAGE>
or perform duties conferred or imposed upon directors by the DGCL) to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, provided that such provisions shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or redemptions) or
(iv) for any transaction from which the director derived an improper personal
benefit. Section 7.5 of the Certificate of Incorporation of the Company, as
amended (the "Certificate of Incorporation"), limits the liability of directors
thereof to the extent permitted by Section 102(b)(7)of the DGCL.
Under Section 145 of the DGCL, in general, a corporation may indemnify
its directors, officers, employees or agents against expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding
brought by third parties to which they may be made parties by reason of their
being or having been directors, officers, employees or agents and shall so
indemnify such persons only if they acted in good faith and in a manner they
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 no
reasonable cause to believe their conduct was unlawful. Section 7.4 of the
Certificate of Incorporation gives the Company the power to indemnify its
officers, directors, employees and agents to the full extent permitted by
Delaware law.
In addition, the Plan provides for the indemnification of any officer,
director or employee who is allocated or delegated responsibility for
administering or interpreting the Plan against any loss, liability, claim, cost
or expense incurred by or asserted against such employee, officer or director
as a result of any act or omission to act in connection with the Plan, unless
arising out of such employee's, officer's or director's gross negligence,
willful misconduct or lack of good faith.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C>
*3.3 Restated Certificate of Incorporation of the Company
*3.4 Amended and Restated Bylaws of the Company
*4.1 Reference is made to Exhibits 3.3 and 3.4
*4.2 Specimen Class A Common Stock certificate
*4.3 1997 Stockholders' Agreement
5 Opinion of Dow, Lohnes & Albertson, PLLC
23.1 Consent of PricewaterhouseCoopers
23.2 Consent of Dow, Lohnes & Albertson
(contained in their opinion in Exhibit 5)
99.1 CMP Media Inc. Profit Sharing & Retirement Savings Plan
</TABLE>
* Incorporated by reference to the corresponding exhibit of the Company's
Registration Statement on Form S-1 as amended (File No. 333-26741).
<PAGE>
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) 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 the registration statement or any material change to such
information in the registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act, each such post effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
Annual Report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities 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 Securities and Exchange
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 Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant 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 Manhasset, New York on the 31 day of December, 1998.
CMP MEDIA INC.
By: /s/ Michael S. Leeds
-------------------------
Michael S. Leeds
President, Chief Executive Officer
and a Director
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.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ Michael S. Leeds President, December 31, 1998
- -------------------- Chief Executive Officer
Michael S. Leeds and a Director
(Principal Executive Officer)
/s/ Daniel H. Leeds Executive Vice President, December 31, 1998
- ------------------- President of International
Daniel H. Leeds and a Director
/s/ Kenneth D. Cron Executive Vice President, December 31, 1998
- ------------------- President of Publishing
Kenneth D. Cron and a Director
/s/ Joseph E. Sichler Vice President and December 31, 1998
- --------------------- Chief Financial Officer
Joseph E. Sichler (Principal Financial Officer
and Principal Accounting
Officer)
/s/ Gerard G. Leeds Director, Co-Chairperson December 31, 1998
- ------------------- of Board of Directors
Gerard G. Leeds
/s/ Lilo J. Leeds Director, Co-Chairperson December 31, 1998
- ----------------- of Board of Directors
Lilo J. Leeds
<PAGE>
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Plan
Administrators have duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in Manhasset, New
York on the 31 day of December, 1998.
CMP MEDIA INC. PROFIT SHARING &
RETIREMENT SAVINGS PLAN
By: /s/ Michael S. Leeds
-------------------------
Michael S. Leeds
President, Chief Executive Officer and
a Director of the Company
<PAGE>
EXHIBIT 5
[FIRM LETTERHEAD APPEARS HERE]
January 4, 1999
CMP Media Inc.
600 Community Drive
Manhasset, New York 11030
Re: Registration Statement on Form S-8
Gentlemen:
We have acted as special counsel for CMP Media Inc., a Delaware
corporation ("CMP"), in connection with the preparation of the Registration
Statement on Form S-8 (the "Registration Statement") pertaining to 1,000,000
shares (the "Shares") of Class A Common Stock, $.01 par value per share of CMP,
being issued by CMP pursuant to the CMP Media Inc. Profit Sharing & Retirement
Savings Plan (the "Plan") and an indeterminate number of interests in the Plan
(the "Interests") that may be acquired thereunder.
In preparing this opinion, we have reviewed (a) the Registration
Statement; (b) CMP's Amended and Restated Certificate of Incorporation and
Restated Bylaws; (c) the Plan; and (d) certain records of CMP's corporate
proceedings as reflected in its minute and stock books.
As to matters of fact relevant to our opinion, we have relied upon oral
representations of officers of CMP without further investigation. With respect
to the foregoing documents, we have assumed: (i) the authenticity of all
documents submitted to us as originals, the conformity with authentic original
documents of all documents submitted to us as copies or forms, the genuineness
of all signatures and the legal capacity of natural persons, and (ii) that the
foregoing documents, in the forms thereof submitted for our review, have not
been altered, amended or repealed in any respect material to our opinion as
stated herein. We have not reviewed any documents other than the documents
listed above for purposes of rendering our opinion as expressed herein, and we
assume that there exists no provision of any such other document that bears upon
or is inconsistent with our opinion as expressed herein. We have conducted no
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we assume to be true,
complete and accurate in all material respects.
<PAGE>
Our opinion is limited to matters of law arising under the General
Corporation Law of the State of Delaware, insofar as such law applies, and we
express no opinion as to conflicts of law rules or the laws of any states or
jurisdictions, including federal laws regulating securities, other federal laws
or the rules and regulations of stock exchanges or any other regulatory body,
other than as specified above.
Based upon and subject to the foregoing and any other qualifications
stated herein, we are of the opinion that (i) the Shares, when and to the extent
issued and paid for pursuant to the provisions of the Plan, will be validly
issued, fully paid and non-assessable; and (ii) the Plan confers legally
enforceable Interests to employees participating in the plan to the extent and
upon the terms and conditions described therein, subject to limitations imposed
by bankruptcy, insolvency, reorganization, moratorium or similar laws and
related court decisions of general applicability relating to or affecting
creditors' rights generally.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement, and to all references to our firm in the Registration
Statement, provided, that in giving such consent we do not admit that we come
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities and
Exchange Commission thereunder. Except as provided for hereinabove, without our
prior written consent, this opinion may not be furnished or quoted to, or relied
upon by, any other person or entity for any purpose.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By: /s/ Paul R. Lang
-------------------------
Paul R. Lang
Member of the Firm
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
CMP Media Inc. on Form S-8 of our report dated February 9, 1998, on our audits
of the consolidated financial statements and financial statement schedule of CMP
Media Inc. as of December 31, 1997 and 1996, and for the years ended December
31, 1997, 1996, and 1995 which report is included in the Company's Annual Report
on Form 10-K.
/s/ PricewaterhouseCoopers
----------------------------
PricewaterhouseCoopers
New York, New York
January 4, 1999
<PAGE>
EXHIBIT 99.1
CMP MEDIA, INC.
PROFIT SHARING & RETIREMENT SAVINGS PLAN
WORKING COPY
(INCORPORATING AMENDMENTS 1 - 8)
Effective as of January 1, 1989
Amended and Restated as of
January 1, 1994
<PAGE>
CMP MEDIA, INC.
PROFIT SHARING & RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
Page
Article I
DEFINITIONS..................................................................2
1.1 "Account"................................................................2
1.2 "Administrator"..........................................................2
1.3 "Affiliate"..............................................................2
1.4 "Anniversary Date"............ ..........................................2
1.5 "Annuity Starting Date"..................................................3
1.6 "Beneficiary"............................................................3
1.7 "Code"...................................................................3
1.8 "Compensation"...........................................................3
1.9 "Contributions"................ .........................................4
1.10 "Covered Employee"......................................................4
1.11 "Direct Rollover".......................................................4
1.12 "Distributee"...........................................................5
1.13 "Effective Date"........................................................5
1.14 "Eligible Employee".....................................................5
1.15 "Eligible Retirement Plan"..............................................5
1.16 "Eligible Rollover Distribution". ......................................6
1.17 "Employee"..............................................................6
1.18 "Employer"..............................................................6
1.18A "Employment Commencement Date"... .....................................7
1.19 "ERISA".................................................................7
1.20 "Family Member".........................................................7
1.21 "Forfeiture"............................................................7
1.22 "Former Participant"............... ....................................7
1.23 "401(k) Account"........................................................7
1.24 "401(k) Contribution"...................................................7
1.25 "Highly Compensated Employee"...........................................7
1.26 "Hour of Service".......................................................9
1.27 "Investment Manager"...................................................11
1.28 "Key Employee".........................................................12
1.29 "Matching Account".....................................................13
1.30 "Matching Contribution"................................................13
1.31 "Non-Key Employee".....................................................13
1.32 "Normal Retirement Date"...............................................13
1.33 "1-Year Break in Service"..............................................13
- i -
<PAGE>
1.34 "Participant"..........................................................14
1.36 "Plan".................................................................14
1.37 "Plan Sponsor".........................................................14
1.38 "Plan Year"............................................................14
1.39 "Profit Sharing Account"...............................................15
1.40 "Profit Sharing Contribution"..........................................15
1.41 "Qualified Pre-Retirement Survivor Annuity"............................15
1.42 "Retirement Date"......................................................15
1.43 "Rollover Account".....................................................15
1.44 "Rollover Contribution"................................................15
1.45 "Suspense Account".....................................................15
1.46 "Top Heavy Plan".......................................................15
1.47 "Top Heavy Plan Year"..................................................15
1.48 "Total and Permanent Disability".......................................16
1.49 "Trust"................................................................16
1.50 "Trustee"..............................................................16
1.51 "Trust Fund"...........................................................16
1.52 "Year of Service"......................................................16
Article II
ELIGIBILITY AND PARTICIPATION...............................................17
2.1 General Rules...........................................................17
2.2 Determination and Notice of Eligibility.................................18
2.3 Termination and Reemployment............................................19
Article III
CONTRIBUTIONS AND INVESTMENTS...............................................20
3.1 Employer Contributions..................................................20
3.2 401(k) Contributions....................................................21
3.3 Profit Sharing and Matching Contributions...............................22
3.4 Allocation of Contributions.............................................23
3.5 Rollover Contributions..................................................25
3.6 Plan Investments........................................................26
Article IV
LIMITATIONS ON CONTRIBUTIONS................................................27
4.1 Reduction of 401(k) Contributions.......................................27
4.2 Actual Deferral Percentage Test.........................................29
4.3 Reduction of Matching Contributions.....................................30
4.4 Actual Contribution Percentage Test.....................................31
4.5 Aggregate Limits Test...................................................32
4.6 Maximum Annual Additions................................................34
- ii -
<PAGE>
Article V
VESTING AND FORFEITURES.....................................................36
5.1 Vesting.................................................................36
5.2 Break In Service Rules..................................................37
5.3 Forfeitures.............................................................38
Article VI
BENEFITS....................................................................40
6.1 Distribution of Benefits................................................40
6.2 Form of Distribution....................................................40
6.3 Time of Distributions...................................................42
6.4 Mandatory Cash Out Payment..............................................43
6.5 In-Service Distributions................................................43
6.6 Location of Participant Unknown.........................................46
6.7 Limitations on Benefits and Distributions...............................46
Article VII
DEATH BENEFITS..............................................................46
7.1 Death Before Payment of Benefits........................................46
7.2 Spouse's Death Benefit..................................................47
7.3 Change in Beneficiary...................................................47
7.4 Proof of Death..........................................................47
7.5 Accrued Benefit as of December 31, 1994.................................48
7.6 Mandatory Cash-Out Payment..............................................50
7.7 Distribution for Minor Beneficiary......................................50
7.8 Location of Beneficiary Unknown.........................................50
Article VIII
DIRECT ROLLOVER OF BENEFITS.................................................51
8.1 Right to Direct Rollover................................................51
8.2 Limitations on Direct Rollover..........................................51
8.3 Election of Direct Rollover.............................................51
8.4 Payment of Direct Rollover..............................................52
Article IX
ADMINISTRATION..............................................................53
9.1 Powers and Responsibilities of the Plan Sponsor.........................53
9.2 Assignment and Designation of Administrative Authority..................53
9.3 Powers, Duties and Responsibilities of the Administrator................56
9.4 Records and Reports.....................................................58
9.5 Appointment of Advisors.................................................58
9.6 Information from Employer...............................................58
9.7 Payment of Expenses.....................................................59
- iii -
<PAGE>
9.8 Claims Procedure........................................................59
9.9 Claims Review Procedure.................................................59
Article X
TOP-HEAVY PROVISIONS........................................................61
10.1 In General.............................................................61
10.2 Top-Heavy Determination................................................61
10.3 Top-Heavy Contingent Provisions........................................62
Article XI
PLAN LOANS..................................................................64
11.1 Loans to Participants..................................................64
11.2 Limitations............................................................65
11.3 Approval of Loans......................................................65
11.4 Interest Rate..........................................................66
11.5 Repayment..............................................................66
11.6 Default................................................................67
11.7 Other Rules............................................................67
Article XII
AMENDMENT, TERMINATION, AND MERGERS.........................................67
12.1 Amendment..............................................................67
12.2 Termination............................................................68
12.3 Merger or Consolidation................................................68
Article XIII
MISCELLANEOUS...............................................................69
13.1 Valuation..............................................................69
13.2 Participant's Rights...................................................70
13.3 Alienation.............................................................70
13.4 Construction...........................................................71
13.5 Gender and Number......................................................71
13.6 Legal Action and Indemnification.......................................72
13.7 Prohibition Against Diversion of Funds.................................73
13.8 Bonding................................................................73
13.9 Receipt and Release for Payments.......................................74
13.10 Action by the Employer................................................74
13.11 Named Fiduciaries and Allocation of Responsibility....................75
13.12 Headings..............................................................76
13.13 Approval by Internal Revenue Service..................................76
13.14 Uniformity............................................................76
- iv -
<PAGE>
CMP MEDIA, INC.
PROFIT SHARING & RETIREMENT SAVINGS PLAN
INTRODUCTION
The CMP Media, Inc. Profit Sharing & Retirement Savings Plan
(the "Plan") is designed to provide Covered Employees, their spouses and
beneficiaries with benefits in the event of the Covered Employee's retirement,
death or disability. Capitalized terms have the definitions hereinafter set
forth in Article I. This Plan was formerly known as the CMP Publications, Inc.
Profit Sharing Plan & Trust. The CMP Publications, Inc. Profit Sharing Plan &
Trust was itself formerly called the CMP Publications, Inc. Profit Sharing Plan
and was originally effective as of October 1, 1977.
This Plan constitutes a complete amendment and restatement of
the Plan as it existed just prior to the Effective Date. This Plan also
constitutes a complete amendment and restatement of the Healthweek Publications
Profit Sharing Plan and Trust, which plan together with this Plan have always
been a single plan. This amendment and restatement has been prepared to reflect
the applicable requirements under the Code for a profit-sharing plan including a
qualified cash or deferred arrangement under Code Section 401(k) as of the
Effective Date as well as subsequent changes in statutory requirements and in
the benefits provided under the Plan. Except as expressly provided herein, the
terms of the Plan are effective as of the Effective Date.
This Plan establishes the benefits, rights and obligations of
all Covered Employees in the service of the Employer on or after the Effective
Date and of all persons claiming through, under or against any Covered Employee.
- 1 -
<PAGE>
Article I
DEFINITIONS
1.1 "Account" means, with respect to each Participant, the
account maintained on behalf of such Participant which contains the 401(k)
Contributions, Matching Contributions, Profit Sharing Contributions and Rollover
Contributions credited to each Participant. Notwithstanding the foregoing, the
401(k) Contributions, Matching Contributions, Profit Sharing Contributions and
Rollover Contributions of each Participant shall be held in separate subaccounts
within the Account of the Participant, designated as the "401(k) Account," the
"Matching Account," the "Profit Sharing Account" and the "Rollover Account"
respectively.
1.2 "Administrator" means the Administrative Committee
appointed by the Plan Sponsor in accordance with Section 9.2.
1.3 "Affiliate" means, for any Plan Year, a corporation which
for any part of such year is (a) a member of a controlled group of corporations
(as defined in Section 1563(a) of the Code, disregarding Sections 1563(a)(4) and
1563(e)(3)(c)) of which the Plan Sponsor is a member, (b) any trade or business,
whether incorporated or not, which for any part of such year is considered to be
under common control with the Plan Sponsor under regulations prescribed by the
Secretary of the Treasury pursuant to Section 414(c) of the Code, and (c) any
organization which for any part of such year is considered under regulations
prescribed by the Secretary of the Treasury pursuant to Section 414(m) of the
Code to be a member of an affiliated service group of which the Plan Sponsor is
a member.
1.4 "Anniversary Date" means January 1st.
- 2 -
<PAGE>
1.5 "Annuity Starting Date" means the first day of the first
period for which an amount is payable as an annuity or other form of benefit.
1.6 "Beneficiary" means the person to whom a share of a
deceased Participant's or Former Participant's Account is payable.
1.7 "Code" means the Internal Revenue Code of 1986, as amended.
1.8 "Compensation" with respect to any Participant means the total
compensation paid by the Employer for a Plan Year, including those amounts which
are contributed by a Participant on a pre-tax basis to the Plan or to the CMP
Media, Inc. Flexible Spending Plan but not including (a) reimbursement for
educational expenses of the Participant, (b) any imputed income relating to
dependent care or life insurance benefits provided by the Employer; (c)
reimbursement for relocation expenses, (d) any disability payments made by a
third-party, (e) car allowances, and (f) any compensation received as a result
of participation in CMP Media Inc. Employee Stock Purchase Plan, CMP Media Inc.
Stock Incentive Plan, or any other compensation paid in the form of Employer
stock or security. Compensation shall not include any amounts paid to an
employee during any period when he or she was not eligible to participate in the
Plan. Effective January 1, 1989, Compensation in excess of $200,000 (as adjusted
for increases in the cost of living) shall be disregarded. Notwithstanding the
foregoing, effective for Plan Years beginning on and after January 1, 1994,
Compensation in excess of $150,000 (as adjusted for increases in the cost of
living) shall be disregarded.
In determining the Compensation of a Participant, the family
aggregation rules of Section 414(q)(6) of the Code shall apply except that
Family Members shall include only the spouse of the Employee and any lineal
descendants of the Employee who have not attained age 19. In the event the
- 3 -
<PAGE>
family aggregation rules apply to a Participant, the applicable
Compensation limit shall be allocated to each Family Member
aggregated herein in proportion to each such Family Member's Compensation.
1.9 "Contributions" means the 401(k) Contributions, Matching
Contributions, Profit Sharing Contributions and Rollover Contributions credited
to a Participant's Account as described in Article III.
1.10 "Covered Employee" means any Employee of the Employer
except any Employee (a) who is included in a collective bargaining unit unless
participation in the Plan by any such Employee was agreed to in the process of
good faith negotiations between the Employer and the collective bargaining
unit's representative; (b) who is employed by an Affiliate that is not a
Participating Employer; (c) who is a leased employee as defined in Section
414(n)(2) of the Code; (d) who is a nonresident alien and who receives no earned
income (within the meaning of Section 911(d)(2) of the Code) from the Employer
which constitutes income from services within the United States (within the
meaning of Section 861(a)(3) of the Code); or (e) who is a resident alien or a
nonresident and who does not make contributions under the Federal Insurance
Contributions Act. Notwithstanding the foregoing, the term Covered Employee
shall not include any individual who is classified for payroll purposes as an
independent contractor even if such individual is later determined to be a
common law employee of the Employer.
1.11 "Direct Rollover" means the distribution of the vested
balance of a Participant's or Former Participant's Account in accordance with
Article VIII.
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<PAGE>
1.12 "Distributee" means a Participant, a Former Participant,
a Beneficiary or an alternate payee under a qualified domestic relations order
entitled to a distribution under the Plan.
1.13 "Effective Date" means the general effective date of this
amended and restated Plan, which is January 1, 1989.
1.14 "Eligible Employee" means any Covered Employee who has
satisfied the provisions of Section 2.1.
1.15 "Eligible Retirement Plan" means:
(a) If the Distributee is not the surviving spouse of a Participant or
of a Former Participant, any of the following:
(i) an individual retirement account described in Section 408(a)
of the Code;
(ii) an individual retirement annuity described in Section
408(a) of the Code;
(iii) an annuity plan described in Section 403(a) of the Code;
or
(iv) a qualified plan described in Section 401(a) of the Code.
(b) If the Distributee is the surviving spouse of a Participant or
of a Former Participant, any of the following:
(i) an individual retirement account described in Section 408(a)
of the Code; or
(ii) an individual retirement annuity described in Section
408(b) of the Code.
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1.16 "Eligible Rollover Distribution" means any distribution of all or a
portion of the balance of a Participant's Account, except that such term shall
not include:
(a) any distribution that is one of a series of substantially equal
periodic payments made (not less frequently than annually) for either:
(i) the life (or life expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the Distributee's
Beneficiary, or
(ii) a specified period of ten years or more;
(b) any distribution to the extent such distribution is required
under Section 401(a)(9) of the Code;
(c) any distribution or portion of a distribution that is not
includible in the gross income of the Distributee;
(d) returns of Contributions that are returned as a result of the
limitations contained in Section 415 of the Code;
(e) corrective distributions of 401(k) Contributions and the income
allocable thereto and corrective distributions of Matching Contributions and the
income allocable thereto in accordance with Article IV of the Plan; and
(f) any other type of distribution or similar item designated by the
Internal Revenue Service as exempt from the definition of Eligible Rollover
Distribution.
1.17 "Employee" means any person who is a common law employee of the
Employer.
1.18 "Employer" means CMP Media, Inc., a corporation, with
principal offices in the State of New York and each Affiliate.
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1.18A "Employment Commencement Date" means the first date that
an Employee performs an Hour of Service for the Employer.
1.19 "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
1.20 "Family Member" means the spouse, lineal ascendants and
descendants of the Employee and the spouses of such lineal ascendants and
descendants.
1.21 "Forfeiture" means the nonvested portion of a
Participant's Account that is forfeited in accordance with Section 5.3.
1.22 "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.23 "401(k) Account" means that portion of a Participant's
Account credited with his 401(k) Contributions and the earnings and losses
thereon.
1.24 "401(k) Contribution" or "Employer's 401(k) Contribution"
means the Employer's contributions to the Plan that are made pursuant to the
Participant's salary reduction election provided in Section 3.2.
1.25 "Highly Compensated Employee" means any Employee who
performs service for the Employer during the determination year (as hereinafter
defined) and who, during the look-back year (as hereinafter defined):
(a) was a five percent owner as defined in Section 1.28(c);
(b) received Compensation from the Employer in excess of $75,000
(as adjusted by the Secretary of Treasury for cost of living increases);
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(c) received Compensation from the Employer in excess of $50,000 (as
adjusted by the Secretary of Treasury for cost of living increases) and was a
member of the top-paid group for such year (i.e., the top 20 percent of
Employees ranked on the basis of Compensation received during such year); or
(d) was an officer of the Employer and received Compensation during
such year that is greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. If no officer of the Employer has
satisfied the foregoing Compensation requirement during the determination year
or the look-back year, the highest paid officer for such year shall be treated
as a Highly Compensated Employee. The number of officers to be included as
Highly Compensated Employees shall not exceed 50 or, if lesser, the greater of 3
Employees or 10 percent of Employees.
The term Highly Compensated Employee also includes:
(e) Employees described in subsections (b), (c) or (d) above if
the determination year is substituted for the look-back year and the Employee
is one of the 100 Employees who received the most Compensation from the
Employer during the determination year; and
(f) Employees who are five percent owners (as defined in Section
1.28(c)) at any time during either the determination year or the look-back year.
For purposes of this Section 1.25, the determination year shall be the Plan
Year and the look-back year shall be the twelve-month period immediately
preceding the determination year.
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If an Employee is, during a determination year or a look-back year, a
Family Member of either a five percent owner who is an active or former Employee
or a Highly Compensated Employee who is one of the ten most Highly Compensated
Employees ranked on the basis of Compensation paid by the Employer during such
year, then the Family Member and the five percent owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the Family Member and
five percent owner or top-ten Highly Compensated Employee shall be treated as a
single Employee receiving Compensation and Contributions equal to the sum of
such Compensation and Contributions of the Family Member and five percent owner
or top-ten Highly Compensated Employee.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of Employees in the
top-paid group, 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.
1.26 "Hour of Service" means:
(a) Each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer for the performance of
duties during the applicable computation period. Each such Hour of Service shall
be credited to the computation period in which the duties were actually
performed.
(b) Each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer (irrespective of whether
the employment relationship has terminated) for reasons other than performance
of duties (such as vacation, holidays, sickness, jury duty, disability,
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lay-off, military duty or leave of absence) during the applicable computation
period.
(c) Each hour for which back pay is awarded or agreed to by the
Employer without regard to mitigation of damages. Each such Hour of Service
shall be credited to the computation period to which the agreement or award with
respect to back pay pertains rather than to the computation period in which the
award, agreement or payment is made.
(d) To the extent required under The Family and
Medical Leave Act of 1993, each hour that an Employee is absent from
service for a family or medical leave of absence.
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee; and (iv) Hours
of Service are not required to be credited during any period in which no duties
are performed if such hours would exceed the number of hours regularly scheduled
for the performance of duties during such period.
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<PAGE>
For purposes of this Section 1.26, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others, a trust
fund or insurer to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer,
or other entity are for the benefit of particular Employees or are on
behalf of a group of Employees in the aggregate.
For purposes of this Section 1.26, Hours of Service shall be
determined based on records of hours of service maintained by the Employer
provided that such records accurately reflect the number of hours with which
an Employee is entitled to be credited. For those Employees with respect to
which the records maintained by the Employer would not accurately reflect the
number of hours for which an Employee is required to receive credit, such
Employee shall be credited with Hours of Service on the basis of months of
employment--190 Hours of Service shall be credited for each month for which the
Employee would be required to be credited with at least one Hour of Service.
Notwithstanding anything to the contrary contained herein, Hours of
Service shall be credited in accordance with Department of Labor regulations
Section 2530.200b-2 and such provisions are incorporated herein by reference.
1.27 "Investment Manager" means any person, firm or
corporation who is a registered investment adviser under the Investment Advisers
Act of 1940, a bank or an insurance company, (a) who has the power to manage,
acquire, or dispose of Plan assets, and (b) who acknowledges in writing his
fiduciary responsibility to the Plan.
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1.28 "Key Employee" means those Employees defined in Code
Section 416(i) and the Treasury regulations thereunder. Generally, they shall
include any Employee or former Employee (and his Beneficiaries), who at any time
during the Plan Year or any of the preceding four (4) Plan Years, is:
(a) an officer of the Employer having annual Compensation greater than
50 percent of the amount in effect under Code Section 415(b)(1)(A) for any
such Plan Year;
(b) one of the ten Employees having Compensation from the Employer
for a Plan Year greater than the dollar limitation in effect under Code Section
415(c)(1)(A) for the calendar year in which such Plan Year ends and owning (or
considered as owning within the meaning of Code Section 318) both more than
one-half percent interest and the largest interests in the Employer;
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the meaning of Code
Section 318) more than five percent (5%) of the outstanding stock of the
Employer or stock possessing more than five percent (5%) of the total combined
voting power of all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than five percent (5%) of the capital or
profits interest in the Employer. In determining percentage ownership hereunder,
each Affiliate shall be treated as a separate employer; or
(d) a "one percent owner" of the Employer having an annual
Compensation from the Employer of more than $150,000. "One percent owner" means
any person who owns (or is considered as owning within the meaning of Code
Section 318) more than one percent (1%) of the outstanding stock of the Employer
or stock possessing more than
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one percent (1%) of the total combined voting power of all stock of the Employer
or, in the case of an incorporated business, any person who owns more than one
percent (1%) of the capital or profits interest in the Employer. In determining
percentage ownership hereunder, each Affiliate shall be treated as a separate
employer.
1.29 "Matching Account" means that portion of a Participant's
Account credited with Matching Contributions and earnings and losses thereon.
1.30 "Matching Contribution" or "Employer's Matching
Contribution" means the contribution made by the Employer to the Plan in
accordance with Section 3.1(b), on behalf of any Participant who has in effect a
salary reduction election pursuant to Section 3.2 and who otherwise satisfies
the requirements of Article III.
1.31 "Non-Key Employee" means any Employee or former Employee who is not
a Key Employee.
1.32 "Normal Retirement Date" means the first day of the month
coinciding with or next following the date the Participant attains age 65 or, if
later, the date upon which the Participant completes five (5) years of
participation in the Plan.
1.33 "1-Year Break in Service" means a Plan Year during which
an Employee has not completed more than 500 Hours of Service with the Employer.
An Employee shall not incur a 1-Year Break in Service for a Plan Year in which
he becomes a Participant, dies, retires or suffers Total and Permanent
Disability. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"maternity or paternity leaves of absence."
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<PAGE>
For purposes of this Section, "maternity or paternity leave of
absence" shall mean an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the computation period immediately following.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.34 "Participant" shall mean any Eligible Employee who
commences participation in the Plan as provided in Article II, and has not for
any reason ceased participation in the Plan.
1.35 "Participating Employer" means the Plan Sponsor and each
Affiliate that has adopted and is participating in the Plan as listed in
Appendix A.
1.36 "Plan" means the CMP Media, Inc. Profit Sharing &
Retirement Savings Plan as set forth in this document and as hereafter amended.
1.37 "Plan Sponsor" means CMP Media, Inc.
1.38 "Plan Year" means the Plan's accounting year of twelve
(12) months commencing on January 1st and ending on the following December 31st.
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1.39 "Profit Sharing Account" means that portion of a
Participant's Account credited with Profit Sharing Contributions and earning and
losses thereon.
1.40 "Profit Sharing Contribution" or "Employer's Profit
Sharing Contribution" means the Employer's contributions to the Plan made to the
Trust on behalf of a Participant pursuant to Section 3.3.
1.41 "Qualified Pre-Retirement Survivor Annuity" means an
annuity for the life of the Participant's spouse, the payments under which must
be equal to the amount of benefit which can be purchased with the Account of the
Participant used to provide the death benefit under the Plan.
1.42 "Retirement Date" means the date as of which a
Participant actually retires for reasons other than Total and Permanent
Disability, whether such retirement occurs on or after the Participant's Normal
Retirement Date.
1.43 "Rollover Account" means that portion of a Participant's
Account credited with Rollover Contributions and earnings or losses thereon.
1.44 "Rollover Contribution" means an Employee's contribution
to the Trust pursuant to Section 3.5.
1.45 "Suspense Account" means the account maintained under the
Trust which is credited with any unallocated forfeitures as described in Section
5.3.
1.46 "Top Heavy Plan" means a plan described in Section 10.2.
1.47 "Top Heavy Plan Year" means a Plan Year for which the Plan is a Top
Heavy Plan.
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1.48 "Total and Permanent Disability" means a physical or
mental condition of a Participant resulting from bodily injury, disease, or
mental disorder which renders him incapable of continuing his usual and
customary employment with the Employer. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator. The
determination shall be applied uniformly to all Participants.
1.49 "Trust" means the legal entity created pursuant to the
CMP Media, Inc. Profit Sharing & Retirement Savings Plan Trust, as established
by the Employer and the Trustee under which the Trustee shall receive the
Contributions made under the Plan and shall hold, invest, and disburse the Trust
Fund to or for the benefit of the Participants and their Beneficiaries under the
Plan.
1.50 "Trustee" means J. & W. Seligman Trust Company and any
successors. Effective August 1, 1995, "Trustee" means Chemical Bank and any
successors. Effective July 1, 1996, "Trustee" means T. Rowe Price and any
successors.
1.51 "Trust Fund" means the assets of the Plan and the Trust
as the same shall exist from time to time.
1.52 "Year of Service" means a Plan Year during which an
Employee is credited with at least 1,000 Hours of Service; provided, however,
the 1,000 hour requirement set forth above shall be disregarded for the
Employee's eligibility computation period. Years of Service with the Employer or
an Affiliate shall be recognized as Years of Service with the Employer.
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Article II
ELIGIBILITY AND PARTICIPATION
2.1 General Rules.
(a) Any Covered Employee who was a Participant in the Plan prior to
the Effective Date and who remains a Covered Employee as of the Effective Date
shall continue to participate in the Plan.
(b) Each Covered Employee shall become a Participant effective as of
the first day of the Plan Year following the date on which such Covered Employee
attains age twenty and one-half (20 1/2).
(c) Each Participant shall be eligible to make a salary reduction
election (as described in Section 3.2) as of the January 1 or July 1
following: such Participant's completion of six months of service. For
purposes of the foregoing eligibility requirement, a Participant will be
deemed to have completed six months of service if such Participant remains an
Employee on the date which is six months following his or her Employment
Commencement Date. If a Participant does not complete six months of service in
accordance with the preceding rule, such Participant shall be eligible to make
a salary reduction election upon the earlier of the completion of 1,000
Hours of Service during the twelve-month period beginning on the Participant's
Employment Commencement Date or the completion of 1,000 Hours of Service in
any Plan Year beginning after the Participant's Employment Commencement Date.
(d) Notwithstanding the foregoing subsection 2.1(c), effective as of
January 1, 1995, each Covered Employee shall be eligible to make a salary
reduction election (as described in Section 3.2) as of the first day of the
calendar quarter (January 1, April 1, July 1, or October 1) following such
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Covered Employee's (i) attainment of age 20 1/2 and (ii) completion of three
months of service. For purposes of the foregoing eligibility requirement,
a Covered Employee will be deemed to have completed three months of service if
such Covered Employee remains an Employee on the date which is three months
following his or her Employment Commencement Date. If a Covered Employee does
not complete three months of service in accordance with the foregoing rule,
such Covered Employee shall be eligible to make a salary reduction election
upon the earlier of the completion of 1,000 Hours of Service during the
twelve-month period beginning on the Covered Employee's Employment
Commencement Date or the completion of 1,000 Hours of Service in any Plan Year
beginning after the Covered Employee's Employment Commencement Date. A Covered
Employee who satisfies the eligibility criteria of this Section 2.1(d) shall be
considered a Participant for all purposes under the Plan; provided, however,
such a Covered Employee shall not be eligible to receive an allocation of any
Profit Sharing Contribution, Matching Contribution or Forfeiture as otherwise
provided in accordance with Article III and V until such time as the Covered
Employee satisfies the eligibility requirements of Section 2.1(b).
2.2 Determination and Notice of Eligibility.
(a) The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Participating Employer. Such determination shall be conclusive and binding upon
all persons, as long as the same is made in accordance with this Plan and ERISA.
(b) The Administrator shall notify each Covered Employee of his
eligibility to participate in the Plan prior to the date such Covered Employee
first satisfies the eligibility requirements of Section 2.1(b). The
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Administrator shall notify each Participant of his eligibility to make a salary
reduction election prior to the date such Participant first satisfies the
eligibility requirements of Section 2.1(c) or 2.1(d).
2.3 Termination and Reemployment.
(a) A Participant who ceases to be a Covered Employee by reason of
termination of employment or otherwise shall immediately cease participation in
the Plan and shall be a Former Participant. A Former Participant who again
becomes an Employee shall commence participation in accordance with the
following rules:
(i) Except as otherwise provided in this Section, any Former
Participant who again becomes a Covered Employee shall commence participation as
of the date such Former Participant again becomes a Covered Employee;
(ii) Any nonvested Former Participant or any Former Participant
who receives a distribution of the vested balance of his Account who again
becomes a Covered Employee after incurring five consecutive 1-Year Breaks in
Service shall commence participation in the Plan as a newly hired employee in
accordance with Section 2.1.
(b) Any Covered Employee who has satisfied the eligibility
requirements of Section 2.1 but who terminates employment before becoming a
Participant in the Plan and who again becomes a Covered Employee prior to
incurring a 1-Year Break in Service shall become a Participant as of the date
such Employee again becomes a Covered Employee. If such Employee again becomes a
Covered Employee after incurring a 1-Year Break in Service, such Employee shall
commence participation in the Plan in accordance with Section 2.1.
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Article III
CONTRIBUTIONS AND INVESTMENTS
3.1 Employer Contributions.
For each Plan Year commencing on or after the Effective Date, the
Employer shall contribute to the Plan the aggregate of the following amounts:
(a) An amount equal to the total salary reduction elections of all
Participants made pursuant to Section 3.2, which amount shall be deemed the
Employer's 401(k) Contribution;
(b) An Employer Matching Contribution determined as follows:
(i) For Plan Years beginning on or after the Effective Date but
before January 1, 1993, an amount equal to 25% of the 401(k) Contribution, which
amount shall be deemed the Employer's Matching Contribution; provided, however,
in calculating the Matching Contribution, only the portion of the salary
reduction election of each Participant not in excess of $400 of such
Participant's Compensation shall be considered;
(ii) For Plan Years beginning on or after January 1, 1993 but
before January 1, 1995, an amount equal to 25% of the 401(k) Contribution, which
amount shall be deemed the Employer's Matching Contribution; provided, however,
in calculating the Matching Contribution, only the portion of the salary
reduction election of each Participant not in excess of 6% of such Participant's
Compensation shall be considered;
(iii) For Plan Years beginning on or after
January 1, 1995, an amount equal to 25% of the 401(k) Contribution attributable
to the salary reduction elections of those Participants who have satisfied
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the eligibility requirements of Section 2.1(a) or (b), which amount shall
be deemed the Employer's Matching Contribution; provided, however, in
calculating the Matching Contribution, only the portion of the salary reduction
election of each such Participant not in excess of 6% of such Participant's
Compensation shall be considered; and
(iv) For Plan Years beginning on or after January 1, 1997, an
amount equal to 50% of the 401(k) Contribution attributable to the salary
reduction elections of those Participants who have satisfied the eligibility
requirements of Section 2.1(a) or (b) which amount shall be deemed the
Employer's Matching Contribution; provided, however, in calculating the Matching
Contribution, only the portion of the salary reduction election of each such
Participant not in excess of 6% of such Participant's Compensation shall be
considered.
(c) An amount determined each year by the Employer in its sole
discretion, subject to the provisions of Section 3.3, which amount shall be
deemed the Employer's Profit-Sharing Contribution.
(d) Notwithstanding the above, however, the Employer's Contributions
under this Section 3.1 for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code Section
404. All Contributions by the Employer shall be made in cash or in such property
as is acceptable to the Trustee.
3.2 401(k) Contributions.
Each Participant may elect to reduce his Compensation by making a
salary reduction election and filing such election with the Administrator. In
no event shall the amount of such Participant's reduction exceed the lesser of
fifteen percent(15%)of such Participant's Compensation or the limit provided in
Section 402(g) of the Code, as adjusted for increases in the cost of living.
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The Administrator may establish any additional limitation on the amount of any
Highly Compensated Employee's salary reduction as deemed necessary in its
sole discretion and shall communicate such limitation to such Highly
Compensated Employee(s). The amount by which the Participant's Compensation is
reduced shall be allocated to that Participant's 401(k) Account from the
Employer's 401(k) Contribution. The Employer and the Administrator shall adopt
a procedure necessary to implement the salary reduction elections provided for
herein.
3.3 Profit Sharing and Matching Contributions.
(a) Profit Sharing Contribution - The Employer, in its sole
discretion, shall determine the amount of any Profit Sharing Contribution to
be made to the Plan. Effective for Plan Years beginning on an after
January 1, 1993, the Employer's Profit Sharing Contribution shall be at
least equal to an amount sufficient to provide each Participant who has
satisfied the eligibility requirements of Section 2.1(a) or (b) with an
allocation of at least $600 as described in Section 3.4. Effective for plan
Years beginning on or after January 1, 1997, the Employer's Profit Sharing
Contribution shall be at least equal to an amount sufficient to provide
each participant who has satisfied the eligibility requirements of Section
2.1(a) or (b) with an allocation of at least $1,000 as described in Section
3.4. The Employer's determination of such Profit Sharing Contribution shall be
binding on all Participants, the Employer, and the Trustee. The Trustee shall
have no right or duty to inquire into the amount of the Employer's Profit
Sharing Contribution or the method used in determining the amount of the
Employer's Profit Sharing Contribution, but shall be accountable only for funds
actually received by the Trustee.
(b) Matching Contribution - The Employer shall make Matching
Contributions as determined in accordance with Section 3.1(b).
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(c) Active Employment Requirement:
(i) Except as provided in this Section, any Participant who is
not actively employed on the last business day of the Plan Year for any reason
(including by reason of death, disability or retirement) shall not share in the
allocations of the Employer's Profit Sharing Contributions, Matching
Contributions or Forfeitures.
(ii) Notwithstanding the foregoing, for purposes of this Section
3.3(c), Participants on short-term disability leave on December 31st of any Plan
Year shall be treated as actively employed on the last business day of that Plan
Year and shall be entitled to such Employer Contributions as otherwise provided
under the Plan.
(iii) Effective for leave commencing on or after August 5, 1993,
for purposes of this Section 3.3(c), a Participant on leave which would qualify
under the Family and Medical Leave Act shall be treated as actively employed on
the last business day of the Plan Year and shall be entitled to such Employer
Contributions as otherwise provided under the Plan; provided that the
Participant returns to active employment for 30 days following such leave; and
provided further, that the Participant is a Covered Employee on the last day of
such 30-day period.
3.4 Allocation of Contributions.
(a) The Administrator shall allocate the Employer's Profit Sharing
Contribution as follows:
(i) Effective for Plan Years beginning on and after the Effective
Date, with respect to the Employer's Profit Sharing Contribution made pursuant
to Section 3.3, to each Participant's Profit Sharing Account in the same
proportion that each such Participant's Compensation for the Plan Year
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bears to the total Compensation of all Participants for such Plan Year.
(ii) Effective for Plan Years beginning on and after January 1,
1993, with respect to the Employer's Profit Sharing Contribution made pursuant
to Section 3.3, to each Participant's Profit Sharing Account: (1) an amount
equal to $600; and (2) a proportionate share of the remaining Employer Profit
Sharing Contribution determined as the same proportion that each such
Participant's allocation points for the Plan Year bears to the total allocation
points of all Participants for such Plan Year. Each Participant entitled to an
allocation for a Plan Year shall be credited with one allocation point for each
dollar of Compensation for that Plan Year plus an additional 25% of such
Participant's allocation points for each Plan Year in which the Participant is
or has been credited with an allocation of a portion of the Employer's Profit
Sharing Contribution.
(b) Notwithstanding anything in this Plan to the contrary, the
Employer's Profit Sharing Contribution shall be allocated only to those
Participants who (i) have satisfied the eligibility criteria of Section 2.1(a)
or (b); and (ii) have completed a Year of Service during the Plan Year for which
the Employer's Profit Sharing Contribution is made.
(c) Each Participant's 401(k) Account and Matching Account shall be
allocated 401(k) Contributions and Matching Contributions determined in
accordance with Section 3.1 based on the salary reduction election of the
Participant in effect for such Plan Year and subject to the limitations
described in Article IV to meet the requirements of the Internal Revenue Code.
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3.5 Rollover Contributions.
(a) With the consent of the Administrator, a Covered Employee may
make a Rollover Contribution to the Plan provided that such Rollover
Contribution will not jeopardize the tax exempt status of the Plan or Trust or
create adverse tax consequences for the Employer or Participants. The amounts
transferred shall be credited to the Covered Employee's Rollover Account.
Notwithstanding anything in this Plan to the contrary, a Covered Employee who
makes a Rollover Contribution shall be treated as a Participant with respect to
all amounts credited to the Covered Employee's Rollover Account; provided,
however, that such a Covered Employee shall not be eligible to make any salary
reduction contribution or to receive an allocation of any Profit Sharing
Contribution or Matching Contribution until such time as the Covered Employee
satisfies the applicable eligibility requirements of Section 2.1.
(b) For purposes of this Section, except as otherwise provided herein,
a Rollover Contribution may be made from any tax-qualified plan or conduit
individual retirement account provided that such Rollover Contribution is
eligible for tax-free rollover to the Plan in accordance with Code Section 402.
Prior to accepting any Rollover Contributions to which this Section applies, the
Administrator may require the Employee to establish that the amounts to be
transferred to this Plan meet the requirements of this Section and may also
require the Employee to provide an opinion of counsel satisfactory to the
Employer that the amounts to be transferred meet the requirements of this
Section.
(c) Notwithstanding anything herein to the contrary, after January 1,
1985, this Plan shall not accept any direct or indirect transfers, other than
Rollover Contributions, from a defined benefit plan, money purchase plan
(including a target benefit plan), stock bonus or profit sharing plan which
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would otherwise have provided for a life annuity form of payment to the
Participant.
3.6 Plan Investments.
(a) Each Participant or Former Participant may elect to have his
Account invested by the Trustee in investments authorized under the Trust
Agreement, as directed by the Participant pursuant to procedures established by
the Administrator, which investments shall be credited to the Participant's
Account.
(b) All dividends, capital gains distributions, and other earnings
received on any investment credited to a Participant's or Former
Participant's Account under the Plan shall be reinvested in such investment and
credited to the Participant's or Former Participant's Account. Any losses
attributable to any investment credited to a Participant's or Former
Participant's Account under the Plan shall be allocated to such Participant's
or Former Participant's Account.
(c) The Trustee shall invest all Accounts that are allocated to a
Participant or Former Participant under the Plan in one or more investments
authorized under the Trust as directed by the Participant or Former Participant.
Any such investment directions by a Participant or Former Participant shall be
made in accordance with rules and procedures prescribed by the Administrator. To
the extent any Participant or Former Participant fails to provide the
Administrator with directions in accordance with such rules and procedures, the
Administrator shall be responsible for directing the investment of such Account.
If the Trustee receives any Contribution to the Trust that is not subject to
instructions directing its investment, the Trustee under the Trust Agreement
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may hold or return all or a portion of the Contribution pending receipt of
proper investment directions from the Administrator.
(d) Amounts credited to the Suspense Account in accordance with
Section 5.3 shall be invested by the Trustee as directed by the Administrator in
its sole discretion.
Article IV
LIMITATIONS ON CONTRIBUTIONS
4.1 Reduction of 401(k) Contributions.
(a) If at any time the Administrator determines that the Plan may not
satisfy the actual deferral percentage tests of Section 401(k)(3) of the Code,
as defined in Section 4.2 hereafter, the Administrator may, in its discretion,
reduce the 401(k) Contribution of any Highly Compensated Employee to the extent
necessary to ensure, within a reasonable margin of safety, that the above test
will be satisfied. The Administrator may accomplish this reduction by any method
or combination of methods including, without limitation, the reduction of the
otherwise applicable Compensation against which the Participant's salary
reduction election is applied, the reduction of the rate of 401(k) Contributions
for any Highly Compensated Employee, or the setting of a maximum amount of
401(k) Contributions for any Highly Compensated Employee.
(b) Notwithstanding any provisions of this Section to the
contrary, if after the close of the Plan Year the Administrator determines that
the Plan does not satisfy the actual deferral percentage test, the Administrator
shall reduce the 401(k) Contribution of Highly Compensated Employees to the
extent necessary to satisfy the actual deferral percentage test, in
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accordance with the terms of this paragraph. First, the Highly Compensated
Employee (or Highly Compensated Employees if more than one has the same actual
deferral percentage) with the highest actual deferral percentage shall have his
401(k) Contribution reduced until his actual deferral percentage equals the
actual deferral percentage of Highly Compensated Employee(s) with the next
highest actual deferral percentage. If the actual deferral percentage test is
not satisfied by this initial reduction, then the Highly Compensated Employees
with the highest actual deferral percentage (including the Highly Compensated
Employee(s) who already had a reduction in his 401(k) Contribution) shall have
their 401(k) Contributions reduced until their actual deferral percentages equal
the actual deferral percentage of the Highly Compensated Employee(s) with the
next highest actual deferral percentage. Such reductions shall continue in the
same manner until the actual deferral percentage test is satisfied. The amount
of 401(k) Contributions reduced in accordance with this Section and any income
allocable thereto (determined in accordance with Section 3.6) for such Plan Year
shall be returned to the appropriate Highly Compensated Employees. In order to
satisfy the Actual Deferral Percentage Test of Treas. Reg. section 1.401(k)-1,
any such excess 401(k) Contributions returned to any Participant shall be
returned no later than the close of the Plan Year following the Plan Year to
which such excess 401(k) Contributions relate as required under Treas. Reg.
section 1.401(k)-1(f)(6)(ii); to the extent provided by Treas. Reg. section
1.401(k)-1(f)(6)(i), the Employer shall be liable for a 10% excise tax on any
such excess contributions which are returned to any Participant after the date
which is 2 1/2 months following the close of the Plan Year to which such excess
401(k) Contributions relate.
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(c) The amount of excess 401(k) Contributions, if any, to be
distributed pursuant to this Section shall be reduced by the amount of 401(k)
Contributions in excess of the limitations prescribed by Section 402(g) of the
Code ("Excess Deferrals") which were returned prior to the reductions required
in this Section; provided, that in the event 401(k) Contributions are
distributed to a Participant pursuant to this Section prior to the time Excess
Deferrals with respect to a Plan Year are returned to the Participant, then the
amount of such Excess Deferrals, if any, shall be reduced by the amount of
401(k) Contributions previously returned in accordance with the provisions of
this Section.
4.2 Actual Deferral Percentage Test.
(a) For purposes of Section 4.1, the "actual deferral percentage test"
shall mean a test which is satisfied if either one of the following two tests
are satisfied: (a) the actual deferral percentage for the Highly Compensated
Employees is not more than the actual deferral percentage for all other Eligible
Employees multiplied by 1.25; or (b) the excess of the actual deferral
percentage for the Highly Compensated Employees over the actual deferral
percentage for all other Eligible Employees is not more than two percent (2%),
and the actual deferral percentage for the Highly Compensated Employees is not
more than the actual deferral percentage for all other Eligible Employees
multiplied by 2. For purposes of this Section, the "actual deferral percentage"
for Highly Compensated Employees or for all other Eligible Employees for a Plan
Year shall mean the average of the ratios, calculated separately for each
Employee in such group, of the amount of the Elective Contributions, if any,
under the Plan paid on behalf of such Employee for such Plan Year to the
Employee's Compensation for such Plan Year. For purposes of the Actual Deferral
Percentage Test, only those 401(k) Contributions which relate to Compensation
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for services performed during the Plan Year for which such Test is being
performed and which would have been paid no later than 2 1/2 months following
the close of such Plan Year will be taken into account.
(b) In determining the actual deferral percentage of any Eligible
Employee who is a Highly Compensated Employee and who is either a five percent
owner or one of the top-ten most Highly Compensated Employees, the family
aggregation rules of Section 414(q)(6) of the Code shall apply. The actual
deferral percentage of the family group shall be treated as the actual deferral
percentage of one Highly Compensated Employee and shall be equal to the actual
deferral percentage determined by combining the 401(k) Contributions and
Compensation of all eligible Family Members.
4.3 Reduction of Matching Contributions.
If after the close of the Plan Year the Administrator determines that
the Plan does not satisfy the actual contribution percentage test of Section
401(m)(2) of the Code, as defined in Section 4.4 hereafter, the Administrator
shall reduce the Matching Contribution of any Highly Compensated Employees to
the extent necessary to satisfy the actual contribution percentage test, in
accordance with the terms of this paragraph. First, the Highly Compensated
Employee (or Highly Compensated Employees if more than one has the same actual
contribution percentage) with the highest actual contribution percentage shall
have his Matching Contribution reduced until his actual contribution percentage
equals the actual contribution percentage of the Highly Compensated Employee(s)
with the next highest actual contribution percentage. If the actual contribution
percentage test is not satisfied by this initial reduction, then the Highly
Compensated Employees with the highest actual contribution percentage (including
the Highly Compensated Employee(s) who already had a reduction in his Matching
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Contribution) shall have their Matching Contributions reduced until their actual
contribution percentages equal the actual contribution percentage of the Highly
Compensated Employee(s) with the next highest actual contribution percentage.
Such reductions shall continue in the same manner until the actual contribution
percentage test is satisfied. The amount of Matching Contributions reduced in
accordance with this Section and any income allocable thereto (determined in
accordance with Section 3.6) for such Plan Year shall be returned to the
appropriate Highly Compensated Employees. In order to satisfy the Actual
Contribution Percentage Test of Treas. Reg. section 1.401(m)-1, any such excess
Matching Contributions returned to any Participant shall be returned no later
than the close of the Plan Year following the Plan Year to which such excess
Matching Contributions relate as required under Treas. Reg. section
1.401(m)-1(e)(5)(ii); to the extent provided by Treas. Reg. section
1.401(m)-1(e)(5)(i), the Employer shall be liable for a 10% excise tax on any
such excess Matching Contributions which are returned to any Participant after
the date which is 2 1/2 months following the close of the Plan Year to which
such excess Matching Contributions relate.
4.4 Actual Contribution Percentage Test.
(a) For purposes of Section 4.3 the "actual contribution percentage
test" shall mean a test which is satisfied if either one of the following two
tests are satisfied: (a) the actual contribution percentage for the Highly
Compensated Employees is not more than the actual contribution percentage for
all other Eligible 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 Eligible Employees is not more
than two percent (2%), and the actual contribution percentage for the
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Highly Compensated Employees is not more than the actual contribution
percentage for all other Eligible Employees multiplied by 2; provided, that
the test specified in (b) shall be used only to the extent permitted by the
Code if test (b) is used by the Plan under Section 4.2. For purposes of this
Section, the "actual contribution percentage" for Highly Compensated Employees
or for all other Eligible Employees for a Plan Year shall mean the average of
the ratios, calculated separately for each Employee in such group, of the
amount of the Matching Contributions under the Plan paid on behalf of such
Employee for such Plan Year to the Employee's Compensation for such Plan Year.
(b) In determining the actual contribution percentage of any Eligible
Employee who is a Highly Compensated Employee and who is either a five percent
owner or one of the top-ten most Highly Compensated Employees, the family
aggregation rules of Section 414(q)(6) of the Code shall apply. The actual
contribution percentage of the family group shall be treated as the actual
contribution percentage of one Highly Compensated Employee and shall be equal to
the actual contribution percentage determined by combining the Matching
Contributions and Compensation of all eligible Family Members.
4.5 Aggregate Limits Test.
(a) In the event that both the actual deferral percentage test and the
actual contribution percentage test are satisfied only by using the test whereby
the percentage for Highly Compensated Employees over the percentage for all
other Eligible Employees is not more than two percent (2%), and the percentage
for Highly Compensated Employees is not more than the percentage for all other
Eligible Employees multiplied by 2, the Plan may satisfy the applicable
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nondiscrimination requirements under the Code by satisfying the
"aggregate limits test," or any other alternative test permitted by the Internal
Revenue Service.
(b) The aggregate limits test shall be satisfied if the sum of the
average of actual deferral percentages of all Highly Compensated Employees
and the average of actual contribution percentages for all Highly Compensated
Employees does not exceed the aggregate limit. For purposes of this Section, the
aggregate limit is equal to the greater of:
(i) The sum of:
(A) 125 percent of the greater of (1) the average actual
deferral percentage of all Eligible Employees who are not Highly Compensated
Employees or (2) the average actual contribution percentage of all Eligible
Employees who are not Highly Compensated Employees; and
(B) Two plus the lesser of (1) or (2) above; provided, that
in no event shall this amount exceed two hundred percent (200%) of the lesser of
(1) or (2)above; or
(ii) The sum of:
(A) 125 percent of the lesser of (1) the average actual
deferral percentage of all Eligible Employees who are not Highly Compensated
Employees or (2) the average actual contribution percentage of all Eligible
Employees who are not Highly Compensated Employees; and
(B) Two plus the greater of (1) or (2) above; provided,
that in no event shall this amount exceed two hundred percent (200%) of the
greater of (1) or (2) above.
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(c) If after the close of the Plan Year the Administrator determines
that the Plan does not satisfy the aggregate limits test, then the
Administrator shall first reduce any unmatched 401(k) Contributions of
Highly Compensated Employees in accordance with Section 4.2 to the extent
necessary to satisfy the aggregate limits test. If, after distribution of all
unmatched 401(k) Contributions, the Plan does not satisfy the aggregate
limits test, then the Administrator shall reduce the Matching Contributions
of Highly Compensated Employees in accordance with Section 4.3. to the extent
necessary to satisfy the aggregate limits test.
4.6 Maximum Annual Additions.
(a) Notwithstanding any other provision of the Plan to the contrary,
the annual additions (as that term is defined in Code Section 415(c)) to
a Participant's Account under this Plan and any other defined contribution plans
maintained by the Employer or an Affiliate with respect to a Plan Year, which
shall be the "limitation year," shall not exceed the lesser of (i) Thirty
Thousand Dollars ($30,000), or, if greater, one fourth (1/4) of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code, or (ii) twenty-five
percent (25%) of the Participant's Compensation.
(b) In the event that it is determined that the annual additions to a
Participant's Account with respect to a Plan Year exceed the limitations
contained in Section 4.6(a), such annual additions shall be reduced to the
extent necessary to bring them within such limitations by (i) reducing the
Profit Sharing Contribution otherwise allocable to the Participant's Account
attributable to an allocation of Forfeitures as described in Section 5.3; (ii)
if the foregoing reduction is insufficient to satisfy Code Section 415, reducing
the Profit Sharing Contribution otherwise allocable to the Participant's Account
to the extent necessary to satisfy such limitations; (iii) if the foregoing
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reductions are insufficient to satisfy Code Section 415, reducing the Matching
Contributions otherwise allocable to the Participant's Account to the extent
necessary to satisfy such limitations; and (iv) if the foregoing reductions are
insufficient to satisfy Code Section 415, reducing the 401(k) Contributions
otherwise allocable to a Participant's Account to the extent necessary to
satisfy such limitations.
(c) If a Participant participates in a defined benefit plan(s)
maintained by the Employer and, for any Plan Year, the sum of (i) the
Participant's defined contribution plan fraction under the Plan and any other
defined contribution plans maintained by the Employer and (ii) the
Participant's defined benefit plan fraction under such defined benefit plan(s)
is greater than one (1.0), the Contributions for the benefit of such Participant
under this Plan shall not be affected, but his benefits under such defined
benefit plan(s) shall be reduced by such amount as is necessary to cause such
sum not to exceed one (1.0). For purposes of this paragraph, the defined
benefit plan fraction for any Plan Year is a fraction, the numerator of which
is the projected annual benefit of the Participant under the plan(s) as of
the close of the Plan Year and the denominator of which is the lesser of
(i) 1.25 times the dollar limitation in effect for that Plan Year under Section
4.6(a), or (ii) 1.4 times the amount which may be taken into account under the
compensation limitation for that Plan Year under Section 415(b)(1)(B) of the
Code. The defined contribution plan fraction for any Plan Year is a fraction,
the numerator of which is the sum of all of the annual additions to the
Participant's accounts under the Plan and any other defined contribution plan(s)
maintained by the Employer, or any predecessor defined contribution plan(s),
for that Plan Year and all prior Plan Years, and the denominator of which is the
lesser of (i) 1.25 times the maximum dollar limitation of Section 3.12(a) or
(ii) 1.4 times twenty-five percent (25%) of the Participant's Compensation for
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such Plan Year and for each prior year of employment with the Employer. The
defined benefit plan fraction, annual addition and the defined contribution plan
fraction shall in any event have the meanings provided in and be computed and
adjusted as may be required by Section 415 of the Code and Treasury
regulations issued pursuant to such Section.
(d) For purposes of this Section 4.6, Compensation shall mean
compensation as defined in Treas. Reg. section 1.415-2(d)(11)(i).
Article V
VESTING AND FORFEITURES
5.1 Vesting.
(a)(1) The vested portion of any Participant's Profit Sharing Account
and that portion of his Matching Account attributable to Matching Contributions
for Plan Years beginning on and after January 1, 1993 shall be a percentage of
the total amount credited to such Accounts determined on the basis of the
Participant's number of Years of Service according to the following Schedule:
Vesting Schedule
Years of Service Vested Percentage
Less than 3 0
3 20
4 40
5 60
6 80
7 100
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(a)(2) The vested portion of any Participant's Profit Sharing Account
and that portion of his Matching Account attributable to Matching Contributions
for Plan Years beginning on and after January 1, 1998 shall be a percentage of
the total amount credited to such Accounts determined on the basis of the
Participant's number of Years of Service according to the following Schedule:
Vesting Schedule
Years of Service Vested Percentage
Less than 3 0
3 20
4 50
5 100
(b) A Participant shall be 100% vested at all times in his 401(k)
Account, Rollover Account and that portion of his Matching Account attributable
to Matching Contributions for Plan Years beginning prior to January 1, 1993.
(c) To the extent not fully vested, a Participant shall become 100%
vested in all amounts credited to his Account as of his Normal Retirement Date
or the date such Participant dies, or terminates employment by reason of Total
and Permanent Disability.
5.2 Break In Service Rules.
If any Former Participant is reemployed by the Employer after a 1-Year
Break in Service has occurred, Years of Service shall include Years of Service
prior to his 1-Year Break in Service subject to the following rules:
(a) If a Former Participant has a 1-Year Break in Service, both his
pre-break and post-break service shall be considered in computing Years of
Service for vesting purposes only after he has been employed for one (1) Year of
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Service following the date of his reemployment with the Employer;
(b) A non-vested Former Participant's Years of Service prior to a 1-
Year Break in Service shall not be considered for vesting purposes if such
Former Participant's consecutive 1-Year Breaks in Service equal or exceed the
greater of (A) five (5) or (B) the aggregate number of his pre-break Years of
Service;
(c) Any Former Participant who receives a distribution of the vested
balance of his Account shall be credited with Years of Service in accordance
with the foregoing rules only upon repayment of the distributed amount in
accordance with Section 5.3(c).
5.3 Forfeitures.
(a) If a Participant's employment terminates and he receives a
distribution of the vested balance of his Account, the nonvested portion of such
Account shall be forfeited as of the date his employment terminated and
allocated in accordance with subsection (b), below. If the Participant does not
receive the vested portion of his Account upon termination or if the Participant
incurs a 1-Year Break in Service without termination of employment, the
nonvested portion of his Account shall continue to be revalued in accordance
with the Participant's investment direction pursuant to Section 3.6, and shall
not be forfeited until he incurs five consecutive 1-Year Breaks in Service after
the date the Participant terminated employment. After such period, the nonvested
portion of his Account shall be forfeited and reallocated in accordance with
subsection (b) below. Amounts forfeited in accordance with this Section shall be
credited to the Suspense Account pending allocation pursuant to subsection (b)
below.
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(b) The total amount of Forfeitures attributable to all Participants'
nonvested Profit Sharing Accounts determined as of the last day of each Plan
Year in accordance with (a) above shall be allocated as an additional Profit
Sharing Contribution in accordance with Section 3.4(a) to each Participant
entitled to a Profit Sharing Contribution in the same proportion that the
Participant's allocation points (as defined in Section 3.4(a)) bears to the
total allocation points for all Participants for the Plan Year for which the
Forfeitures are allocated. Forfeitures attributable to Participants' nonvested
Matching Accounts shall be used to reduce the Matching Contribution the Employer
would otherwise contribute pursuant to Section 3.1, and the amount of such
Forfeitures shall be added to and allocated together with such reduced Matching
Contribution among Matching Contribution Accounts as provided in Section 3.4(c).
(c) If a Former Participant is reemployed by the Employer before he
incurs five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of the vested balance of his Account,
the amount forfeited in accordance with this Section shall be reinstated if he
repays the full amount distributed to him within 5 years from the date of his
reemployment. The reinstated amount shall be credited to the Participant's
Account first, by allocation from Forfeitures occurring in the Plan Year in
which the repayment is made and second, from the Profit Sharing Contribution for
such Plan Year or any special contribution made by the Employer as determined by
the Employer in its sole discretion.
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Article VI
BENEFITS
6.1 Distribution of Benefits.
A Participant who terminates employment for any reason other than
death shall be entitled to a distribution of the vested balance of his Account
determined as of his termination of employment. The vested balance of a
Participant's Account shall be distributed in a form provided under Section 6.2.
6.2 Form of Distribution.
(a) A Participant's benefit will be paid in a single lump-sum payment
in cash or, at the election of the Participant, in cash and in stock of the
Employer to the extent the Participant's Account is invested in such stock.
(b) Accrued Benefit as of December 31, 1994.
(i) Unless otherwise elected as provided below, a Participant
who is married on the Annuity Starting Date shall receive the value of his
Account determined as of December 31, 1994, in the form of a joint and survivor
annuity. The joint and survivor annuity shall be equal in value to a single life
annuity. Such joint and survivor benefits following the Participant's death
shall continue to the spouse during the spouse's lifetime at a rate equal to 50%
of the benefits which were payable to the Participant. The Participant may elect
to receive a smaller annuity benefit with continuation of payments to the spouse
at a rate of seventy-five percent (75%) or one hundred percent (100%) of the
benefit payable to the Participant during his lifetime.
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(ii) A Participant may elect to waive the joint and survivor
annuity provided that an election to waive the joint and survivor annuity must
be made by the Participant in writing during the election period set forth below
and be consented to by the Participant's spouse. Such spouse's consent must
acknowledge the effect of such election and be witnessed by a Plan
representative or a notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the required consent
cannot be obtained because there is no spouse, the spouse cannot be located, or
other circumstances that may be prescribed by Treasury regulations. The election
made by the Participant and consented to by his spouse may be revoked by the
Participant in writing without the consent of the spouse at any time during the
election period. Any new election must comply with the requirements of this
paragraph. A former spouse's waiver shall not be binding on a new spouse. The
election period to waive the joint and survivor annuity shall be the period
beginning not more than 90 days prior to the Annuity Starting Date.
(iii) A Participant who is not married or who has waived the joint
and survivor annuity distribution as provided above may elect to receive the
value of his Account determined as of December 31, 1994 in the form of one of
the following options:
(A) One lump-sum payment in cash or, at the election of
the Participant, in cash and stock of the Employer to the extent the
Participant's Account is invested in such stock.
(B) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. The period over which such payment is
to be made shall not extend beyond the Participant's life expectancy (or the
life expectancy of the Participant and his designated Beneficiary). The duration
and number of installment payments shall be elected by the Participant.
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(C) Purchase of an annuity; provided that such annuity may
not provide for payments over a period extending beyond either the life of
the Participant (or the lives of the Participant and his Beneficiary) or the
life expectancy of the Participant (or the life expectancy of the Participant
and his Beneficiary).
(iv) If the Participant's entire interest is to be distributed in
other than a lump sum, then the amount to be distributed each year must be at
least an amount equal to the quotient obtained by dividing the Participant's
entire interest by the life expectancy of the Participant or the joint and life
survivor expectancy of the Participant and his designated Beneficiary. For
purposes of this Section, the life expectancy of a Participant and a
Participant's spouse (other than in the case of a life annuity) may be
redetermined from time to time, but not more frequently than annually, and in
accordance with such rules as may be prescribed by Treasury regulations.
6.3 Time of Distributions.
(a) Unless otherwise elected in writing by a Former Participant, (such
election may not result in a death benefit that is more than incidental),
distribution of benefits under this Plan shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occur:
(i) the date on which the Participant attains age 65,
(ii) the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or
(iii) the date the Participant terminates his service with the
Employer.
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(b) Notwithstanding the foregoing or any provision of this Plan to the
contrary, a Participant's or Former Participant's Account shall be distributed
to him in accordance with the minimum distribution requirements of Code Section
401(a)(9) beginning no later than April 1 of the calendar year following the
calendar year in which he attains age seventy and one-half (70 1/2) but only
with respect to a Participant who attains age 70 1/2 on or after January 1, 1988
or is a "five percent owner" (as defined in Section 1.28).
6.4 Mandatory Cash Out Payment.
Notwithstanding anything to the contrary contained herein, if the value
of the vested balance of a Participant's Account is $5,000 or less as of the
date such Participant terminates employment, the Administrator shall direct the
Trustee to distribute the vested balance of the Participant's Account in a
single-lump sum payment.
6.5 In-Service Distributions.
(a) Age 59 1/2.
Effective for Plan Years beginning on and after January 1, 1993,
upon attainment of age 59 1/2 a Participant may elect to receive a distribution
of all or any portion of the vested balance of his Account. Such election must
be made on forms prescribed by the Administrator. Such distribution shall be
made in accordance with Section 6.2, except that such distribution shall be made
in cash only.
(b) Hardship Distributions.
At the discretion of the Administrator in accordance with uniform
principles consistently applied, the Administrator may direct the Trustee to
make a distribution in cash to any Participant or his Beneficiary of up to 100%
of the aggregate of the Participant's 401(k) Account and Rollover Account in the
case of financial hardship. A Participant may request the distribution of some
or all of the Participant's 401(k) Account (including the income
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attributable to 401(k) Contributions as of December 31, 1988) and/or the
Participant's Rollover Account, if such a distribution is necessary due to the
immediate and heavy financial need of the Participant. Application to receive a
hardship distribution shall be made on a form provided by the Employer and must
specify the reasons for the distribution request. As a condition precedent to
the approval of a hardship distribution request, the Participant must take a
loan from the Plan, if available, unless the Participant demonstrates to the
satisfaction of the Administrator, that such a loan would not relieve or would
increase the Participant's financial hardship.
(i) The Participant may receive a hardship distribution upon
demonstrating to the Administrator that such distribution is necessary to
relieve a financial hardship arising due to:
(A) medical expenses incurred by the Participant or the
Participant's spouse or dependents;
(B) the purchase of Participant's principal residence (but
not including mortgage payments),
(C) the payments of tuition and related educational
expenses for the next 12 months of post-secondary education for the Participant,
the Participant's spouse, children or dependents; or
(D) As necessary to prevent the eviction from the
Participant's principal residence or the foreclosure on the mortgage on the
Participant's principal residence.
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(ii) The Participant must demonstrate to the Administrator that
the financial hardship cannot be relieved by:
(A) reimbursement or compensation by insurance or
otherwise;
(B) reasonable liquidation of the Participant's assets, to
the extent that the liquidation itself would not cause a financial hardship;
(C) cessation of 401(k) Contributions under the Plan; or
(D) other distributions or nontaxable loans (determined
at the time of the loan) from any other tax-qualified plans in which the
Participant participates, or by borrowing from commercial sources at reasonable
commercial terms.
(iii) For purposes of this Section 6.5(b), the Participant's
resources shall include the resources of his spouse and minor children that are
reasonably available to the Participant.
(iv) A hardship distribution cannot be made within twelve (12)
months after the last hardship distribution. A Participant's hardship
distribution must not exceed the amount necessary to relieve the hardship
(including amounts necessary to pay any income taxes or penalties reasonably
anticipated to result from the distribution). No distribution may be made of an
amount which has been loaned to a Participant and not repaid as of the date of
the hardship distribution.
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6.6 Location of Participant Unknown.
In the event that all, or any portion, of the benefit payable to a
Participant under this Article VI shall, at the expiration of five (5) years
after it shall become payable, remain unpaid solely by reason of the inability
of the Administrator to locate or ascertain the whereabouts of such Participant,
the amount so payable shall be forfeited and shall be used to reduce the cost of
the Plan. In the event a Participant is located subsequent to his benefit being
forfeited, such benefit shall be restored.
6.7 Limitations on Benefits and Distributions.
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate payee"
under a "qualified domestic relations order "as those terms are defined in Code
Section 414(p).
Article VII
DEATH BENEFITS
7.1 Death Before Payment of Benefits.
If a Participant or Former Participant dies before he begins to receive
benefits under the Plan, the vested balance of such Participant's or Former
Participant's Account shall be distributed to the Participant's or Former
Participant's Beneficiary in a single lump sum within a reasonable period of
time following the date of death but no later than December 31st of the calendar
year following the calendar year of such Participant's or Former Participant's
death. In the event no valid designation of Beneficiary exists at the time of
the Participant's or Former Participant's death, and the spouse's benefit
provisions of Section 7.2 do not apply, the death benefit shall be payable to
his estate.
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7.2 Spouse's Death Benefit.
(a) If a Participant or Former Participant is married on the date of
his death, such Participant's or Former Participant's spouse shall be his
Beneficiary unless the Participant or Former Participant waives his spouse's
death benefit and his spouse consents to such waiver in accordance with Section
7.2(b).
(b) A Participant or Former Participant who is married may designate
a Beneficiary other than his spouse on a form prescribed by the Administrator.
Such designation shall be effective only if the Participant's or Former
Participant's spouse at the date of death has consented in writing to the
election, such consent is witnessed by a notary public or a plan representative
and acknowledges the effect of the election. Such spousal consent is not
required, however, if the Administrator is satisfied that the spouse cannot be
located.
7.3 Change in Beneficiary.
A Participant or Former Participant may at any time change or revoke
his designation of a Beneficiary by filing a written notice of such change or
revocation with the Administrator. Notwithstanding the foregoing, a Participant
or Former Participant who is married may change or revoke his Beneficiary
designation only in accordance with Section 7.2 unless the effect of such change
or revocation is to designate the Participant's or Former Participant's spouse
as the Beneficiary.
7.4 Proof of Death.
The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the vested balance of
the Account of a deceased Participant or Former Participant as the Administrator
may deem desirable. The Administrator's determination of death and of the right
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of any person to receive payment shall be conclusive and binding.
7.5 Accrued Benefit as of December 31, 1994.
(a) Following the death of a Participant or Former Participant, the
distribution of the value of a Participant's or Former Participant's Account
determined as of December 31, 1994 shall be made in accordance with this Section
7.5.
(b) A Participant or Former Participant who dies before the Annuity
Starting Date and who has a surviving spouse shall have the value of his Account
determined as of December 31, 1994 paid to his surviving spouse in the form of a
Qualified Pre-Retirement Survivor Annuity. Payment of such benefits must
commence by the date the Participant or Former Participant would have attained
the Normal Retirement Age under the Plan, unless the surviving spouse elects a
later date. In no event, shall such distribution commence later than the date on
which the deceased Participant or Former Participant would have attained age
seventy and one-half (70 1/2). Any election to waive the Qualified
Pre-Retirement Survivor Annuity must be made by the Participant or Former
Participant in writing and shall require the spouse's consent in the same manner
provided for in Section 7.2.
(c) If the Qualified Pre-Retirement Survivor Annuity does not apply,
the vested balance of the Participant or Former Participant's Account as of
December 31, 1994 may be paid to the Participant's or Former Participant's
Beneficiary by either of the following methods, at the election of the
Beneficiary:
(i) One lump-sum payment in cash or, at the election of the
Beneficiary, in cash and stock of the Employer to the extent the Participant's
or Former Participant's Account is invested in such stock.
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(ii) Payments over a period certain in monthly, quarterly,
semi-annual or annual cash installments. The period over which such payment is
to be made shall not extend beyond the Beneficiary's life expectancy. The
duration and number of installment payments shall be elected by the Participant.
(iii) Purchase of an annuity; provided that such annuity may not
provide for payments over a period extending beyond either the life of the
Participant (or the lives of the Participant and his Beneficiary) or the life
expectancy of the Participant (or the life expectancy of the Participant and his
Beneficiary).
(d) If the distribution of a Participant's or Former Participant's
interest has begun and the Participant or Former Participant dies before his
entire interest has been distributed to him under Section 7.5, the remaining
portion of such interest shall be distributed at least as rapidly as under the
method of distribution selected by the Participant or Former Participant as of
his date of death.
(e) If a Participant or Former Participant dies before he has begun to
receive any distributions of his entire interest under the Plan, his death
benefit shall be distributed to his Beneficiary within 5 years after his death.
Such 5-year distribution requirement shall not apply to any portion of the
deceased Participant's or Former Participant's interest which is payable to or
for the benefit of a designated Beneficiary. In such event, such portion may be
distributed over the life of such designated Beneficiary (or over a period not
extending beyond the life expectancy of such designated Beneficiary) provided
such distribution begins not later than one (1) year after the date of the
Participant's or Former Participant's death (or such later date as may be
prescribed by Treasury regulations). Notwithstanding the foregoing, in the event
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the Participant's or Former Participant's spouse is his Beneficiary,
distributions shall be made in accordance with Section 7.2(b).
7.6 Mandatory Cash-Out Payment. Notwithstanding anything in
this Article VII to the contrary, if the value of the vested balance of a
Participant's or Former Participant's Account is $3,500 or less as of the date
of such Participant's or Former Participant's death, the Administrator shall
direct the Trustee to distribute the vested balance of the Participant's or
Former Participant's Account in a single lump-sum payment.
7.7 Distribution for Minor Beneficiary.
In the event a distribution is to be made to a minor, the Administrator
may, in the Administrator's sole discretion, direct that such distribution be
paid to the legal guardian or, if none, to a parent of such Beneficiary or a
responsible adult with whom the Beneficiary maintains his residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to
Minors Act, if such is permitted by the laws of the state in which said
Beneficiary resides. Such a payment to the legal guardian, parent, responsible
adult or custodian of a minor Beneficiary shall fully discharge the Trustee,
Employer, Administrator and Plan from further liability on account thereof.
7.8 Location of Beneficiary Unknown.
In the event that all, or any portion of the benefit payable to a
Beneficiary under this Article VII shall, at the expiration of five (5) years
after it shall become payable, remain unpaid solely by reason of the inability
of the Administrator to locate or ascertain the whereabouts of such Beneficiary,
the amount so payable shall be forfeited and shall be used to reduce the cost
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of the Plan. In the event a Beneficiary is located subsequent to his benefit
being forfeited, such benefit shall be restored.
Article VIII
DIRECT ROLLOVER OF BENEFITS
8.1 Right to Direct Rollover. With respect to any distributions from the
Plan on or after January 1, 1993, except as otherwise provided, any Distributee
may elect, in accordance with the provisions of this Section, to have all or a
designated portion of an Eligible Rollover Distribution paid directly to a
specified Eligible Retirement Plan in a Direct Rollover.
8.2 Limitations on Direct Rollover. A Distributee may elect to
have a portion of an Eligible Rollover Distribution transferred directly to an
Eligible Retirement Plan in a Direct Rollover and the remaining portion paid
directly to him or her. A Distributee may elect only one Direct Rollover for
each Eligible Rollover Distribution.
8.3 Election of Direct Rollover. A Distributee may elect a Direct Rollover
of an Eligible Rollover Distribution by filing with the Administrator such forms
as the Administrator may prescribe. The Administrator is entitled to reasonably
rely on the information provided on such forms by a Distributee in making a
Direct Rollover. In the event that a Distributee does not provide all of the
information requested on the forms, or fails to submit the forms to the
Administrator in a timely manner, the Administrator may directly pay the amount
of the Eligible Rollover Distribution to the Distributee.
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8.4 Payment of Direct Rollover. If a Distributee elects a
Direct Rollover of his Eligible Rollover Distribution in a manner which complies
with Section 8.3 hereof, such Eligible Rollover Distribution may be accomplished
by any reasonable means of direct payment to the designated Eligible Retirement
Plan selected by the Administrator. Reasonable means of direct payment shall
include:
(a) mailing a check, negotiable only by the trustee or custodian of
the designated Eligible Retirement Plan, to the trustee or custodian of such
plan;
(b) wire transfer directed exclusively to the trustee or custodian of
the designated Eligible Retirement Plan;
(c) providing the Distributee with a check for delivery to the
designated Eligible Retirement Plan so long as:
(i) the check is endorsed "[name of trustee or custodian] as
trustee of [name of Eligible Retirement Plan]," and
(ii) the check explicitly states that it is for the benefit of
the Distributee whose Eligible Rollover Distribution is to be transferred in
a Direct Rollover.
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Article IX
ADMINISTRATION
9.1 Powers and Responsibilities of the Plan Sponsor.
(a) The Plan Sponsor shall be empowered, under the direction of its
board of directors, to appoint and remove the Trustee and the Administrator from
time to time as it deems necessary for the proper administration of the Plan to
assure that the Plan is being operated for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the terms of this Plan,
the Code, and ERISA.
(b) The Plan Sponsor, in its discretion, may appoint an Investment
Manager to manage all or a designated portion of the assets of the Plan. In such
event, the Trustee shall follow the directive of the Investment Manager in
investing the assets of the Plan managed by the Investment Manager.
(c) The Plan Sponsor shall periodically review the performance of any
person to whom duties have been delegated or allocated by it under the
provisions of this Plan or pursuant to procedures established hereunder.
9.2 Assignment and Designation of Administrative Authority.
(a) The Plan Sponsor shall appoint the members of the Plan
Administrative Committee (the "Administrative Committee") which shall be the
Administrator under the Plan. The Administrative Committee shall consist of
three or more members appointed by the Plan Sponsor. Any person, including but
not limited to Employees of an Employer shall be eligible to serve on the
Administrative Committee. Members of the Administrative Committee shall serve at
the pleasure of the Plan Sponsor and may be removed at any time by the Plan
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Sponsor. Any member may resign at any time by delivering his written
resignation to the Plan Sponsor, and any member shall be deemed to have resigned
on the date on which his employment with the Employer terminates. Members shall
serve without compensation, but shall be reimbursed for all necessary and proper
expenses incurred in carrying out their duties and responsibilities. As of the
Effective Date, the initial members of the Administrative Committee are Michael
S. Leeds, Robert D. Marafioti, Joseph E. Sichler, and Pearl Turner.
(b) The Administrative Committee shall conduct its business with a
quorum of a majority of its members, and that actions taken by the
Administrative Committee may be taken upon the affirmative vote of a majority of
its members. The Administrative Committee may act by meeting (and may meet by
telephone) or by unanimous written consent without a meeting. No member of an
Administrative Committee shall participate in any decision respecting his
interest as a Participant in the Plan (other than a decision respecting the
interest of a group of similarly situated Plan Participants which includes the
Administrative Committee member).
(c) In addition to the rights and obligations of the Administrator set
forth in the Plan, but except as specifically provided in subsection (d), the
Administrative Committee is hereby granted the full authority and power to, and
the responsibility to, act as settlor of the Trust and oversee the operation of
and provide the policy for the Trust and the Plan. Without limitation of the
foregoing, that the Plan Sponsor delegates all of its duties and
responsibilities with respect to the Plan to the Administrative Committee
including, but not limited to:
(i) selection and removal of Trustees;
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(ii) selection and removal of Investment Managers;
(iii) setting policy for the administration of the Plan and for
the investment of the Plan's assets;
(iv) adopting amendments to the Plan;
(v) periodically evaluating and reviewing the performance of
service providers and fiduciaries;
(vi) reporting annually to the Plan Sponsor on the operation and
status of the Profit Sharing Plan;
(vii) setting general investment objectives and funding guidelines
for the Plan;
(viii) securing auditing, legal and other advice as appropriate;
and
(ix) determining all matters of policy necessary for the
proper administration of the Plan.
(d) In no event shall the Administrative Committee have the authority
to adopt any amendment to the Plan which will have a material affect on the
Employer's cost of participating in the Plan, will terminate the Plan, will
merge the Plan with another tax-qualified plan, or will fundamentally change the
nature of the Plan (e.g., to an employee stock ownership plan).
(e) The Administrative Committee shall have the authority to delegate
its duties and responsibilities to any subcommittee made up of one or more of
its members or to such other individuals or entities as the Administrative
Committee may, in its sole discretion, deem appropriate.
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(f) Any employee or director of the Employer who is a member of an
Administrative Committee, shall be indemnified and held harmless, to the maximum
extent permitted by law, for any actions taken in good faith on behalf of the
Employer with respect to his duties and responsibilities to the Plans.
9.3 Powers, Duties and Responsibilities of the Administrator.
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power to interpret and
construe the terms of the Plan and determine all questions arising in connection
with the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of
this Plan; provided, that any procedure, discretionary act, interpretation or
construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of ERISA and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
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(a) to determine all questions relating to the eligibility of an
Employee to participate or remain a Participant hereunder;
(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which a Participant shall be entitled
hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules or regulations of the Plan as are consistent with the terms hereof;
(f) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be contributed to the
Trust Fund;
(g) to consult with the Employer and the Trustee regarding the short
and long-term liquidity needs of the Plan in order that the Trustee can exercise
any investment discretion in a manner designed to accomplish specific
objectives;
(h) to assist any Participant regarding his rights, benefits, or
elections available under the Plan;
(i) to prepare and distribute to Employees a procedure for notifying
Participants and Beneficiaries of their rights to elect joint and survivor
annuities and Qualified Pre-Retirement Survivor Annuities as required by ERISA
and regulations thereunder; and
(j) to prepare and implement a procedure to notify Eligible Employees
that they may elect to have a portion of their Compensation reduced or paid to
them in cash.
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9.4 Records and Reports.
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be necessary
for proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, the Department of
Labor, Participants, Beneficiaries and others as required by law.
9.5 Appointment of Advisors.
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisors, and other persons
as the Administrator or the Trustee deems necessary or desirable in connection
with the administration of this Plan.
9.6 Information from Employer.
To enable the Administrator to perform its functions, the Employer
shall supply full and timely information to the Administrator on all matters
relating to the Compensation of all Participants, their Hours of Service, their
Years of Service, their retirement, death, disability, or termination of
employment, and such other pertinent facts as the Administrator may require;
and the Administrator shall advise the Trustee of such of the foregoing facts
as may be pertinent to the Trustee's duties under the Plan. The Administrator
may rely upon such information as is supplied by the Employer and shall have
no duty or responsibility to verify such information.
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9.7 Payment of Expenses.
All expenses of administration shall be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incidental
to the functioning of the Administrator, including, but not limited to,
fees of accountants, counsel, and other specialists and their agents, and other
costs of administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund.
9.8 Claims Procedure.
Claims for benefits under the Plan may be filed with the Administrator
on forms supplied by the Employer. Written notice of the disposition of a
claim shall be furnished to the claimant within 90 days after the application
is filed. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
9.9 Claims Review Procedure.
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 9.8
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 9.8. The
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Administrator shall then conduct a hearing within the next 60 days, at
which the claimant may be represented by an attorney or any other representative
of his choosing and at which the claimant shall have an opportunity to submit
written and oral evidence and arguments in support of his claim. At the
hearing (or prior thereto upon 5 business days written notice to the
Administrator) the claimant or his representative shall have an opportunity to
review all documents in the possession of the Administrator which are pertinent
to the claim at issue and its disallowance. Either the claimant or the
Administrator may cause a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the proceedings
shall be furnished to both parties by the court reporter. The full expenses of
any such court reporter and such transcripts shall be borne by the party
causing the court reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within 60 days of
receipt of the appeal (unless there has been an extension of 60 days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
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Article X
TOP-HEAVY PROVISIONS
10.1 In General.
If the Plan should for any Plan Year become top-heavy as defined in
Section 10.2, then, notwithstanding any other provisions of the Plan, the rules
in Section 10.3 shall apply to the Plan.
10.2 Top-Heavy Determination.
(a) Top-Heavy Defined.
The Plan is top-heavy for a Plan Year if, as of the Determination
Date, the aggregate value of the Accounts under the Plan for Key Employees
exceeds sixty percent (60%) of the aggregate value of the Accounts for all
Employees, as computed under Section 416(g) of the Code. The "Determination
Date" for purposes of this Section shall mean the last day of the Plan Year
preceding the Plan Year in question. The value of the accumulated benefit for
any Employee as of a Plan Year shall include the aggregate distributions,
including withdrawals, made with respect to such Employee under the Plan during
the five-year period ending on the last day of the preceding Plan Year.
(b) Required Aggregation Groups.
If the Plan is required to be aggregated with other plans under
the provisions of this Section 10.2(b) then the aggregated plans taken together
shall constitute the Plan for purposes of this Section. Notwithstanding the
foregoing, if the Plan is required to be aggregated with a group of plans in a
required aggregation group, if the required aggregation group is not top-heavy
for a Plan Year, the Plan is not top-heavy for that Plan Year, and if the
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required aggregation group is top-heavy for a Plan Year, the Plan is top-heavy
for that Plan Year. For purposes of the preceding sentence, a required
aggregation group means each tax-qualified plan of the Employer or an Affiliate
in which a Key Employee participates, and each other such plan which enables any
plan in which a Key Employee participates to meet the coverage and anti-
discrimination requirements of Sections 401(a)(4) and 410 of the Code.
(c) Permissive Aggregation Groups.
Notwithstanding the above provisions, the Plan will not be
top-heavy in any Plan Year in which a permissive aggregation group to which the
Plan belongs is not top-heavy. A permissive aggregation group consists of
plans maintained by the Employer or by an Affiliate that are required to be
aggregated plus one or more plans that are not part of a required aggregation
group but that satisfy the requirements of Sections 401(a)(4) and 410 of the
Code when considered together with the required aggregation group.
(d) Top-Heavy Determination for a Group.
A required aggregation group or a permissive aggregation group is
top-heavy for a Plan Year if, as of the Determination Date, the sum of the
present value of the cumulative accrued benefits for Key Employees under all
defined benefit plans included in such group and the aggregate of the accounts
of Key Employees under all defined contribution plans included in such group
exceeds sixty percent (60%) of a similar sum determined for all participants in
such plans under Section 416(g) of the Code.
10.3 Top-Heavy Contingent Provisions.
If the Plan is top-heavy for a Plan Year, as defined in Section 10.2,
the following Plan provisions shall apply for that Plan Year:
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(a) The combined Contributions (excluding 401(k) and Rollover
Contributions) under the Plan and any other defined contribution plan of the
Employer for the Plan Year for each Participant who is not a Key Employee,
expressed as a percentage of Compensation, shall be not less than the lesser of
3 percent or the largest percentage calculated for any Key Employee. For
purposes of the minimum contributions set forth in the preceding sentence, the
percentage allocated to the Account of any Key Employee shall be equal to the
ratio of the sum of the Contributions (excluding Rollover Contributions) and
Forfeitures allocated on behalf of such Key Employee divided by the Compensation
for such Key Employee. For any Top Heavy Plan Year, the minimum Contributions as
determined above shall be allocated to the Accounts of all Non-Key Employees who
are Participants and who are employed by the Employer on the last day of the
Plan Year, including Non-Key Employees who have failed to complete a Year of
Service. In lieu of the above, if a Non-Key Employee participates in this Plan
and a defined benefit pension plan included in a Required Aggregation Group
which is top heavy, a minimum allocation of five percent (5%) of Compensation
shall be provided under this Plan.
(b) Section 4.6 shall be applied after substituting "1.0" for "1.25"
in the definitions of defined benefit plan fraction and defined contribution
plan fraction.
(c) The following schedule shall be substituted for the vesting
schedule in Section 5.1:
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Years of Service Vested Percentage
less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
The vested percentage of the Participant's Account for any Plan Year for which
the Plan is top-heavy shall never be reduced in any subsequent Plan Year without
regard to whether this Article applies to such Plan Year. In any Plan Year in
which the Plan's top-heavy status changes, each Participant with three (3) or
more years of vesting service may elect to have the provisions of either this
Section or Section 5.1 apply to determine the vested percentage of his Account.
Article XI
PLAN LOANS
11.1 Loans to Participants.
Upon the written application of a Participant, and subject to the
terms of this Section, the Plan may lend to such Participant an amount from the
Participant's Account, as requested by the Participant. Loans shall be made
available to all Participants who are actively employed by the Employer. A
Participant may not have more than two (2) loans from the Plan outstanding at
any time.
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11.2 Limitations.
(a) Subject to the limitations set forth below, a Participant may
borrow up to 50% of the balance of his 401(k) Account. Effective as of August
1, 1994 and subject to the limitations set forth below, a Participant may borrow
up to 50% of the combined balance of his 401(k) and Rollover Accounts.
(b) The amount of a loan (when added to the outstanding balance of all
other loans from the Plan) shall not exceed the lesser of (i) $50,000, reduced
by the excess of the Participant's highest outstanding loan balance from the
Plan during the one year period immediately preceding the date of a new loan
over the Participant's outstanding loan balance on such date or (ii) one-half
(1/2) the value of the Participant's vested Account balance.
11.3 Approval of Loans.
(a) Application by a Participant for a loan shall be in writing on a
form prescribed by the Administrator and shall be submitted to the Administrator
for review. The application shall set forth facts establishing to the
satisfaction of the Administrator that the Participant is credit-worthy and has
the means and ability to repay the loan according to its terms. Approval of the
application shall be made by the Administrator. A Participant shall be
obligated to execute a promissory note and a payroll withholding form before
receiving the loan proceeds.
(b) If the Administrator approves the loan, it shall direct the
Trustee to establish a special loan account by liquidating a portion of the
investments in the Participant's Account in the amount of the loan. Each loan
shall be secured by an amount in the Participant's Account equal to the amount
of the loan, but not greater than fifty percent (50%) of the borrower's entire
right, title and interest in his vested Account balance. In order for any
portion of the Accrued Benefit as of December 31, 1994 to be used as
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security for a loan, the spousal consent requirements of Section 6.2(b)(ii)
must be satisfied within the 90-day period ending on the date on which the loan
is to be secured.
(c) The Administrator shall make loans available to all Participants
on a reasonably equivalent basis, considering their credit-worthiness, but
without regard to the age, sex, race, color, religion or national origin of any
Participant.
11.4 Interest Rate.
Each loan agreement shall provide for the payment of a
reasonable rate of interest; such interest to be fixed by the Administrator at
an annual percentage rate equal to one percentage point plus the prime rate
charged, on the date the loan is made, by large United States money center
commercial banks as published in The Wall Street Journal. The Administrator
shall not unreasonably discriminate among Participants in the matter of interest
rates.
11.5 Repayment.
The repayment of any loan granted pursuant to this Section
shall be in accordance with the terms and conditions determined by the
Administrator; provided, every loan shall be repaid in substantially level
periodic installments of principal and interest, payable not less frequently
than quarterly over the term thereof. The term of a loan shall not exceed five
(5) years, unless such loan is for the purpose of acquiring the Participant's
principal residence, in which case the loan may be for any reasonable period of
time determined by the Administrator. A Participant may request a suspension of
repayment for a period of time not to exceed one year. Any such suspension,
however, shall not extend the maximum five (5) year term of the loan, if
applicable.
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11.6 Default.
A loan granted under this Plan that is not repaid shall be
deemed to be in default upon the earlier of (a) 60 days after the date the
Participant retires or terminates employment, (b) the Participant's failure to
make payment on the loan as due, to the extent such failure causes the loan to
fail to satisfy the requirements of Section 11.5, or (c) in the case of death
while employed, within a reasonable time established by the Administrator. At
the time of such default, the Administrator shall foreclose on the loan and
deduct any outstanding balance plus accrued interest from the Participant's
Account balances immediately prior to distribution.
11.7 Other Rules.
All loans shall be subject to such further rules and regulations as
the Administrator shall from time to time prescribe and administer in a
non-discriminatory manner.
Article XII
AMENDMENT, TERMINATION, AND MERGERS
12.1 Amendment.
The Plan Sponsor shall have the right at any time to amend the Plan by
action of the Administrator as set forth in Section 9.2 or by action of the
Board of Directors. However, no such amendment shall authorize or permit any
part of the Trust Fund (other than such part as is required to pay taxes and
administration expenses) to be used for or diverted to purposes other than for
the exclusive benefit of the Participants or their Beneficiaries; and no such
amendment shall cause any reduction in the amount credited to the Account of any
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Participant or cause or permit any portion of the Trust Fund to revert to or
become the property of the Employer.
12.2 Termination.
(a) A Participating Employer may elect to cease its participation in
the Plan at any time by providing notice to the Plan Sponsor.
(b) The Plan Sponsor shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of such
termination. A complete discontinuance of the Contributions to the Plan shall be
deemed to constitute a termination. Upon any termination (full or partial) or
complete discontinuance of contributions, and all unallocated amounts shall be
allocated to the Accounts of all Participants in accordance with the provisions
hereof and all amounts credited to the affected Participants' Accounts shall
become 100% vested. Upon such termination of the Plan, the Plan Sponsor, by
written notice to the Trustee and Administrator, may direct either:
(i) a complete distribution of the assets in the Trust Fund to the
Participants; or
(ii) continuation of the Trust and the distribution of benefits
at such time and in such manner as though the Plan had not been terminated.
12.3 Merger or Consolidation.
This Plan and/or the Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to, any other tax-qualified plan
and its associated trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately
after such transfer, merger or consolidation, are at least equal to the
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benefits the Participant would have received if the Plan had terminated
immediately before the transfer, merger or consolidation.
Article XIII
MISCELLANEOUS
13.1 Valuation.
(a) The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the Administrator,
each such date herein called a "Valuation Date", to determine the net worth of
the assets comprising the Trust Fund as it exists on such Valuation Date prior
to taking into consideration any Contributions to be allocated for that Plan
Year. In determining such net worth, the Trustee shall value the assets
comprising the Trust Fund at their fair market value as of the Valuation Date
and shall deduct all expenses for which the Trustee is entitled to but has not
yet obtained reimbursement from the Employer or the Trust Fund.
(b) In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they were traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
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banker. In determining the fair market value of assets other than securities
for which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
13.2 Participant's Rights.
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at will at any time, and for any reason,
with or without cause, regardless of the effect which such discharge shall have
upon him as a Participant of this Plan.
13.3 Alienation.
(a) Subject to the exceptions provided below, no benefit which shall
be payable out of the Trust Fund to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the
same shall be void; and no such benefit shall in any manner be liable for, or
subject to, the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or against
such person, and the same shall not be recognized by the Trustee, except to such
extent as may be required by law.
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(b) This Section 13.3 shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision hereof.
At the time a distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount distributed as shall equal
such indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply against or
discharge such indebtedness. Prior to making such a payment, however, the
Participant or Beneficiary must be given written notice by the Administrator
that such indebtedness is to be so paid in whole or part from his Account. If
the Participant or Beneficiary does not agree that the indebtedness is a valid
claim against his vested Account, he shall be entitled to a review of the
validity of the claim in accordance with procedures provided in Sections 9.8 and
9.9.
(c) This provision shall not apply to a "qualified domestic relations
order" defined in Code Section 414(p), and those other domestic relations orders
permitted to be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders.
13.4 Construction.
This Plan shall be construed and enforced according to ERISA and the
laws of the State of New York, other than its laws respecting choice or
conflicts of law, to the extent not pre-empted by ERISA.
13.5 Gender and Number.
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
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herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
13.6 Legal Action and Indemnification.
(a) In the event any claim, suit or proceeding is brought regarding
the Trust and/or Plan to which any member of the Employer's Board of Directors,
the Administrator or any officer or Employee of the Employer may be a party in
connection with such persons' duties and responsibilities under this Plan or the
Trust and such claim, suit or proceeding is resolved in favor of such person, he
shall be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which he shall have become liable.
(b) The Administrator may from time to time request the advice of
counsel, who may be counsel to the Employer, on any legal matter, including the
interpretation of this Plan or the Trust, and shall be indemnified and held
harmless by the Employer in acting on such advice.
(c) The Employer shall indemnify each member of its Board of
Directors, the Administrator, and each officer and Employee of the Employer for
any liability, loss, expense, assessment or other cost of any kind or
description whatsoever as and when incurred, including legal fees and expenses,
which (a) are actually incurred by any such person as a result of the duties and
responsibilities allocated to such person under this Plan and (b) are not
attributable to such person's own gross negligence, willful misconduct or lack
of good faith.
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13.7 Prohibition Against Diversion of Funds.
(a) Except as provided below and otherwise specifically permitted by
law, it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the happening of
any contingency, by collateral arrangement or by any other means, for any part
of the corpus or income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Former Participants, or their
Beneficiaries.
(b) In the event the Employer shall make any Contributions under a
mistake of fact pursuant to Section 403(c)(2)(A) of ERISA, the Employer shall
demand repayment of such Contributions at any time within one (1) year following
the time of payment and the Trustee shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to such
Contributions may not be returned to the Employer but any losses attributable
thereto must reduce the amount so returned.
13.8 Bonding.
Every fiduciary (as that term is defined under Section 3(21) of
ERISA), except a bank or an insurance company, unless exempted by ERISA and
regulations thereunder, shall be bonded in an amount not less than 10% of the
amount of the funds such fiduciary handles; provided, however, that the minimum
bond shall be $1,000 and the maximum bond, $500,000. The amount of funds
handled shall be determined at the beginning of each Plan Year by the amount of
funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
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then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as
such term is used in Section 412(a)(2) of ERISA), and the bond shall be in a
form approved by the Secretary of Labor. Notwithstanding anything to the
contrary herein, the cost of such bonds shall be an expense of and may, at the
election of the Administrator, be paid from the Trust Fund or by the Employer.
13.9 Receipt and Release for Payments.
Any payment to any Participant, his legal representative, Beneficiary,
or to any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of this Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Employer, who may require
such Participant, legal representative, Beneficiary, guardian or committee, as a
condition precedent to such payment, to execute a receipt and release thereof in
such form as shall be determined by the Employer.
13.10 Action by the Employer.
Whenever the Employer under the terms hereof is permitted or required
to do or perform any act, matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
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13.11 Named Fiduciaries and Allocation of Responsibility.
The "Named Fiduciaries" of this Plan are (a) the Plan Sponsor, (b)
the Administrator, and (c) any Investment Manager appointed hereunder. The
Named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Plan Sponsor shall have the sole responsibility for formulating
the Plan's funding policy and method; and amending or terminating, in whole or
in part, this Plan. The Administrator shall have the sole responsibility for
the administration of the Plan which responsibility is specifically described
herein. The Trustee shall have the sole responsibility of management of the
assets held under the Trust in accordance with the terms thereof, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan or the Trust. Each Named Fiduciary
warrants that any directions given, information furnished, or action taken by it
shall be in accordance with the provisions of the Plan, authorizing or providing
for such direction, information or action. Furthermore, each Named Fiduciary
may rely upon any such direction, information or action of another Named
Fiduciary as being proper under the Plan, and is not required to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each Named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations hereunder. No Named
Fiduciary shall guarantee the Trust Fund in any manner against investment loss
or depreciation in asset value. Any person or group may serve in more than one
fiduciary capacity.
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13.12 Headings.
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
13.13 Approval by Internal Revenue Service.
Notwithstanding any provisions to the contrary, any Contribution by
the Employer to the Trust Fund is conditioned upon the deductibility of the
Contributions by the Employer under the Code and, to the extent any such
deduction is disallowed, the Employer shall within one (1) year following a
final determination of the disallowance, whether by agreement with the Internal
Revenue Service or by final decision of a court of competent jurisdiction,
request repayment of the amount of such non-deductible Contribution and the
Trustee shall return such amount within one (1) year following the disallowance.
Earnings of the Plan attributable to the non-deductible Contributions may not be
returned to the Employer, but any losses attributable thereto must reduce the
amount so returned.
13.14 Uniformity.
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
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IN WITNESS WHEREOF, this Plan is adopted in accordance with IRS
Announcement 94-136; this Plan is intended to satisfy the applicable
requirements of the Tax Reform Act of 1986 and its adoption is conditioned upon
the receipt of a determination by the Internal Revenue Service that the adoption
hereof will not adversely affect the continued qualification of the Plan under
Sections 401(a) and 501(a) of the Internal Revenue Code of 1986.
CMP MEDIA, INC.
By:
Michael Leeds
President
ATTEST:
Assistant Secretary
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APPENDIX A
Participating Affiliates of
CMP Media, Inc.
Effective as of the Effective Date, the following Affiliates of CMP Media,
Inc. participate in the Plan:
CMP Publications International Corp.
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