<PAGE>
As filed with the Securities and Exchange Commission on August 7, 1998
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------
BIG FLOWER HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-376-8322
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3 EAST 54TH STREET 10022
NEW YORK, NEW YORK (Zip Code)
(Address of principal executive offices)
WEBCRAFT EMPLOYEE SAVINGS TRUST
WEBCRAFT, INC. EMPLOYEES ACCUMULATED SAVINGS TRUST
(Full title of the plans)
MARK A. ANGELSON, ESQUIRE
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
OF THE BOARD OF DIRECTORS
BIG FLOWER HOLDINGS, INC.
3 EAST 54TH STREET
NEW YORK, NEW YORK 10022
(212) 521-1600
(Name, address, and telephone number,
including area code, of agent for service)
--------------------------------
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate
Securities to be to be Price Per Offering Amount of
Registered Registered (1) Share (2) Price (2) Registration Fee
- --------------------------------------------------------------------------------
Common Stock, 500,000 shares $29.50 $14,750,000 $4,352.00
$.01 par value
Rights to purchase (3) (3) (3) (3)
Series A Junior
Preferred Stock,
$.01 par value
================================================================================
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Webcraft Employee
Savings Trust (the "EAST Plan") and the Webcraft, Inc. Employees
Accumulated Savings Trust (the "WEST Plan"), collectively the "Plans",
described herein.
(2) Estimated solely for the purpose of calculating the registration fee
and, pursuant to Rule 457(h) under the Securities Act of 1933, based
upon the average of the high and low sale prices of the Common Stock
reported on the New York Stock Exchange on August 3, 1998.
<PAGE>
(3) The rights to purchase Series A Junior Preferred Stock initially are
attached to and trade with the shares of Common Stock being registered
hereby. Value attributable to such Rights, if any, is reflected in
the market price of the Common Stock.
================================================================================
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by the Registrant with the Securities and
Exchange Commission (the "Commission") are incorporated by reference and made a
part hereof, except as superseded or modified herein:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 filed with the Commission on March 26, 1998, as amended by
Form 10-K/A filed with the Commission on June 29, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the three
months ended March 31, 1998 and a Current Report on Form 8-K filed with the
Commission on March 27, 1998, as amended by Form 8-K/A filed with the
Commission on May 26, 1998; and
(c) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A filed with the Commission
pursuant to Section 12 of the Securities Exchange Act of 1934 (the "Exchange
Act") on November 14, 1995 (as amended on Form 8-A/A filed on November 29, 1995,
describing the Registrant's Preferred Stock Purchase Rights), and any amendment
or report filed for the purpose of updating such description.
All documents filed by the Registrant or the Plans pursuant to Sections
13(a), 13(c), 14 or 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, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of such
corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner such person 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 such person's conduct was
unlawful. A Delaware corporation may indemnify directors, officers, employees
and other agents of such corporation in an action by or in the right of the
corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the person to be indemnified has been
adjudged to be liable to the corporation. Where a director, officer, employee
or agent of the corporation is successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to above or in defense of any
claim, issue or matter therein, the corporation must indemnify such person
against the expenses (including attorneys' fees) which he or she actually and
reasonably incurred in connection therewith.
<PAGE>
The Registrant's Amended and Restated By-laws contain provisions that
provide for indemnification of officers and directors and their heirs and
distributees to the fullest extent permitted by, and in the manner permissible
under, the General Corporation Law of the State of Delaware.
As permitted by Section 102(b)(7) of the General Corporation Law of the
State of Delaware, the Registrant's Restated Certificate of Incorporation
contains a provision eliminating the personal liability of a director to the
Registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director, subject to certain exceptions.
The Registrant maintains policies insuring its officers and directors
against certain civil liabilities, including liabilities under the Securities
Act.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- --------- -----------
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.2 Certificate of Designation, Preferences and Rights of
Series A Junior Preferred Stock of the Registrant
(incorporated by reference to Exhibit 4.4 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.3 Rights Agreement, dated as of November 28, 1995,
between the Registrant and The Bank of New York, as
rights agent (incorporated by reference to Exhibit 4.5
of the Registrant's Registration Statement on Form S-8
(No. 333-2152) filed November 4, 1997).
4.4 Amended and Restated Bylaws of the Registrant
(incorporated by reference to Exhibit 4.2 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.5 Amended and Restated Webcraft Employee Savings Trust,
effective as of August 7, 1998.
4.6 Webcraft Technologies, Inc. Employees Accumulated
Savings Trust, dated February 29, 1996.
4.7 First Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, dated
November 6, 1996.
4.8 Second Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, dated
June 4, 1998.
4.9 Third Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, effective as of
August 7, 1998.
5 Opinion of Sidley & Austin.
23.1 Consent of Deloitte & Touche, LLP.
II-3
<PAGE>
23.2 Consent of Sidley & Austin (contained in Exhibit 5
hereof).
24 Powers of Attorney.
The Registrant hereby undertakes that the Registrant will submit or has
submitted the Plans and any amendments thereto to the Internal Revenue Service
("IRS") in a timely manner and has made or will make all changes required by the
IRS in order to qualify the Plans under the Internal Revenue Code of 1986, as
amended.
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:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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 of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
of 1933 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 of 1933 and will be governed by the final adjudication of such issue.
II-4
<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 the City of New York, State of New York, on this 7th day of
August, 1998.
BIG FLOWER HOLDINGS, INC.
By: /s/ R. THEODORE AMMON
--------------------------------
R. Theodore Ammon
Chairman of the Board
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Signature Title Date
/s/ R. THEODORE AMMON
- --------------------------- Chairman of the Board August 7, 1998
R. Theodore Ammon and Director
/S/ EDWARD T. REILLY
- --------------------------- President, Chief Executive August 7, 1998
Edward T. Reilly Officer and Director
*
- --------------------------- Executive Vice President August 7, 1998
Richard L. Ritchie and Chief Financial Officer
(Principal Financial and
Accounting Officer)
*
- --------------------------- Director August 7, 1998
Peter G. Diamandis
*
- --------------------------- Director August 7, 1998
Robert M. Kimmitt
*
- --------------------------- Director August 7, 1998
Joan D. Manley
*
- --------------------------- Director August 7, 1998
Newton N. Minow
*By: /s/ EDWARD T. REILLY
-----------------------------------------
(Edward T. Reilly, Attorney-in-fact**)
- --------------------
** By authority of Powers of Attorney filed with this Registration Statement
on Form S-8
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the Webcraft Employee Savings Trust) have duly
caused this registration statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in the City of Lawrenceville, State of
New Jersey, on this 7th day of August, 1998.
WEBCRAFT EMPLOYEE SAVINGS TRUST
By: /s/ WILLIAM S. HOUGH
------------------------------------
William S. Hough
Webcraft , Inc. Retirement Committee
II-7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the Webcraft Technologies, Inc. Employee
Accumulated Savings Trust) have duly caused this registration statement to be
signed on their behalf by the undersigned, thereunto duly authorized, in the
City of Lawrenceville, State of New Jersey, on this 7th day of August, 1998.
WEBCRAFT, INC. EMPLOYEES ACCUMULATED SAVINGS TRUST
By: /s/ WILLIAM S. HOUGH
------------------------------------
William S. Hough
Webcraft , Inc. Retirement Committee
II-8
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- --------- -----------
4.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.2 Certificate of Designation, Preferences and Rights of
Series A Junior Preferred Stock of the Registrant
(incorporated by reference to Exhibit 4.4 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.3 Rights Agreement, dated as of November 28, 1995, between
the Registrant and The Bank of New York, as rights agent
(incorporated by reference to Exhibit 4.5 of the
Registrant's Registration Statement on Form S-8 (No.
333-2152) filed November 4, 1997).
4.4 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 4.2 of the Registrant's Registration
Statement on Form S-8 (No. 333-2152) filed November 4,
1997).
4.5 Amended and Restated Webcraft Employee Savings Trust,
effective as of August 7, 1998.
4.6 Webcraft Technologies, Inc. Employees Accumulated Savings
Trust, dated February 29, 1996.
4.7 First Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, dated
November 6, 1996.
4.8 Second Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, dated June 4, 1998.
4.9 Third Amendment to the Webcraft Technologies, Inc.
Employees Accumulated Savings Trust, effective as of
August 7, 1998.
5 Opinion of Sidley & Austin.
23.1 Consent of Deloitte & Touche, LLP.
23.2 Consent of Sidley & Austin (contained in Exhibit 5 hereof).
24 Powers of Attorney.
II-9
<PAGE>
Exhibit 4.5
WEBCRAFT EMPLOYEE SAVINGS TRUST
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
<TABLE>
<S> <C> <C>
2.1 TOP HEAVY PLAN REQUIREMENTS....................................14
2.2 DETERMINATION OF TOP HEAVY STATUS..............................14
2.3 POWERS AND RESPONSIBILITIES OF THE COMPANY.....................18
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY........................18
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES..................18
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR.........................19
2.7 RECORDS AND REPORTS............................................20
2.8 APPOINTMENT OF ADVISERS........................................20
2.9 INFORMATION FROM EMPLOYER......................................20
2.10 PAYMENT OF EXPENSES............................................20
2.11 MAJORITY ACTIONS...............................................21
2.12 CLAIMS PROCEDURE...............................................21
2.13 CLAIMS REVIEW PROCEDURE........................................21
</TABLE>
ARTICLE III
ELIGIBILITY
<TABLE>
<S> <C> <C>
3.1 CONDITIONS OF ELIGIBILITY......................................22
3.2 APPLICATION FOR PARTICIPATION..................................22
3.3 EFFECTIVE DATE OF PARTICIPATION................................22
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
3.4 DETERMINATION OF ELIGIBILITY...................................22
3.5 TERMINATION OF ELIGIBILITY.....................................23
3.6 OMISSION OF ELIGIBLE EMPLOYEE..................................23
3.7 INCLUSION OF INELIGIBLE EMPLOYEE...............................24
3.8 ELECTION NOT TO PARTICIPATE....................................24
</TABLE>
ARTICLE IV
CONTRIBUTION AND ALLOCATION
<TABLE>
<S> <C> <C>
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION................24
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION........................25
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION.....................29
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS........................29
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS...............................34
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS.................36
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS...........................39
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.............41
4.9 MAXIMUM ANNUAL ADDITIONS.......................................44
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS......................49
4.11 TRANSFERS FROM QUALIFIED PLANS.................................50
4.12 VOLUNTARY CONTRIBUTIONS........................................52
4.13 DIRECTED INVESTMENT ACCOUNT....................................53
</TABLE>
ii
<PAGE>
ARTICLE V
VALUATIONS
<TABLE>
<S> <C> <C>
5.1 VALUATION OF THE TRUST FUND....................................54
5.2 METHOD OF VALUATION............................................54
</TABLE>
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
<TABLE>
<S> <C> <C>
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT......................54
6.2 DETERMINATION OF BENEFITS UPON DEATH...........................55
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY...............56
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.....................56
6.5 DISTRIBUTION OF BENEFITS.......................................59
6.6 DISTRIBUTION OF BENEFITS UPON DEATH............................63
6.7 TIME OF SEGREGATION OR DISTRIBUTION............................64
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.............................65
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY ........................65
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP..............................65
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION................67
6.12 DIRECT ROLLOVER................................................67
6.13 TRANSFER OF INTEREST...........................................69
</TABLE>
iii
<PAGE>
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
<TABLE>
<S> <C> <C>
7.1 AMENDMENT......................................................69
7.2 TERMINATION....................................................70
7.3 MERGER OR CONSOLIDATION........................................70
7.4 LOANS TO PARTICIPANTS..........................................70
</TABLE>
ARTICLE VIII
MISCELLANEOUS
<TABLE>
<S> <C> <C>
8.1 PARTICIPANT'S RIGHTS...........................................71
8.2 ALIENATION.....................................................71
8.3 CONSTRUCTION OF PLAN...........................................72
8.4 GENDER AND NUMBER..............................................72
8.5 LEGAL ACTION...................................................72
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS.........................72
8.7 BONDING........................................................73
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.....................73
8.9 RECEIPT AND RELEASE FOR PAYMENTS...............................73
8.10 ACTION BY AN EMPLOYER..........................................74
8.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.............74
8.12 HEADINGS.......................................................74
8.13 APPROVAL BY INTERNAL REVENUE SERVICE...........................74
8.14 UNIFORMITY.....................................................75
</TABLE>
iv
<PAGE>
ARTICLE IX
PARTICIPATING EMPLOYERS
<TABLE>
<S> <C> <C>
9.1 ADOPTION BY OTHER EMPLOYERS....................................75
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS........................75
9.3 DESIGNATION OF AGENT...........................................76
9.4 EMPLOYEE TRANSFERS.............................................76
9.5 DISCONTINUANCE OF PARTICIPATION................................76
9.6 ADMINISTRATOR'S AUTHORITY......................................76
</TABLE>
ARTICLE X
PARTICIPANTS' STOCKHOLDER RIGHTS
<TABLE>
<S> <C> <C>
10.1 VOTING SHARES OF THE COMMON STOCK
OF BIG FLOWER HOLDINGS, INC....................................77
10.2 TENDER OFFERS..................................................77
10.3 APPLICABILITY..................................................79
10.4 CONFIDENTIALITY................................................79
</TABLE>
v
<PAGE>
WEBCRAFT EMPLOYEE SAVINGS TRUST
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time.
1.2 "Administrator" means the Webcraft Retirement Committee, which has
been designated by the Company pursuant to Section 2.4 to administer the Plan on
behalf of the Employers.
1.3 "Affiliate" means (a) any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes an Employer; (b) any trade or business (whether or not incorporated)
under common control (as defined in Code Section 414(c)) with an Employer;
(c) any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes an
Employer, a corporation described in clause (a) of this subdivision or a trade
or business described in clause (b) of this subdivision or (d) any other entity
required to be aggregated with an Employer pursuant to Regulations under Code
Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the
value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the provisions of
Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom deceased Participant's total
account is payable, subject to the restrictions of Sections 6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code, as amended or replaced from
time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services, commissions,
bonuses and similar payments made by an Employer (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with an Employer maintaining the Plan to the extent that
the amounts are includible in gross income, except that compensation shall
exclude (a)(1) contributions made by an Employer to a plan of deferred
compensation to the extent that, the contributions are not includible in the
gross income of the Participant for the taxable year in which contributed, (2)
Employer contributions made on behalf of the Participant to a simplified
employee pension plan described in Code Section 408(k) to the extent such
contributions
1
<PAGE>
are excludable from the Participant's gross income, (3) any distributions from a
plan of deferred compensation; b) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (c) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and (d)
other amounts which receive special tax benefits, or contributions made by the
Employer (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code Section 403(b) (whether or
not the contributions are actually excludable from the gross income of the
Participant).
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding severance pay,
(b) excluding long-term incentive plan payments,
(c) including commissions and bonuses earned prior to
termination of employment but not paid until after the date of
termination, and
(d) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement which are
not includible in the gross income of the Participant under
Code Section 125, 402(e)(3)and 404(h), 403(b) or 454, and
Employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Participant's effective date of
participation pursuant to Section 3.3.
Compensation in excess of (I) $160,000 for the Plan Year
beginning January 1, 1997 and (II) for each subsequent Plan Year, the dollar
amount prescribed by Code Section 401(a)(17) (as adjusted for increases in the
cost-of-living) shall not be taken into account for any purposes under the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of Compensation has been modified, then, for Plan
Years prior to the Plan Year which includes the adoption date of this amendment
and restatement, Compensation means compensation determined pursuant to the Plan
then in effect.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
2
<PAGE>
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Elective Contribution" means an Employer's contribution to the
Plan of Deferred Compensation excluding any amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6 shall be
considered an Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the discrimination requirements of Regulation Section 1.401(k)-1(b)(5),
the provisions of which are specifically incorporated herein by reference.
1.12 "Eligible Employee" means any regular non-bargaining unit Employee
who is scheduled to work 30 hours or more a week.
1.13 "Employee" means an individual whose relationship with an Employer
is, under common law, that of an employee. Notwithstanding the foregoing, no
individual who renders services for an Employer shall be considered an Employee
for purposes to the Plan if such individual renders such services pursuant to
(i) an agreement providing that such services are to be rendered by the
individual as an independent contractor, (ii) an agreement with an entity,
including a leasing organization within the meaning of Code Section 414(n)(2),
that is not an Employer, or (iii) an agreement that contains a waiver of
participation in the Plan.
1.14 "Employer" means Webcraft, Inc. or an Affiliate which shall adopt
the Plan, any successor which shall maintain the Plan, and any predecessor which
has maintained this Plan.
1.15 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of Employer matching contributions made
pursuant to Section 4.1(b), voluntary Employee contributions made pursuant to
Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7(a).
1.16 "Excess Contributions" means, with respect to a Plan
Year, the excess of Elective Contributions made on behalf of Highly
Compensated Participants for the Plan Year over the maximum amount
of such contributions permitted under Section 4.5(a). Excess
3
<PAGE>
Contributions, including amounts recharacterized pursuant to Section 4.6(a)(2),
shall be treated as an "annual addition" pursuant to Section 4.9(b).
1.17 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4(g), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.18 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Company, and the Administrator.
1.19 "Fiscal Year" means the Company's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.20 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested
portion of a Terminated Participant's Account, and
(b) the last day of the Plan Year in which the
Participant incurs five (5) consecutive 1-Year Breaks in
Service.
Furthermore, for purposes of paragraph (a) above, in the case
of a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. Restoration of such amounts shall
occur pursuant to
4
<PAGE>
Section 6.4(f)(2). In addition, the term "Forfeiture" shall also include amounts
deemed to be a Forfeiture pursuant to any other provision of this Plan.
1.21 "Former Participant" means a person who has been a Participant,
but who has ceased to be a Participant for any reason.
1.22 "415 Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with an Employer
maintaining the Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan (as described in Regulation Section
1.62-2(c)) for a Plan Year.
"415 Compensation" shall exclude (a)(1) contributions made by
an Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
a Participant to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Participant's
gross income, (3) any distributions from a plan of deferred compensation; (b)
amounts realized from the exercise of a non-qualified stock option, or when
restricted stock (or property) held by the Participant either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (c)
amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and (d) other amounts which receive special tax
benefits, or contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of any annuity contract described in
Code Section 403(b) (whether or not the contributions are actually excludable
from the gross income of the Participant).
If, in connection with the adoption of this amendment and
restatement, the definition of "415 Compensation" has been modified, then, for
Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "415 Compensation" means compensation determined
pursuant to the Plan then in effect.
1.23 "414(s) Compensation" with respect to any Participant means such
Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)
plus "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with
5
<PAGE>
respect to any Participant shall include "414(s) Compensation" for the entire
twelve (12) month period ending on the last day of such Plan Year, except that
"414(s) Compensation" shall only be recognized for that portion of the Plan Year
during which an Employee was a Participant in the Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by an
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Section 125, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of (I) $160,000 for the Plan
Year beginning January 1, 1997 and (II), for each subsequent Plan Year, the
dollar amount prescribed by Section 401(a)(17) of the Code (as adjusted for
increases in the cost of living) shall not be taken into account for any
purposes under the Plan.
If, in connection with the adoption of this amendment and
restatement, the definition of "414(s) Compensation" has been modified, then,
for Plan Years prior to the Plan Year which includes the adoption date of this
amendment and restatement, "414(s) Compensation" means compensation determined
pursuant to the Plan then in effect.
1.24 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for an Employer during the "determination year" and is in
one or more of the following groups:
(a) Employees who at any time during the
"determination year" or "look-back year" were "five percent
owners" as defined in Section 1.29(c).
(b) Employees who received "415 Compensation" during
the "look-back year" from an Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during
the "look-back year" from an Employer in excess of $50,000 and
were in the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were
officers (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415
Compensation" during the "look-back year" greater than 50
percent of the limit in effect under Code Section 415(b)(1)(A)
for any such Plan Year. The number of
6
<PAGE>
officers shall be limited to the lesser of (i) 50 employees;
and (ii) the greater of 3 employees or 10 percent of all
employees. For the purpose of determining the number of
officers, Employees described in Section 1.51(a), (b), (c) and
(d) shall be excluded, but such Employees shall still be
considered for the purpose of identifying the particular
Employees who are officers. If there is not at least one
officer whose annual "415 Compensation" is in excess of 50
percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer will be treated as a Highly Compensated
Employee.
(e) Employees who are in the group consisting of the
100 Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d)
above when these paragraph are modified to substitute
"determination year" for "look-back year."
The "determination year" shall be the Plan Year for which
testing is being performed. The "look-back year" shall be the calendar year
ending with or within the Plan Year for which testing is being performed, and
the "determination year" (if applicable) shall be the period of time, if any,
which extends beyond the "look-back year" and ends on the last day of the Plan
Year for which testing is being performed (the "lag period"). If the "lag
period" is less than twelve months long, the dollar threshold amounts specified
in (b), (c) and (d) above shall be prorated based upon the number of months in
the "lag period".
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by an
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Section 123, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions. Additionally, the dollar
threshold amount specified in (b) and (c) above shall be adjusted at such time
and in such manner as is provided in Regulations. In the case of such an
adjustment, the dollar limits which shall be applied are those for the calendar
year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees.
1.25 "Highly Compensated Former Employee" means a former Employee who
had a separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of
7
<PAGE>
separation from service or in any "determination year" after attaining age 55.
Notwithstanding the foregoing, an Employee who separated from service prior to
1987 will be treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year after the
Employee attains age 55 (or the last year ending before the Employee's 55th
birthday), the Employee either received "415 Compensation" in excess of $50,000
or was a "five percent owner." For purposes of this Section, "determination
year," "415 Compensation" and "five percent owner" shall be determined in
accordance with Section 1.24. Highly Compensated Former Employees shall be
treated as Highly Compensation Employees. The method set forth in this Section
for determining who is a "Highly Compensated Former Employee" shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.26 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.27 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by an Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by an Employer (irrespective of whether the employment relationship
has terminated) for reasons other than performance of duties (such as vacation,
holidays, sickness, jury duty, disability, lay-off, military duty or leave of
absence) during the applicable computation period; (3) each hour for which back
pay is awarded or agreed to by an Employer without regard to mitigation of
damages. These hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made. The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding any other provision within this Section 1.27,
in the case of any person who becomes an Employee as a result of the Company's
acquisition of assets from IMPCO, services performed for IMPCO shall be
considered services performed for the Company in determining Hours of Service
credited to such Employee under the Plan.
Effective July 1, 1998 and notwithstanding any other provision
within this Section 1.27, in the case of any person who becomes an Employee as a
result of the Company's acquisition of membership units of ColorStream
Technologies, L.L.C. ("ColorStream"), services performed for ColorStream shall
be considered services performed for the Company in determining Hours of Service
credited to such Employee under the Plan.
8
<PAGE>
1.28 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(f).
1.29 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer (as that term is defined with the
meaning of the Regulations under Code Section 416) having
annual ("415 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 annual "415
Compensation" 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 Employers.
(c) a "five percent owner" of an 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 an Employer or stock
possessing more than five percent (5%) of the total combined
voting power of all stock of an 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 an
Employer. In determining percentage ownership hereunder,
employers that are aggregated under Code Section 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of an Employer having an
annual "415 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 an
Employer or stock possessing more than one percent (1%) of the
total combined voting power of all stock of an Employer or, in
the case of an unincorporated business, any person who owns
more than one percent (1%) of the capital or profits interest
in an Employer. In determining percentage ownership hereunder,
employers that are aggregated under Code Section 414(b),
9
<PAGE>
(c), (m) and (o) shall be treated as separate employers.
However, in determining the amount of an individual's "415
Compensation", "415 Compensation" from each Affiliate shall be
taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by an
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Section 125, 402(e)(3),
402(h), 403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
1.30 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.31 "Month of Service" means a calendar month during any part of which
an Employee completed an Hour of Service. Except, however, a Participant shall
be credited with a Month of Service for each month during the 12 month
computation period in which he has not incurred a 1-Year Break in Service.
1.32 "Non-Elective Contribution" means an Employer's contributions to
the Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution.
1.33 "Non-Highly Compensated Participant" means any Participant who is
not a Highly Compensated Employee.
1.34 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.35 "Normal Retirement Age" means the Participant's 65th birthday, or
his 5th anniversary of joining the Plan, if later, but in no event later than
his 55th birthday. A Participant shall become fully Vested in his Participant's
Account upon attaining his Normal Retirement Age.
1.36 "Normal Retirement Date" means the first day of the month
coinciding with or next following the Participant's Normal Retirement Age.
1.37 "1-Year Break in Service" means the applicable computation period
of 12 consecutive months during which an Employee fails to accrue a Month of
Service. 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 "authorized leaves of absence" and "maternity and paternity leaves of
absence." Years of Service and 1-Year Breaks in Service shall be measured on the
same computation period.
10
<PAGE>
An Employee shall not be deemed to have incurred a 1-Year
Break in Service if he completes an Hour of Service within 12 months following
the last day of the month during which his employment terminated.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, 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 immediately following
computation period.
1.38 "Participant" means any Eligible Employee who participates in the
Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.39 "Participant's Combined Account" means the total aggregate amount
of each Participant's Elective Account and Participant's Matching Account.
1.40 "Participant's Elective Account" means the account established and
maintained for each Participant with respect to his total interest in the Plan
and Trust resulting from the Employer's Elective Contributions. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to Elective Contributions pursuant to Section 4.2
and any Employer Qualified Non-Elective Contributions.
1.41 "Participant's Matching Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Non-Elective
Contributions.
1.42 "Plan" means this instrument, including all amendments
thereto.
1.43 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
11
<PAGE>
1.44 "Qualified Non-Elective Contribution" means an Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are
made pursuant to Section 4.8(g) which are used to satisfy the "Actual
Contribution Percentage" tests shall be considered Qualified Non-Elective
Contributions and be subject to the provisions of Sections 4.2(b) and 4.2(c).
1.45 "Regulation" means the Income Tax Regulations as promulgated by
the Secretary of the Treasury or his delegate, and as amended from time to time.
1.46 "Retired Participant" means a person who has been a Participant,
but who has become entitled to retirement benefits under the Plan.
1.47 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.48 "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.49 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.50 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.51 "Top Paid Group" means the top 20 percent of Employees who
performed services for the Employers during the applicable year, ranked
according to the amount of "415 Compensation" (determined for this purpose in
accordance with Section 1.24) received from the Employers during such year.
Employees who are non-resident aliens and who received no earned income (within
the meaning of Code Section 911(d)(2)) from an Employer constituting United
States source income within the meaning of Code Section 861(a)(3) shall not be
treated as Employees. Additionally, for the purpose of determining the number of
active Employees in any year, the following additional Employees shall also be
excluded; however, such Employees shall still be considered for the purpose of
identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of
service;
12
<PAGE>
(b) Employees who normally work less than 17 1/2
hours per week;
(c) Employees who normally work less than six (6)
months during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employers are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and an
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable.
1.52 "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 any gainful occupation and
which condition constitutes total disability under the federal Social Security
Acts.
1.53 "Trustee" means the person or entity named as trustee in a written
agreement between the Company and the person holding assets of the Plan in
trust.
1.54 "Trust Fund" means the assets of the Plan and its related trust as
the same shall exist from time to time that are held by the Trustee pursuant to
the terms of a written agreement between the Company and Trustee.
1.55 "Vested" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.56 "Voluntary Contribution Account" means the account established and
maintained for each Participant with respect to his total interest in the Plan
resulting from the Participant's nondeductible voluntary contributions made
pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions
pursuant to Section 4.6(a) shall remain subject to the limitations of Sections
4.2(b) and 4.2(c). Therefore, a separate accounting shall be maintained with
respect to that portion of the Voluntary Contribution Account attributable to
voluntary Employee contributions made pursuant to Section 4.12.
13
<PAGE>
1.57 "Year of Service" means twelve (12) consecutive Months of Service.
The computation period shall be the Plan Year.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present
Value of Accrued Benefits of Key Employees and (2) the sum of
the Aggregate Accounts of Key Employees under this Plan and
all plans of an Aggregation Group, exceeds sixty percent (60%)
of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and
all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for
any Plan Year, but such Participant was a Key Employee for any
prior Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken
into account for purposes of determining whether this Plan is
a Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a
Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time
during the five year period ending on the Determination Date,
any accrued benefit for such Participant or Former Participant
shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy Plan.
(b) Aggregate Account: A Participant's Aggregate
Account as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve
(12) month period ending on the Determination Date;
14
<PAGE>
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the
amount of any contributions actually made after the
valuation date but due on or before the Determination
Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any
contributions made after the Determination Date that
are allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year
that includes the Determination Date or within the
four (4) preceding Plan Years. However, in the case
of distributions made after the valuation date and
prior to the Determination Date, such distributions
are not included as distributions for top heavy
purposes to the extent that such distributions are
already included in the Participant's Aggregate
Account balance as of the valuation date.
Notwithstanding anything herein to the contrary, all
distributions, including distributions made prior to
January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have
been required to be included in an Aggregation Group,
will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies)
of a Participant's account balance because of death
shall be treated as a distribution for the purposes
of this paragraph.
(4) any employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax
deductible qualified voluntary employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-
to-plan transfers (ones which are both initiated by
the Employee and made from a plan maintained by one
employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan
transfers, it shall always consider such rollovers or
plan-to-plan transfers as a distribution for the
purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers,
it shall not consider such rollovers or plan-to- plan
transfers as part of the Participant's Aggregate
Account balance.
(6) with respect to related rollovers and plan-to-
plan transfers (ones either not initiated by the
15
<PAGE>
Employee or made to a plan maintained by the same
employer), if this Plan provides the rollover or
plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this
Plan is the plan accepting such rollover or plan-
to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's
Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is
accepted.
(7) For the purposes of determining whether two
employers are to be treated as the same employer in
(5) and (6) above, all employers aggregated under
Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(c) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as
hereinafter determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each plan of
the Employer in which a Key Employee is a participant
in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other
plan of the Employer which enables any plan in which
a Key Employee participates to meet the requirements
of Code Section 401(a)(4) or 410, will be required to
be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group,
each plan in the group will be considered a Top Heavy
Plan if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4)
and 410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation
Group, only a plan that is part of the Required
Aggregation Group will be considered a Top Heavy
16
<PAGE>
Plan if the Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive Aggregation
Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy
Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(d) "Determination Date" means (a) the last day of
the preceding Plan Year, or (b) in the case of the first Plan
Year, the last day of such Plan Year.
(e) Present Value of Accrued Benefit: In the case of
a defined benefit plan, the Present Value of Accrued Benefit
for a Participant other than a Key Employee, shall be as
determined using the single accrual method used for all plans
of the Employer and Affiliated Employers, or if no such single
method exists, using a method which results in benefits
accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination
of the Present Value of Accrued Benefit shall be determined as
of the most recent valuation date that falls within or ends
with the 12-month period ending on the Determination Date
except as provided in Code Section 416 and the Regulations
thereunder for the first and second plan years of a defined
benefit plan.
(f) "Top Heavy Group" means an Aggregation Group in
which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
(g) In any Plan Year commencing prior to January 1,
2000 for which the Plan is a top-heavy plan, instead of
17
<PAGE>
the provisions of clause (a)(2) of Section 4.9, the relevant
measure of a Participant's annual additions under such clause
shall be the Participant's "415 Compensation" for such
limitation year, unless for any such Plan Year (i) the
percentage of account balances of Participants who are key
employees does not exceed 90 percent (90%) and (ii) employer
contributions and forfeitures allocated to the accounts of
each Participant who is not a key employee equals at least 4
percent (4%) of such Participant's 415 Compensation.
2.3 POWERS AND RESPONSIBILITIES OF THE COMPANY
The Company shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems necessary.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Company shall appoint one or more Administrators. If
the Company appoints a committee to be an Administrator, then the
Committee shall appoint individuals to serve as the members of the
committee. Any person, including, but not limited to, the
Employees of an Employer, shall be eligible to serve as an
Administrator or a member of a committee serving as an
Administrator. Any individual so appointed shall signify his
acceptance by filing written acceptance with the Company. An
individual may resign by delivering his written resignation to the
Company or may be removed by the Company by delivery of written
notice of removal, to take effect at a date specified therein, or
upon delivery to the individual if no date is specified.
The Company, upon the resignation or removal of an
Administrator or an individual serving as a member of a committee serving as an
Administrator, shall promptly designate in writing a successor. If the Company
does not appoint an Administrator, the Company will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Company and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Company, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Company in
writing of such action and specify the responsibilities of each Administrator.
In the case of a committee serving as an Administrator, the committee members
may allocate amongst themselves or delegate to another any of their
responsibilities under the Plan.
18
<PAGE>
2.6 POWERS AND DUTIES 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
and discretion to construe the terms of the Plan and to 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 the Plan; provided, however, 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 the Act 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:
(a) the discretion to determine all questions
relating to the eligibility of Employees to participate or
remain a Participant hereunder and to receive benefits under
the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
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 for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to
be purchased from any insurer, and to designate the insurer
from which such Contract shall be purchased;
19
<PAGE>
(g) to compute and certify to the Company and to the
Trustee from time to time the sums of money necessary or
desirable to be contributed to the Plan;
(h) to prepare and implement a procedure to notify
Eligible Employees that they may elect to have a portion of
their Compensation deferred or paid to them in cash;
(i) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7 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,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator may appoint counsel, specialists, advisers,
and other persons as the Administrator deems necessary or desirable in
connection with the administration of the Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employers 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. The Administrator may rely upon such information as is supplied by
the Employers and shall have no duty or responsibility to verify such
information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employers. Such expenses shall include any expenses
incident 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. However, the Employers may reimburse the Trust Fund
for any administration expense incurred.
20
<PAGE>
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator or is a committee serves as an Administrator, the
Administrator or committee members, as the case may be, shall act by a majority
of their number, but may authorize one or more of them to sign all papers on the
Administrator(s) behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. 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.
2.13 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
2.12 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 2.12. The
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 expense 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
21
<PAGE>
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.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date of his employment with an Employer. However, any Employee
who was a Participant in the Plan prior to the effective date of this amendment
and restatement shall continue to participate in the Plan.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible
Employee shall make application to the Company for participation in the Plan and
agree to the terms hereof. Upon the acceptance of any benefits under the Plan,
such Employee shall automatically be deemed to have made application and shall
be bound by the terms and conditions of the Plan and all amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as
of the earlier of the first day of the Plan Year or the first day of the seventh
month of such Plan Year coinciding with or next following the date such Employee
met the eligibility requirements of Section 3.1, except that an Employee who was
a participant in the Webcraft, Inc. Employees Accumulated Savings Trust
immediately prior to become an Eligible Employee shall become a Participant in
the Plan on the date he becomes an Eligible Employee.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Company. Such determination shall be conclusive and binding upon all persons, as
long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review per Section 2.13.
22
<PAGE>
3.5 TERMINATION OF ELIGIBILITY
(a) In the event an Employee who is a Participant is
reclassified as an ineligible Employee, such Employee shall
continue to vest in his interest in the Plan for each Year of
Service completed while a noneligible Employee, until such
time as his Aggregate Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally,
his interest in the Plan shall continue to share in the
earnings of the Trust Fund.
(b) In the event a Participant is no longer a member
of an eligible class of Employees and becomes ineligible to
participate but has not incurred a 1-Year Break in Service, he
will participate immediately upon returning to an eligible
class of Employees. If such Participant incurs a 1-Year Break
in Service, eligibility will be determined under the break in
service rules of the Plan.
(c) If a Participant is transferred from one Employer
to another Employer or from an Employer to an Affiliate that
is not an Employer, then such transfer shall not terminate the
Participant's participation in the Plan and the Participant
shall continue to participate in the Plan until an event
occurs that would have entitled the Participant to a complete
distribution of the Participant's vested interest in his or
her accounts under the Plan had the Participant continued to
be employed by an Employer until the occurrence of such event.
Nevertheless, a Participant shall not be entitled to make
Elective Contributions (and thus receive allocations of
Matching Contributions) or rollover contributions to the Plan
during any period of employment by an Affiliate that is not an
Employer, and periods of employment with an Affiliate that is
not an Employer shall be taken into account only (i) for
purposes of determining when an individual is eligible to
participate in the Plan, (ii) for measuring Years of Service
and (iii) for purposes of determining whether a Participant
terminated or retired from employment.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
such Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the Employer would have contributed with respect to
the Employee had he not been omitted. Such contribution shall be made regardless
of whether it is deductible in whole or in part in any taxable year under
applicable provisions of the Code.
23
<PAGE>
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such incorrect inclusion is not made until after a contribution for the year has
been made, the Employer who made a contribution on behalf of such person shall
not be entitled to recover the contribution made with respect to the ineligible
person regardless of whether a deduction is allowable with respect to such
contribution. In such event, the amount contributed with respect to the
ineligible person shall constitute a Forfeiture (except for Deferred
Compensation which shall be distributed to the ineligible person) for the Plan
Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Company, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Company, in writing, at least thirty (30) days before the
beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employers shall contribute to the
Plan:
(a) The amount of the total salary reduction
elections of all Participants made pursuant to Section 4.2(a),
which amount shall be deemed an Employer's Elective
Contribution.
(b) On behalf of each Participant who is eligible to
share in matching contributions for the Plan Year, a matching
contribution equal to an amount as determined according to the
following:
(1) For Participants whose annual base salary is less
than $50,000, the Employer matching contribution
shall be equal to 25% of the Participant's Elective
Contributions to the extent the rate of such Elective
Contributions in effect from time to time does not
exceed 6% of his Compensation. For Participants whose
annual base salary equals or exceeds $50,000, there
shall be no Employer matching contribution.
24
<PAGE>
(2) During a Plan Year, the Administrator may
increase the Employer matching contribution
percentage to a percentage not exceeding 50%. Any
increase may be reduced or eliminated at any time at
the sole discretion of the Administrator.
Matching contributions made pursuant to this Section shall be
deemed an Employer's Non-Elective Contribution.
(c) Notwithstanding the foregoing, however, an
Employer's contributions for any Plan Year shall not exceed
the maximum amount allowable as a deduction to the Employer
under the provisions of Code Section 404.
(d) Except, however, to the extent necessary to
provide the top heavy minimum allocations, an Employer shall
make a contribution even if it exceeds the amount which is
deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his
Compensation which would have been received in the Plan Year,
but for the deferral election, in any whole percentage between
1% and 17%. A deferral election (or modification of an earlier
election) may not be made with respect to Compensation which
is currently available on or before the date the Participant
executed such election.
The amount by which Compensation is reduced
shall be that Participant's Deferred Compensation and be
treated as an Employer Elective Contribution and allocated to
the Participant's Elective Account.
(b) The balance in each Participant's Elective
Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) Amounts held in the Participant's Elective
Account may not be distributable earlier than:
(1) a Participant's termination of employment,
Total and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the
establishment or existence of a "successor plan," as
that term is described in Regulation Section
l.401(k)-l(d)(3);
25
<PAGE>
(4) the date of disposition by an Employer to an
entity that is not an Affiliate of substantially
all of the assets (within the meaning of Code
Section 409(d)(2)) used by the Employer in a trade or
business if the Employer continues to participate in
this Plan after the disposition if the Participant
continues employment with the entity that acquired
such assets;
(5) the date of disposition by an Employer of its
interest in a subsidiary (within the meaning of Code
Section 409(d)(3)) to an entity which is not an
Affiliate but only with respect to a Participant who
continues employment with such subsidiary; or
(6) the hardship of a Participant, subject to the
limitations of Section 6.10.
(d) For each Plan Year beginning after December 31,
1987, a Participant's Deferred Compensation made under this
Plan and all other plans, contracts or arrangements of an
Employer participating in this Plan shall not exceed, during
any taxable year of the Participant, the limitation imposed by
Code Section 402(g), as in effect at the beginning of such
taxable year. If such dollar limitation is exceeded, a
Participant will be deemed to have notified the Administrator
of such excess amount which shall be distributed in a manner
consistent with Section 4.2(f). The dollar limitation shall be
adjusted annually pursuant to the method provided in Code
Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a
hardship distribution pursuant to Regulation Section
1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by an
Employer, then such Participant shall not be permitted to
elect to have Deferred Compensation contributed to the Plan on
his behalf for a period of twelve (12) months following the
receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the
taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by
an Employer) for the taxable year of the hardship
distribution.
(f) If a Participant's Deferred Compensation under
this Plan together with any elective deferrals (as defined in
Regulation Section 1.402(g)-1(b)) under another qualified cash
or deferred arrangement (as
26
<PAGE>
defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 408(k)), a salary reduction
arrangement (within the meaning of Code Section
3121(a)(5)(D)), a deferred compensation plan under Code
Section 457, or a trust described in Code Section 501(c)(18)
cumulatively exceed the limitation imposed by Code Section
402(g) (as adjusted annually in accordance with the method
provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not
later than March 1 following the close of the Participant's
taxable year, notify the Administrator in writing of such
excess and request that his Deferred Compensation under this
Plan be reduced by an amount specified by the Participant. In
such event, the Administrator may direct the Trustee to
distribute such excess amount (and any Income allocable to
such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's
taxable year. Distributions in accordance with this paragraph
may be made for any taxable year of the Participant which
begins after December 31, 1986. Any distribution of less than
the entire amount of Excess Deferred Compensation and Income
shall be treated as a pro rata distribution of Excess Deferred
Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan
for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the
following conditions:
(1) the distribution must be made after the date
on which the Plan received the Excess Deferred
Compensation;
(2) the Participant shall designate the
distribution as Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this
Section 4.2(f) shall be made simultaneously from Deferred
Compensation and matching contributions which relate to such
Deferred Compensation provided, however, that any such
matching contributions which are not Vested shall be forfeited
in lieu of distribution.
(g) Notwithstanding Section 4.2(f) above, a
Participant's Excess Deferred Compensation shall be reduced,
but not below zero, by any distribution and/or
recharacterization of Excess Contributions pursuant to
27
<PAGE>
Section 4.6(a) for the Plan Year beginning with or within the
taxable year of the Participant.
(h) At Normal Retirement Date, or such other date
when the Participant shall be entitled to receive benefits,
the fair market value of the Participant's Elective Account
shall be used to provide additional benefits to the
Participant or his Beneficiary.
(i) All amounts allocated to a Participant's Elective
Account may be treated as a Directed Investment Account
pursuant to Section 4.13.
(j) Employer Elective Contributions made pursuant to
this Section may be segregated into a separate account for
each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 4.4 have been made.
(k) Salary reduction elections provided for herein
shall be implemented in accordance with the following:
(1) A Participant may commence making elective
deferrals to the Plan only after first satisfying the
eligibility and participation requirements specified
in Article III. However, the Participant must make
his initial salary deferral election within a
reasonable time, not to exceed thirty (30) days,
after entering the Plan pursuant to Section 3.3. If
the Participant fails to make an initial salary
deferral election within such time, then such
Participant may thereafter make an election in
accordance with the rules governing modifications. A
Participant's election shall not have retroactive
effect and shall remain in force until revoked.
(2) A Participant may modify a prior election during
the Plan Year and concurrently make a new election
with the Administrator within a reasonable time
before the pay period for which such modification is
to be effective. However, modifications to a salary
deferral election shall only be permitted
semi-annually during election periods established by
the Administrator prior to the first day of a Plan
Year and the first day of the seventh month of a Plan
Year. Any modification shall not have retroactive
effect and shall remain in force until revoked.
28
<PAGE>
(3) A Participant may elect prospectively to revoke
his salary reduction agreement in its entirety at any
time during the Plan Year by providing the
Administrator with thirty (30) days notice of such
revocation (or upon such shorter notice period as may
be acceptable to the Administrator). Such revocation
shall become effective as of the beginning of the
first pay period coincident with or next following
the expiration of the notice period. Furthermore, the
termination of the Participant's employment, or the
cessation of participation for any reason, shall be
deemed to revoke any salary reduction agreement then
in effect, effective immediately following the close
of the pay period within which such termination or
cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
An Employer shall generally pay to the Trustee its
contribution to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal income
tax return for the Fiscal Year.
However, Employer Elective Contributions accumulated through
payroll deductions shall be paid to the at the time determined by the
Administrator, but in any event within ninety (90) days from the date on which
such amounts would otherwise have been payable to the Participant in cash. The
provisions of Department of Labor Regulation Section 2510.3-102 are incorporated
herein by reference. Furthermore, any additional Employer contributions which
are allocable to the Participant's Elective Account for a Plan Year shall be
paid to the Plan no later than the twelve-month period immediately following the
close of such Plan Year.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the
Administrator shall credit as of each Anniversary Date all
amounts allocated to each such Participant as set forth
herein.
(b) Each Employer shall provide the Administrator
with all information required by the Administrator to make a
proper allocation of the Employer's contributions for each
Plan Year. Within a reasonable period of time after the date
of receipt by the Administrator of such information, the
Administrator shall allocate such contribution as follows:
29
<PAGE>
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 4.1(a), to each
Participant's Elective Account in an amount equal to
each such Participant's Deferred Compensation for the
year.
(2) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 4.l(b), to each
Participant's Matching Account in accordance
with Section 4.1(b).
(c) As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall first
be made available to reinstate previously forfeited account
balances of Former Participants, if any, in accordance with
Section 6.4(f)(2). The remaining Forfeitures, if any, shall be
used to reduce the contribution of the Employer hereunder for
the Plan Year in which such Forfeitures occur.
(d) For any Top Heavy Plan Year, Employees not
otherwise eligible to share in the allocation of contributions
as provided above, shall receive the minimum allocation
provided for in Section 4.4(g) if eligible pursuant to the
provisions of Section 4.4(i).
(e) Participants who are not actively employed on the
last day of the Plan Year due to Retirement (Normal or Late),
Total and Permanent Disability or death shall share in the
allocation of contributions for that Plan Year only if
otherwise eligible in accordance with this Section.
(f) As of each Anniversary Date or other valuation
date, after allocation of Employer contributions and after
allocation of Forfeitures, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and
Former Participant's nonsegregated accounts bear to the total
of all Participants' and Former Participants' nonsegregated
accounts as of such date.
Participants' transfers from other qualified
plans and voluntary contributions deposited in the general
Trust Fund shall share in any earnings and losses (net
appreciation or net depreciation) of the Trust Fund in the
same manner provided above. Each segregated account maintained
on behalf of a Participant shall be credited or charged with
its separate earnings and losses.
30
<PAGE>
(g) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan
Year, the sum of the Employer's contributions allocated to the
Participant's Combined Account of each Employee shall be equal
to at least three percent (3%) of such Employee's "415
Compensation" (reduced by contributions and forfeitures, if
any, allocated to each Employee in any defined contribution
plan included with this plan in a Required Aggregation Group).
However, if (1) the sum of the Employer's contributions
allocated to the Participant's Combined Account of each Key
Employee for such Top Heavy Plan Year is less than three
percent (3%) of each Key Employee's "415 Compensation" and (2)
this Plan is not required to be included in an Aggregation
Group to enable a defined benefit plan to meet the
requirements of Code Section 401(a)(4) or 410, the sum of the
Employer's contributions allocated to the Participant's
Combined Account of each Employee shall be equal to the
largest percentage allocated to the Participant's Combined
Account of any Key Employee. However, in determining whether a
Non-Key Employee has received the required minimum allocation,
such Non-Key Employee's Deferred Compensation and matching
contributions needed to satisfy the "Actual Contribution
Percentage" tests pursuant to Section 4.7(a) shall not be
taken into account.
However, no such minimum allocation shall be
required in this Plan for any Employee who participates in
another defined contribution plan subject to Code Section 412
providing such benefits included with this Plan in a Required
Aggregation Group.
(h) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined
Account of any Key Employee shall be equal to the ratio of the
sum of the Employer's contributions allocated on behalf of
such Key Employee divided by the "415 Compensation" for such
Key Employee.
(i) For any Top Heavy Plan Year, the minimum
allocations set forth above shall be allocated to the
Participant's Combined Account of all Employees who are
Participants and who are employed by the Employer on the last
day of the Plan Year, including Employees who have (1) failed
to complete a Year of Service; and (2) declined to make
mandatory contributions (if required) or, in the case of a
cash or deferred arrangement, elective contributions to the
Plan.
31
<PAGE>
(j) In lieu of the above, if an 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 "415 Compensation" shall be
provided under this Plan.
The extra minimum allocation (required by
Section 4.9(m) to provide higher limitations) will not be
provided.
(k) In addition to other applicable limitations set
forth in the Plan, and notwithstanding any other provision of
the Plan to the contrary, for Plan Years beginning on or after
January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the
OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment
in effect for a calendar year applies to any period, not
exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For Plan Years beginning on or after
January 1, 1994, any reference in this Plan to the limitation
under Code Section 401(a)(17) shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If Compensation for any prior determination
period is taken into account in determining an Employee's
benefits accruing in the current Plan Year, the Compensation
for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior
determination period. For this purpose, for determination
periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(l) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during
the Plan Year shall share in the salary reduction
contributions made by the Employer for the year of termination
without regard to the Hours of Service credited.
32
<PAGE>
(m) If a Former Participant is reemployed after five
(5) consecutive 1-Year Breaks in Service, then separate
accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
(n) Notwithstanding anything to the contrary, for
Plan Years beginning after December 31, 1989, if this is a
Plan that would otherwise fail to meet the requirements of
Code Section 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the
Regulations thereunder because Employer contributions would
not be allocated to a sufficient number or percentage of
Participants for a Plan Year, then the following rules shall
apply:
(1) The group of Participants eligible to share in
the Employer's contribution for the Plan Year shall
be expanded to include the minimum number of
Participants who would not otherwise be eligible as
are necessary to satisfy the applicable test
specified above. The specific Participants who shall
become eligible under the terms of this paragraph
shall be those who are actively employed on the last
day of the Plan Year and, when compared to similarly
situated Participants, have completed the greatest
number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the
group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be
further expanded to include the minimum number of
Participants who are not actively employed on the
last day of the Plan Year as are necessary to satisfy
the applicable test. The specific Participants who
shall become eligible to share shall be those
Participants, when compared to similarly situated
Participants, who have completed the greatest number
of Hours of Service in the Plan Year before
terminating employment.
(3) Nothing in this Section shall permit the
reduction of a Participant's accrued benefit.
Therefore any amounts that have previously been
allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the
33
<PAGE>
Employer shall make an additional contribution equal
to the amount such affected Participants would have
received had they been included in the allocations,
even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to
the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the
last day of the Plan Year.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1986, the annual allocation
derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the
following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than
the "Actual Deferral Percentage" of the Non- Highly
Compensated Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group over the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group shall not be more than
two percentage points. Additionally, the "Actual
Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of
Code Section 401(k)(3) and Regulation 1.401(k)-1(b)
are incorporated herein by reference.
However, for Plan Years beginning
after December 31, 1988, in order to prevent the
multiple use of the alternative method described in
(2) above and in Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 4.2 and to
make Employee contributions or to receive matching
contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced
pursuant to Regulation 1.401(m)-2, the provisions of
which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated
34
<PAGE>
Participant group for a Plan Year, the average of the ratios,
calculated separately for each Participant in such group, of
the amount of Employer Elective Contributions allocated to
each Participant's Elective Account for such Plan Year, to
such Participant's "414(s) Compensation" for such Plan Year.
The actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent for Plan Years beginning
after December 31, 1988. Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's
Elective Account shall be reduced by Excess Deferred
Compensation to the extent such excess amounts are made under
this Plan or any other plan maintained by an Employer.
(c) For the purposes of Sections 4.5(a) and 4.6, a
Highly Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to make a
deferral election pursuant to Section 4.2, whether or not
such deferral election was made or suspended pursuant to
Section 4.2.
(d) For the purposes of this Section, and Code
Section 401(a)(4), 410(b) and 401(k), if two or more plans
which include cash or deferred arrangements are considered one
plan for the purposes of Code Section 401(a)(4) or 410(b)
(other than Code Section 410(b)(2)(A)(ii) as in effect for
Plan Years beginning after December 31, 1988), the cash or
deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for
purposes of determining whether or not such arrangements
satisfy Code Section 401(a)(4), 410(b) and 401(k). In such a
case, the cash or deferred arrangements included in such plans
and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section
and Code Section 401(a)(4), 410(b) and 401(k). Plans may be
aggregated under this paragraph (e) for Plan Years beginning
after December 31, 1989 only if they have the same plan year.
Notwithstanding the above, for Plan Years
beginning after December 31, 1988, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
combined with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this
Section and Code Section 401(a)(4), 410(b) and 401(k).
35
<PAGE>
(e) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two or more
cash or deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan
as defined in Code Section 4975(e)(7) or 409 for Plan Years
beginning after December 31, 1988) of the Employer or an
Affiliated Employer, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement for the
purpose of determining the actual deferral ratio with respect
to such Highly Compensated Participant. However, for Plan
Years beginning after December 31, 1988, if the cash or
deferred arrangements have different plan years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a
single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions made pursuant to Section 4.4 do not satisfy one of the
tests set forth in Section 4.5(a) for Plan Years beginning after December 31,
1986, the Administrator shall adjust Excess Contributions pursuant to the
options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall
have his portion of Excess Contributions distributed to him
and/or at his election recharacterized as a voluntary Employee
contribution pursuant to Section 4.12 until one of the tests
set forth in Section 4.5(a) is satisfied, or until his actual
deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual
deferral ratio. This process shall continue until one of the
tests set forth in Section 4.5(a) is satisfied. For each
Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on behalf
of such Highly Compensated Participant (determined prior to
the application of this paragraph) minus the amount determined
by multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this
paragraph) by his "414(s) Compensation." However, in
determining the amount of Excess Contributions to be
distributed and/or recharacterized with respect to an affected
Highly Compensated Participant as determined herein, such
amount shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly
36
<PAGE>
Compensated Participant for his taxable year ending with or
within such Plan Year.
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than the
close of the Plan Year following the Plan
Year to which they are allocable;
(ii) shall be made simultaneously from
Deferred Compensation and matching
contributions which relate to such Deferred
Compensation provided, however, that any
such matching contributions which are not
Vested shall be forfeited in lieu of
distribution;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as
a distribution of Excess Contributions (and
Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such
recharacterized amounts:
(i) shall be deemed to have occurred on the
date on which the last of those Highly
Compensated Participants with Excess
Contributions to be recharacterized is
notified of the recharacterization and the
tax consequences of such recharacterization;
(ii) shall not exceed the amount of Deferred
Compensation on behalf of any Highly
Compensated Participant for any Plan Year;
(iii) shall be treated as voluntary Employee
contributions for purposes of Code Section
401(a)(4) and Regulation Section 1.401(k)-
1(b). However, for purposes of Sections 2.2
and 4.4(g), recharacterized Excess
Contributions continue to be treated as
Employer contributions that are Deferred
Compensation. For Plan Years beginning after
December 31, 1988, Excess Contributions
recharacterized as voluntary Employee
contributions shall continue to be
nonforfeitable and subject to the same
37
<PAGE>
distribution rules provided for in
Section 4.2(c);
(iv) are not permitted if the amount
recharacterized plus voluntary Employee
contributions actually made by such Highly
Compensated Participant, exceed the maximum
amount of voluntary Employee contributions
(determined prior to application of Section
4.7(a)) that such Highly Compensated
Participant is permitted to make under the
Plan in the absence of recharacterization;
and
(v) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of
less than the entire amount of Excess Contributions
shall be treated as a pro rata distribution and/or
recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess
Contributions of a Highly Compensated Participant
whose actual deferral ratio is determined under the
family aggregation rules shall be accomplished by
reducing the actual deferral ratio as required
herein, and the Excess Contributions for the family
unit shall then be allocated among the Family Members
in proportion to the Elective Contributions of each
Family Member that were combined to determine the
group actual deferral ratio. Notwithstanding the
foregoing, with respect to Plan Years beginning prior
to January 1, 1990, compliance with the Regulations
then in effect shall be deemed to be compliance with
this paragraph.
(b) Within twelve (12) months after the end of the
Plan Year, the Employer may make a special Qualified
NonElective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the
tests set forth in Section 4.5(a). Such contribution shall be
allocated to the Participant's Elective Account of each
Non-Highly Compensated Participant in the same proportion that
each Non-Highly Compensated Participant's Compensation for the
year bears to the total Compensation of all Non-Highly
Compensated Participants.
(c) If during a Plan Year the projected aggregate
amount of Elective Contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of
the tests set forth in Section 4.5(a), cause
38
<PAGE>
the Plan to fail such tests, then the Administrator may
automatically reduce proportionately or in the order provided
in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2
by an amount necessary to satisfy one of the tests set forth
in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for Plan
Years beginning after December 31, 1986 for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-
Highly Compensated Participant group; and
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group, or such
percentage for the Non-Highly Compensated Participant
group plus 2 percentage points. However, for Plan
Years beginning after December 31, 1988, to prevent
the multiple use of the alternative method described
in this paragraph and Code Section 401(m)(9)(A), any
Highly Compensated Participant eligible to make
elective deferrals pursuant to Section 4.2 or any
other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make
Employee contributions or to receive matching
contributions under this Plan or under any other plan
maintained by the Employer or an Affiliated Employer
shall have his actual contribution ratio reduced
pursuant to Regulation Section 1.401(m)-2. The
provisions of Code Section 401(m) and Regulation
Sections 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8,
"Actual Contribution Percentage" for a Plan Year means, with
respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group, the average of the
ratios (calculated separately for each
Participant in each group) of:
(1) the sum of Employer matching contributions made
pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12 and
Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a)
39
<PAGE>
on behalf of each such Participant for such Plan
Year; to
(2) the Participant's "414(s) Compensation" for such
Plan Year.
(c) For purposes of determining the "Actual
Contribution Percentage" and the amount of Excess Aggregate
Contributions pursuant to Section 4.8(d), only Employer
matching contributions (excluding Employer matching
contributions forfeited or distributed pursuant to Sections
4.2(f) and 4.6(a)(1) or forfeited pursuant to Section 4.8(a))
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees
eligible to have Employer matching contributions pursuant to
Section 4.1(b) or voluntary Employee contributions pursuant to
Section 4.12 allocated to their accounts, elective deferrals
(as defined in Regulation Section 1.402(g)- 1(b)) and
qualified non-elective contributions (as defined in Code
Section 401(m)(4)(C)) contributed to any plan maintained by an
Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching
contributions subject to Regulation Section 1.401(m)-1(b)(5)
which is incorporated herein by reference. However, for Plan
Years beginning after December 31, 1988, the Plan Year must be
the same as the plan year of the plan to which the elective
deferrals and the qualified non-elective contributions are
made.
(d) For purposes of this Section and Code Section
401(a)(4), 410(b) and 401(m), if two or more plans of the
Employer to which matching contributions, Employee
contributions, or both, are made are treated as one plan for
purposes of Code Section 401(a)(4) or 410(b) (other than the
average benefits test under Code Section 410(b)(2)(A)(ii)as in
effect for Plan Years beginning after December 31, 1988), such
plans shall be treated as one plan. In addition, two or more
plans of the Employer to which matching contributions,
Employee contributions, or both, are made may be considered as
a single plan for purposes of determining whether or not such
plans satisfy Code Section 401(a)(4), 410(b) and 401(m). In
such a case, the aggregated plans must satisfy this Section
and Code Section 401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. Plans may be aggregated
under this paragraph (e) for Plan Years beginning after
December 31, 1988, only if they have the same plan year.
40
<PAGE>
Notwithstanding the above, for Plan Years
beginning after December 31, 1988, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether
the employee stock ownership plan or this Plan satisfies this
Section and Code Section 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a
Participant under two or more plans (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7) or
409 for Plan Years beginning after December 31, 1988) which
are maintained by the Employer or an Affiliated Employer to
which matching contributions, Employee contributions, or both,
are made, all such contributions on behalf of such Highly
Compensated Participant shall be aggregated for purposes of
determining such Highly Compensated Participant's actual
contribution ratio. However, for Plan Years beginning after
December 31, 1988, if the plans have different plan years,
this paragraph shall be applied by treating all plans ending
with or within the same calendar year as a single plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant
shall include any Employee eligible to have Employer matching
contributions pursuant to Section 4.1(b) (whether or not a
deferral election was made or suspended pursuant to Section
4.2(e)) or voluntary Employee contributions pursuant to
Section 4.12 (whether or not voluntary Employee contributions
are made) allocated to his account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that, for Plan Years beginning after
December 31, 1986, the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non- Highly Compensated
Participant group pursuant to Section 4.7(a), the
Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct
the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his
Vested portion of Excess Aggregate Contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit
such non- Vested Excess Aggregate Contributions attributable
to Employer matching contributions (and Income allocable to
such forfeiture) until either one of the tests set forth
41
<PAGE>
in Section 4.7(a) is satisfied, or until his actual
contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest
actual contribution ratio. This process shall continue until
one of the tests set forth in Section 4.7(a) is satisfied. The
distribution and/or forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Voluntary Employee contributions including
Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section
4.6(a)(2);
(2) Employer matching contributions.
If the correction of Excess Aggregate
Contributions attributable to Employer matching contributions
is not in proportion to the Vested and non- Vested portion of
such contributions, then the Vested portion of the
Participant's Matching Account attributable to Employer
matching contributions after the correction shall be subject
to Section 6.5(f).
(b) Any distribution and/or forfeiture of less than
the entire amount of Excess Aggregate Contributions (and
Income) shall be treated as a pro rata distribution and/or
forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess
Aggregate Contributions (and Income). Forfeitures of Excess
Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions attributable to
amounts other than voluntary Employee contributions, including
forfeited matching contributions, shall be treated as Employer
contributions for purposes of Code Section 404 and 415 even if
distributed from the Plan.
Forfeited matching contributions that are
reallocated to Participants' Accounts for the Plan Year in
which the forfeiture occurs shall be treated as an "annual
addition" pursuant to Section 4.9(b), for the Participants to
whose Accounts they are reallocated and for the Participants
from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the
amount of Excess Aggregate Contributions is equal to the
Employer matching contributions made pursuant to Section
4.1(b), voluntary Employee contributions made pursuant to
42
<PAGE>
Section 4.12, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a)
and any qualified non-elective contributions or elective
deferrals taken into account pursuant to Section 4.7(c) on
behalf of the Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount
determined by multiplying the Highly Compensated Participant's
actual contribution ratio (determined after application of
this paragraph) by his "414(s) Compensation." The actual
contribution ratio must be rounded to the nearest
one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess
Aggregate Contribution with respect to any Highly Compensated
Participant exceed the amount of Employer matching
contributions made pursuant to Section 4.1(b), voluntary
Employee contributions made pursuant to Section 4.12, Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified
non-elective contributions or elective deferrals taken into
account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess
Aggregate Contributions with respect to any Plan Year shall be
made after first determining the Excess Contributions, if any,
to be treated as voluntary Employee contributions due to
recharacterization for the plan year of any other qualified
cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within
the Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section
4.6(a).
(f) If during a Plan Year the projected aggregate
amount of Employer matching contributions, voluntary Employee
contributions and Excess Contributions recharacterized as
voluntary Employee contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of
the tests set forth in Section 4.7(a), cause the Plan to fail
such tests, then the Administrator may automatically reduce
proportionately or in the order provided in Section 4.8(a)
each affected Highly Compensated Participant's projected share
of such contributions by an amount necessary to satisfy one of
the tests set forth in Section 4.7(a).
(g) Notwithstanding the above, within twelve (12)
months after the end of the Plan Year, the Employer may
43
<PAGE>
make a special Qualified Non-Elective Contribution on behalf
of Non-Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section 4.7(a). Such
contribution shall be allocated to the Participant's Elective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of
all Non-Highly Compensated Participants. A separate accounting
shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests
pursuant to Section 4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum
"annual additions" credited to a Participant's accounts for
any "limitation year" shall equal the lesser of:
(1) $30,000 (or, if greater, one-fourth of the dollar
limitation in effect under Code Section 415(b)(1)(A))
or (2) twenty-five percent (25%) of the Participant's
"415 Compensation" for such "limitation year." For
any short "limitation year," the dollar limitation in
(1) above shall be reduced by a fraction, the
numerator of which is the number of full months in
the short "limitation year" and the denominator of
which is twelve (12).
(b) For purposes of applying the limitations of Code
Section 415, "annual additions" means the sum credited to a
Participant's accounts for any "limitation year" of (1)
Employer contributions, (2) Employee contributions for
"limitation years" beginning after December 31, 1986, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to
an individual medical account, as defined in Code Section
415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code
Section 419(e)) maintained by the Employer. Except, however,
the "415 Compensation" percentage limitation referred to in
paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code
Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual
44
<PAGE>
addition," or (2) any amount otherwise treated as an "annual
addition" under Code Section 415(l)(1).
(c) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to
another is not an "annual addition." In addition, the
following are not Employee contributions for the purposes of
Section 4.9(b)(2): (1) rollover contributions (as defined in
Code Section 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3));
(2) repayments of loans made to a Participant from the Plan;
(3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4)
repayments of distributions received by an Employee pursuant
to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension
excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code
Section 415, the "limitation year" shall be the Plan Year.
(e) The dollar limitation under Code Section
415(b)(1)(A) stated in paragraph (a)(1) above shall be
adjusted annually as provided in Code Section 415(d) pursuant
to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to
"limitation years" ending with or within that calendar year.
(f) For the purpose of this Section, all qualified
defined benefit plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
benefit plan, and all qualified defined contribution plans
(whether terminated or not) ever maintained by the Employer
shall be treated as one defined contribution plan.
(g) For the purpose of this Section, if the Employer
is a member of a controlled group of corporations, trades or
businesses under common control (as defined by Code Section
1563(a) or Code Section 414(b) and (c) as modified by Code
Section 415(h)), is a member of an affiliated service group
(as defined by Code Section 414(m) or is a member of a group
of entities required to be aggregated pursuant to Regulations
under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
(h) For the purpose of this Section, if this Plan is
a Code Section 413(c) plan, all Employers of a
45
<PAGE>
Participant who maintain this Plan will be considered to be a
single Employer.
(i) (1) If a Participant participates in more than
one defined contribution plan maintained by the Employer which
have different Anniversary Dates, the maximum "annual
additions" under this Plan shall equal the maximum "annual
additions" for the "limitation year" minus any "annual
additions" previously credited to such Participant's accounts
during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, "annual additions" will be credited
to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior
to crediting "annual additions" to the Participant's
accounts under the defined contribution plan not
subject to Code Section 412.
(3) If a Participant participates in more than one
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, the maximum "annual additions"
under this Plan shall equal the product of (A) the
maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited
under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the
"annual additions" which would be credited to such
Participant's accounts under this Plan without regard
to the limitations of Code Section 415 and (ii) the
denominator of which is such "annual additions" for
all plans described in this subparagraph.
(j) If an Employee is (or has been) a Participant in
one or more defined benefit plans and one or more defined
contribution plans maintained by the Employer, the sum of the
defined benefit plan fraction and the defined contribution
plan fraction for any "limitation year" may not exceed 1.0.
(k) The defined benefit plan fraction for any
"limitation year" is a fraction, the numerator of which is the
sum of the Participant's projected annual benefits under all
the defined benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined
for the "limitation year"
46
<PAGE>
under Code Section 415(b) and (d) or 140 percent of the
highest average compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the
Participant was a Participant as of the first day of the first
"limitation year" beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Participant had
accrued as of the close of the last "limitation year"
beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code Section 415 for all "limitation years" beginning
before January 1, 1987.
(l) The defined contribution plan fraction for any
"limitation year" is a fraction, the numerator of which is the
sum of the annual additions to the Participant's Matching
Account under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current and
all prior "limitation years" (including the annual additions
attributable to the Participant's nondeductible Employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as
defined in Code Section 419(e), and individual medical
accounts, as defined in Code Section 415(l)(2), maintained by
the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
"limitation years" of service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any "limitation
year" is the lesser of 125 percent of the dollar limitation
determined under Code Section 415(b) and (d) in effect under
Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the
end of the first day of the first "limitation year" beginning
after December 31, 1986, in one or more defined contribution
plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the defined benefit fraction
would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an
47
<PAGE>
amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
"limitation year" beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Code Section 415
limitation applicable to the first "limitation year" beginning
on or after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not
be recomputed to treat all Employee contributions as annual
additions.
(m) Notwithstanding the foregoing, for any
"limitation year" commencing before January 1, 2000 in which
the Plan is a Top Heavy Plan, 100 percent shall be substituted
for 125 percent in Sections 4.9(k) and 4.9(l) unless the extra
minimum allocation is being provided pursuant to Section 4.4.
However, for any "limitation year" in which the percentage of
account balances of Participants who are key employees exceed
90% and employer contributions and forfeitures allocatable to
the accounts of Participants who are not key employees does
not equal at least 4% of the 415 Compensation of each such
Participant, 100 percent shall be substituted for 125 percent.
(n) If the sum of the defined benefit plan fraction
and the defined contribution plan fraction shall exceed 1.0 in
any "limitation year" for any Participant in this Plan, the
Administrator shall limit, to the extent necessary, the
"annual additions" to such Participant's accounts for such
"limitation year." If, after limiting the "annual additions"
to such Participant's accounts for the "limitation year," the
sum of the defined benefit plan fraction and the defined
contribution plan fraction still exceed 1.0, the Administrator
shall then adjust the numerator of the defined benefit plan
fraction so that the sum of both fractions shall not exceed
1.0 in any "limitation year" for such Participant.
(o) Notwithstanding anything contained in this
Section to the contrary, the limitations, adjustments and
other requirements prescribed in this Section shall at all
times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically
incorporated herein by reference.
48
<PAGE>
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in
estimating a Participant's Compensation, a reasonable error in
determining the amount of elective deferrals (within the
meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or
other facts and circumstances to which Regulation
1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to
be exceeded for any Participant, the Administrator shall (1)
distribute any elective deferrals (within the meaning of Code
Section 402(g)(3)) or return any voluntary Employee
contributions credited for the "limitation year" to the extent
that the return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining
after the return of any elective deferrals or voluntary
Employee contributions in a "Section 415 suspense account" (3)
use the "Section 415 suspense account" in the next "limitation
year" (and succeeding "limitation years" if necessary) to
reduce Employer contributions for that Participant if that
Participant is covered by the Plan as of the end of the
"limitation year," or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in
the next "limitation year" (and succeeding "limitation years"
if necessary) to all Participants in the Plan before any
Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation
year" (4) reduce Employer contributions to the Plan for such
"limitation year" by the amount of the "Section 415 suspense
account" allocated and reallocated during such "limitation
year."
(b) For purposes of this Article, "excess amount" for
any Participant for a "limitation year" shall mean the excess,
if any, of (1) the "annual additions" which would be credited
to his account under the terms of the Plan without regard to
the limitations of Code Section 415 over (2) the maximum
"annual additions" determined pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415
suspense account" shall mean an unallocated account equal to
the sum of "excess amounts" for all Participants in the Plan
during the "limitation year." The "Section 415 suspense
account" shall not share in any earnings or losses of the
Trust Fund.
49
<PAGE>
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts
may be transferred from other qualified plans by Eligible
Employees, provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer
will not jeopardize the tax exempt status of the Plan or Trust
or create adverse tax consequences for the Employer. The
amounts transferred shall be set up in a separate account
herein referred to as a "Participant's Rollover Account." Such
account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall
be held by the Trustee pursuant to the provisions of this Plan
and may not be withdrawn by, or distributed to the
Participant, in whole or in part, except as provided in
paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including
Regulation Section 1.411(d)-4), amounts attributable to
elective contributions (as defined in Regulation Section
1.401(k)-1(g)(3)), including amounts treated as elective
contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation Section
1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Participant's
Rollover Account shall be used to provide additional benefits
to the Participant or his Beneficiary. Any distributions of
amounts held in a Participant's Rollover Account shall be made
in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and
the Regulations thereunder. Furthermore, such amounts shall be
considered as part of a Participant's benefit in determining
whether an involuntary cash-out of benefits without
Participant consent may be made.
(e) The Administrator may direct that employee
transfers made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they
50
<PAGE>
may remain segregated or be invested as part of the
general Trust Fund, to be determined by the
Administrator.
(f) All amounts allocated to a Participant's Rollover
Account may be treated as a Directed Investment Account
pursuant to Section 4.13.
(g) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section
401(a). The term "amounts transferred from other qualified
plans" shall mean: (i) amounts transferred to this Plan
directly from another qualified plan; (ii) distributions from
another qualified plan which are eligible rollover
distributions and which are either transferred by the Employee
to this Plan within sixty (60) days following his receipt
thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit
individual retirement account has no assets other than assets
which (A) were previously distributed to the Employee by
another qualified plan as a lump-sum distribution (B) were
eligible for tax-free rollover to a qualified plan and (C)
were deposited in such conduit individual retirement account
within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting
the requirements of clause (iii) above, and transferred by the
Employee to this Plan within sixty (60) days of his receipt
thereof from such conduit individual retirement account.
(h) Prior to accepting any transfers 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.
(i) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the Regulations thereunder) from a
defined benefit plan, money purchase plan (including a target
benefit plan), stock bonus or profit sharing plan which would
otherwise have provided for a life annuity form of payment to
the Participant.
(j) Notwithstanding anything herein to the contrary,
a transfer directly to this Plan from another
51
<PAGE>
qualified plan (or a transaction having the effect of such a
transfer) shall only be permitted if it will not result in the
elimination or reduction of any "Section 411(d)(6) protected
benefit" as described in Section 7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the opportunity to
increase their retirement income, each Participant may elect
to contribute to the Plan on an after-tax basis a portion of
his Compensation earned while a Participant under this Plan in
any whole percentage between 1% and 17%, provided that, when
considered together with the Participant's deferral election
made pursuant to Section 4.2, such aggregate percentage does
not exceed 17%. The amount contributed shall be paid to the
Trustee within a reasonable period of time but in no event
later than ninety (90) days after the contribution is withheld
from the Participant's pay check. The balance in each
Participant's Voluntary Contribution Account attributable to
such contributions shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the
actual earnings thereon at the times determined by the
Administrator from time to time and in a manner which is
consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder. If the Administrator maintains sub-accounts with
respect to voluntary contributions (and earnings thereon)
which were made on or before a specified date, a Participant
shall be permitted to designate which sub-account shall be the
source for his withdrawal.
In the event such a withdrawal is made, or
in the event a Participant has received a hardship
distribution pursuant to Regulation Section 1.401(k)-
1(d)(2)(iv)(B) from any other plan maintained by an Employer,
then such Participant shall be barred from making any
voluntary contributions to the Trust Fund for a period of
twelve (12) months after receipt of the withdrawal or
distribution.
(c) At Normal Retirement Date, or such other date
when the Participant or his Beneficiary shall be entitled to
receive benefits, the fair market value of the Voluntary
Contribution Account shall be used to provide additional
benefits to the Participant or his Beneficiary.
52
<PAGE>
(d) The Administrator may direct that voluntary
contributions made after a valuation date be segregated into a
separate account for each Participant in a federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short
term debt security acceptable to the Trustee until such time
as the allocations pursuant to this Plan have been made, at
which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the
Administrator.
(e) All amounts allocated to a Voluntary Contribution
Account may be treated as a Directed Investment Account
pursuant to Section 4.13.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion, may
determine that all Participants be permitted to direct the
Trustee as to the investment of all or a portion of the
interest in any one or more of their individual account
balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and
applied in a uniform nondiscriminatory manner, direct the
Trustee in writing, or in such other manner designated by the
Administrator, to invest any portion of their account
permitted by the Administrator in specific assets, specific
funds or other investments permitted under the Plan and any
directed investment procedure. That portion of the account of
any Participant so directing will thereupon be considered a
Directed Investment Account, which shall not share in Trust
Fund earnings.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an
investment. Transfers between the Participant's regular
account and his Directed Investment Account shall be charged
and credited as the case may be to each account. The Directed
Investment Account shall not share in Trust Fund earnings, but
it shall be charged or credited as appropriate with the net
earnings, gains, losses and expenses as well as any
appreciation or depreciation in market value during each Plan
Year attributable to such account.
53
<PAGE>
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall determine the dates, each date herein
called "valuation date," on which the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date" shall be determined.
5.2 METHOD OF VALUATION
Except as otherwise provided in any agreement with respect to
the Trust Fund, 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 are 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 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.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Each Participant may terminate his employment with an Employer
and retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with an Employer to a
later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. The Vested balance of the Aggregate
Account of a Participant who has terminated his employment with the Employers
and Affiliates shall be distributed in accordance with Section 6.5 as soon as
practicable after the end of the Plan Year in which his Normal Retirement Date
occurs. Except as required by law, a Participant who has attained his Normal
Retirement Date and who is employed by an Employer or Affiliate shall not be
entitled to a distribution of his Vested interest in his Aggregate Account.
54
<PAGE>
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his
Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall
become fully Vested. The Administrator shall direct the
Trustee, in accordance with the provisions of Sections 6.6 and
6.7, to distribute the value of the deceased Participant's
accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute any
remaining Vested amounts credited to the accounts of a
deceased Former Participant to such Former Participant's
Beneficiary.
(c) Any security interest held by the Plan by reason
of an outstanding loan to the Participant or Former
Participant shall be taken into account in determining the
amount of the death benefit.
(d) The Administrator may require such proper proof
of death and such evidence of the right of any person to
receive payment of the value 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 of any person to receive payment shall be
conclusive.
(e) The Beneficiary of the death benefit payable
pursuant to this Section shall be the Participant's spouse.
Except, however, the Participant may designate a Beneficiary
other than his spouse if:
(1) the spouse has waived the right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and
there is no "qualified domestic relations order" as
defined in Code Section 414 (p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A
55
<PAGE>
Participant may at any time revoke his designation of a
Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However,
the Participant's spouse must again consent in writing to any
change in Beneficiary unless the original consent acknowledged
that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected
to relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the
death benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive
any rights to the death benefit must be in writing, must
acknowledge the effect of such waiver, and be witnessed by a
Plan representative or a notary public. Further, the spouse's
consent must be irrevocable and must acknowledge the specific
nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with
or subsequent to the termination of a Participant's employment
for any reason other than death, Total and Permanent
Disability or retirement, the Administrator may direct the
Trustee to segregate the amount of the Vested portion of such
Terminated Participant's Combined Account and invest the
aggregate amount thereof in a separate, federally insured
savings account, certificate of deposit, common or collective
trust fund of a bank or a deferred annuity. In the event the
Vested portion of a Participant's Combined Account is not
segregated, the amount shall remain in a separate account for
the Terminated Participant and share in allocations pursuant
to Section 4.4 until such time as a distribution is made to
the Terminated Participant.
Distribution of the funds due to a
Terminated Participant shall be made on the occurrence of an
event which would result in the distribution had the
Terminated Participant remained in the employ of an Employer
(upon
56
<PAGE>
the Participant's death, Total and Permanent Disability or
Normal Retirement). However, at the election of the
Participant, the Administrator shall direct the Trustee to
cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such
Terminated Participant. Any distribution under this paragraph
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's
Vested benefit under the Plan derived from Employer and
Employee contributions does not exceed $5,000 and has never
exceeded $5,000 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire
Vested benefit to be paid to such Participant in a single lump
sum.
(b) The Vested portion of any Participant's Matching
Account shall be a percentage of the total amount credited to
his Participant's Matching Account determined on the basis of
the Participant's number of Years of Service according to the
following schedule:
<TABLE>
<CAPTION>
Vesting Schedule
Years of Service Percentage
---------------- ----------
<S> <C>
1 25 %
2 50 %
3 75 %
4 100 %
</TABLE>
(c) Notwithstanding the vesting schedule above, the
Vested percentage of a Participant's Matching Account shall
not be less than the Vested percentage attained as of the
later of the effective date or adoption date of
this amendment and restatement.
(d) Notwithstanding the vesting schedule above, upon
the complete discontinuance of an Employer's contributions to
the Plan or upon any full or partial termination of the Plan,
all amounts credited to the account of any affected
Participant shall become 100% Vested and shall not thereafter
be subject to Forfeiture.
(e) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as
the result of any direct or indirect amendment to this Plan.
For this purpose, the
57
<PAGE>
Plan shall be treated as having been amended if the Plan
provides for an automatic change in vesting due to a change in
top heavy status. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with at
least three (3) Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule.
The Participant's election period shall commence on the
adoption date of the amendment and shall end 60 days after the
latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
(f) (1) If any Former Participant shall be reemployed
by the Employer before a 1-Year Break in Service occurs, he
shall continue to participate in the Plan in the same manner
as if such termination had not occurred.
(2) If any Former Participant shall be re-employed by
the Employer before five (5) consecutive 1-Year
Breaks in Service, and such Former participant had
received a distribution of his entire Vested interest
prior to his reemployment, his forfeited account
shall be reinstated only if he repays the full amount
distributed to him before the earlier of five (5)
years after the first date on which the Participant
is subsequently reemployed by the Employer or the
close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the
distribution. In the event the Former Participant
does repay the full amount distributed to him, the
undistributed portion of the Participant's Matching
Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the
Anniversary Date or other valuation date coinciding
with or preceding his termination. The source for
such reinstatement shall first be any Forfeitures
occurring during the. year. If such source is
insufficient, then the Employer shall contribute an
amount which is sufficient to restore any such
forfeited Accounts.
58
<PAGE>
(3) If any Former Participant is reemployed 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:
(i) If a Former Participant has a 1-Year
Break in Service, his pre-break and
post-break service shall be used for
computing Years of Service for eligibility
and for vesting purposes only after he has
been employed for one (1) Year of Service
following the date of his reemployment with
the Employer;
(ii) Any Former Participant who under the
Plan does not have a nonforfeitable right to
any interest in the Plan resulting from
Employer contributions shall lose credits
otherwise allowable under (i) above if his
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;
(iii) After five (5) consecutive 1-Year
Breaks in Service, a Former Participant's
Vested Account balance attributable to pre-
break service shall not be increased as a
result of post-break service;
(iv) If a Former Participant who has not had
his Years of Service before a 1-Year Break
in Service disregarded pursuant to (ii)
above completes one (1) Year of Service for
eligibility purposes following his
reemployment with the Employer, he shall
participate in the Plan retroactively from
his date of reemployment;
(v) If a Former Participant who has not had
his Years of Service before a 1-Year Break
in Service disregarded pursuant to (ii)
above completes a Year of Service (a 1-Year
Break in Service previously occurred, but
employment had not terminated), he shall
participate in the Plan retroactively from
the first day of the Plan Year during which
he completes one (1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election
of the Participant, shall direct the Trustee to distribute
59
<PAGE>
to a Participant or his Beneficiary any amount to which
he is entitled under the Plan in one or more of the
following methods:
(1) One lump-sum payment in cash;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments.
In order to provide such installment payments, the
Administrator may (A) segregate the aggregate amount
thereof in a separate, federally insured savings
account, certificate of deposit in a bank or savings
and loan association, money market certificate or
other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain
(with no life contingencies) providing for such
payment. The period over which such payment is to be
made shall not extend beyond the lesser of ten (10)
years or the Participant's life expectancy (or the
life expectancy of the Participant and his designated
Beneficiary).
(b) Any distribution to a Participant who has a
benefit which exceeds, or has ever exceeded, $5,000 at the
time of any prior distribution shall require such
Participant's consent if such distribution commences prior to
the later of his Normal Retirement Age or age 62. With regard
to this required consent:
(1) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of
benefits shall not apply with respect to
distributions which are required under Section
6.5(c).
(2) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and
no more than 90 days before the first day on which
all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the first day on which all events have
occurred which entitle the Participant to such
benefit.
60
<PAGE>
(4) No consent shall be valid if a significant
detriment is imposed under the Plan on any
Participant who does not consent to the distribution.
If a distribution is one to which Code
Section 401(a)(11) and 417 do not apply, such distribution may
commence less than 30 days after the notice required under
Regulation Section 1.411(a)-11(c) is given, provided that: (1)
the Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and (2) the Participant, after receiving
the notice, affirmatively elects a distribution.
(c) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits shall
be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder (including Regulation Section
1.401(a)(9)-2), the provisions of which are incorporated
herein by reference to the extent required to be applied by
law:
(1) A Participant's benefits shall be distributed to
him not later than 60 days after the end of the Plan
Year which contains the later of the Participant's
65th birthday and the date of the Participant's
termination of employment, provided, however, that in
the case of a Participant who is a "five (5) percent
owner" at any time during the five (5) Plan Year
period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant
who becomes a "five (5) percent owner" during any
subsequent Plan Year, the required beginning date of
such Participant's distribution shall be the April
1st of the calendar year following the calendar year
in which the Participant attains age 70 1/2.
Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as
determined under the preceding sentence and must be
made over a period certain measured by the life
expectancy of the Participant (or the life
expectancies of the Participant and his designated
Beneficiary) in accordance with Regulations.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with
61
<PAGE>
the incidental death benefit requirements of Code
Section 401(a)(9)(G) and the Regulations
thereunder.
Additionally, for calendar years
beginning before 1989, distributions may also be made
under an alternative method which provides that the
then present value of the payments to be made over
the period of the Participant's life expectancy
exceeds fifty percent (50%) of the then present value
of the total payments to be made to the Participant
and his Beneficiaries.
(d) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse may, at the
election of the Participant or the Participant's spouse, be
redetermined in accordance with Regulations. The election,
once made, shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last
survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation Section 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of
any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of the Plan.
(f) If a distribution is made at a time when a
Participant is not fully Vested in his Participant's Matching
Account (employment has not terminated) and the Participant
may increase the Vested percentage in such account:
(1) a separate account shall be established for
the Participant's interest in the Plan as of the
time of the distribution; and
(2) at any relevant time, the Participant's Vested
portion of the separate account shall be equal to an
amount ("X") determined by the formula:
x equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the
62
<PAGE>
account balance at the relevant time to the account
balance after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) (1) The death benefit payable pursuant to Section
6.2 shall be paid to the Participant's Beneficiary within a
reasonable time after the Participant's death by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by
his Beneficiary) subject, however, to the rules specified in
Section 6.6(b):
(i) One lump-sum payment in cash;
(ii) Payment in monthly, quarterly, semi-
annual, or annual cash installments over a
period to be determined by the Participant
or his Beneficiary. After periodic
installments commence, the Beneficiary shall
have the right to direct the Trustee to
reduce the period over which such periodic
installments shall be made, and the Trustee
shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable pursuant
to Section 6.2 is payable in installments, then, upon
the death of the Participant, the Administrator may
direct the Trustee to segregate the death benefit
into a separate account, and the Trustee shall invest
such segregated account separately, and the funds
accumulated in such account shall be used for the
payment of the installments.
(b) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall
be made in accordance with the following requirements and
shall otherwise comply with Code Section 401(a)(9) and the
Regulations thereunder. If it is determined pursuant to
Regulations that the distribution of a Participant's interest
has begun and the Participant dies before his entire interest
has been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of
his date of death. If a Participant dies before he has begun
to receive any distributions of his interest under the Plan or
before distributions are deemed to have begun pursuant to
Regulations, then his
63
<PAGE>
death benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth
anniversary of his date of death occurs.
However, the 5-year distribution requirement
of the preceding paragraph shall not apply to any portion of
the deceased Participant's interest which is payable to or for
the benefit of a designated Beneficiary. In such event, such
portion shall be distributed over a period not extending
beyond the life expectancy of such designated Beneficiary
provided such distribution begins not later than December 31st
of the calendar year immediately following the calendar year
in which the Participant died. However, in the event the
Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's
death shall not apply. In lieu thereof, distributions must
commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which
the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2.
If the surviving spouse dies before distributions to such
spouse begin, then the 5-year distribution requirement of this
Section shall apply as if the spouse was the Participant.
(c) For purposes of this Section, the life expectancy
of a Participant and a Participant's spouse may, at the
election of the Participant or the Participant's spouse, be
redetermined in accordance with Regulations. The election,
once made, shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of
the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last
survivor expectancy shall be computed using the return
multiples in Tables V and VI of Regulation Section 1.72-9.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the
Trustee is to make a distribution or to commence a series of payments on or as
of an Anniversary Date, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable. However, unless a
Former Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the
payment of benefits shall begin not later than the 60th day after the close of
the Plan Year in which the latest of the following events occurs: (a) the date
on which the Participant
64
<PAGE>
attains the earlier of age 65 or the Normal Retirement Age specified herein; (b)
the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates his
service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may 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, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the ability of the Administrator, after sending a registered
letter, return receipt requested, to the last known address, and after further
diligent effort, to ascertain the whereabouts of such Participant or his
Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the
Participant, shall direct the Trustee to distribute to any
Participant in any one Plan Year from $500.00 up to the lesser
of 100% of his Participant's Elective Account valued as of the
last Anniversary Date or other valuation date or the amount
necessary to satisfy the immediate and heavy financial need of
the Participant. Any distribution made pursuant to this
Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the Participant's
Elective Account shall be reduced accordingly. The
determination of whether an immediate and heavy financial need
exists shall be based on all relevant facts and circumstances
including, but not limited to, any amounts necessary to pay
any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution. A need
shall not be disqualified because it
65
<PAGE>
was reasonably foreseeable or voluntarily incurred.
Withdrawal under this Section shall be authorized if the
distribution is on account of:
(1) Expenses for medical care described in Code
Section 213(d) previously incurred by the
Participant, his spouse, or any of his dependents (as
defined in Code Section 152) or necessary for these
persons to obtain medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding
mortgage payments);
(3) Funeral expenses for a member of the
Participant's family;
(4) Payment of tuition and related educational fees
for the next twelve (12) months of post-secondary
education for the Participant, his spouse, children,
or dependents; or
(5) Payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) No distribution shall be made pursuant to this
Section unless the Administrator determines, based upon all
relevant facts and circumstances, that the amount to be
distributed is not in excess of the amount required to relieve
the financial need and that such need cannot be satisfied from
other resources reasonably available to the Participant. For
this purpose, the Participant's resources shall be deemed to
include those assets of his spouse and minor children that are
reasonably available to the Participant. A distribution may be
treated as necessary to satisfy a financial need if the
Administrator relies upon the Participant's representation
that the need cannot be relieved:
(1) Through reimbursement or compensation by
insurance or otherwise;
(2) By reasonable liquidation of the Participant's
assets, to the extent such liquidation could not
itself increase the amount of the need;
(3) By cessation of elective deferrals and voluntary
Employee contributions under the Plan; or
66
<PAGE>
(4) By other distributions or loans from the Plan or
any other qualified retirement plan, or by borrowing
from commercial sources on reasonable commercial
terms, to the extent such amount would not themselves
increase the amount of the need.
(c) Notwithstanding the above, for Plan Years
beginning after December 31, 1988, distributions from the
Participant's Elective Account pursuant to this Section shall
be limited, as of the date of distribution, to the
Participant's Elective Account as of the end of the last Plan
Year ending before July 1, 1989, plus the total Participant's
Deferred Compensation after such date, reduced by the amount
of any previous distributions pursuant to this Section.
(d) Any distribution made pursuant to this Section
shall be made in a manner which is consistent with and
satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code
Section 411(a)(11) and the Regulations thereunder.
(e) No distribution shall be made pursuant to this
Section unless the Participant's elective deferrals are
suspended for at least twelve (12) months from the date of
receipt of the hardship distribution.
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
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." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under he Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
6.12 DIRECT ROLLOVER
(a) This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution that is at least equal to $200 (or such other
amount determined from time to time by the Administrator) paid
directly to an eligible
67
<PAGE>
retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section the following
definitions shall apply:
(1) An eligible rollover distribution is any
distribution of all or any portion of the balance to
the credit of the distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially
equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Code Section 401(a)(9); and the
portion of any distribution that is not includible in
gross income (determined without regard to the
exclusion for net unrealized appreciation with
respect to employer securities).
(2) An eligible retirement plan is an individual
retirement account described in Code Section 408(a),
an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in
Code Section 401(a), that accepts the distributee's
eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving spouse and the Employee's or
former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are
distributees with regard to the interest of the
spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the
distributee.
68
<PAGE>
6.13 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
upon receipt of the written election of a Participant, the Administrator shall
direct the Trustee to transfer the Vested interest, if any, of such Participant
in his account to another trust forming part of a pension, profit sharing or
stock bonus plan of the Employer which meets and is represented by said employer
in writing as meeting the requirements of Code Section 401(a), provided that the
trust to which such transfers are made permits the transfer to be made; and
further provided that any such transfer shall not eliminate or reduce a benefit
protected under Code Section 411(d)(6) and is conditioned on a voluntary, fully
informed election by the Participant.
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Company shall have the right at any time to
amend the Plan. Any such amendment shall be adopted by formal
action of the Company's board of directors and executed by an
officer authorized to act on behalf of the Company. Any such
amendment shall become effective as provided therein upon its
execution. Notwithstanding the foregoing sentences of this
subsection (a), (i) the Company may delegate its right to
amend the Plan to the Administrator or other person and (ii)
an amendment may become effective on a retroactive basis, to
the extent permitted under the law.
(b) No amendment to the Plan shall be effective if it
authorizes or permits 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 any purpose other than
for the exclusive benefit of the Participants or their
Beneficiaries or estates; or causes any reduction in the
amount credited to the account of any Participant; or causes
or permits any portion of the Trust Fund to revert to or
become property of an Employer.
(c) Except as permitted by Regulations, no Plan
amendment or transaction having the effect of a Plan amendment
(such as a merger, plan transfer or similar transaction) shall
be effective to the extent it eliminates or reduces any
"Section 411(d)(6) protected benefit" or adds or modifies
conditions relating to "Section 411(d)(6) protected benefits"
the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to
69
<PAGE>
benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A),
early retirement benefits and retirement-type subsidies, and
optional forms of benefit.
7.2 TERMINATION
(a) The Company shall have the right at any time to
terminate the Plan. Upon any full or partial termination, all
amounts credited to the affected Participants' Combined
Accounts shall become 100% Vested as provided n Section 6.4
and shall not thereafter be subject to forfeiture, and all
unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the
Company shall direct the distribution of the assets of the
Trust Fund to Participants in a manner which is consistent
with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash or
through the purchase of irrevocable nontransferable deferred
commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in
the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan and 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 benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Administrator shall establish and administer
a written loan program pursuant to which any Participant who
is an Employee (or party-in-interest as required by the U.S.
Department of Labor) may request to borrow funds from the
Plan.
(b) The loan program may be modified or amended in
writing from time to time without the necessity of amending
this Section.
70
<PAGE>
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
an 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 an Employer or to interfere with the right of an Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a participant of this Plan.
8.2 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.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, as a
result of a loan from the Plan. 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
loan 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 loan indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must
be given written notice by the Administrator that such loan
indebtedness is to be so paid in whole or part from his
Participant's Combined Account. If the Participant or
Beneficiary does not agree that he loan indebtedness is a
valid claim against his Vested Participant's Combined Account,
he shall be entitled to a review of the validity of the claim
in accordance with procedures provided in Sections 2.12 and
2.13.
71
<PAGE>
(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. Further, to the
extent provided under a "qualified domestic relations order, "
a former spouse of a Participant shall be treated as the
spouse or surviving spouse for all purposes under the Plan.
8.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act
and the laws of the State of New Jersey, other than its laws respecting choice
of law, to the extent not preempted by the Act.
8.4 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 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.
8.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Plan to which the Administrator may be a party, and such claim,
suit, or proceeding is resolved in favor of the Administrator, the Administrator
(and the members of any committee serving as Administrator) 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 they shall have
become liable.
8.6 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
72
<PAGE>
Participants, Retired Participants, or their
Beneficiaries.
(b) In the event an Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such
excessive contribution at any time within one (1) year
following the time of payment and the Trustees shall return
such amount to the Employer within the one (1) year period.
Earnings of the Plan attributable to the excess contributions
may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
8.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act 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 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 Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, 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.
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither any Employer nor any successor to an Employer shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
8.9 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 the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employers, either of whom may require such Participant, legal
representative,
73
<PAGE>
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
Company.
8.10 ACTION BY AN EMPLOYER
Whenever an Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
8.11 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Company, and
(2) the Administrator. The named Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically given them
under the Plan. In general, the Company shall have the sole authority to appoint
and remove the Trustee and the Administrator; to formulate the Plan's "funding
policy and method"; and to amend or terminate, in whole or in part, the Plan.
The Administrator shall have the sole responsibility for the administration of
the Plan, which responsibility is specifically described in the Plan. 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
under the Plan. 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. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
8.12 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.
8.13 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to
the Employer within one year after such determination,
provided the application for the determination is made by the
time prescribed by law for filing the Employer's return for
the taxable year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
74
<PAGE>
(b) Notwithstanding any provisions to the contrary,
except Sections 3.6, 3.7, and 4.1(d), any contribution by an
Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the
Employer may, within one (1) year following the disallowance
of the deduction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
8.14 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE IX
PARTICIPATING EMPLOYERS
9.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the
consent of the Company, any Affiliate may adopt this Plan and all of the
provisions hereof, and participate herein and be known as a Participating
Employer, by a properly executed document evidencing said intent and will of
such Participating Employer.
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be
required to use the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions
made by Participating Employers, as well as all increments
thereof. However, the assets of the Plan shall, on an ongoing
basis, be available to pay benefits to all Participants and
Beneficiaries under the Plan without regard to the Employer or
Participating Employer who contributed such assets.
(c) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants
of the Employer by which the forfeiting Participant was
employed.
75
<PAGE>
(d) Any expenses of the Trust which are to be paid by
the Employers or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total
amount standing to the credit of all Participants employed by
such Employer bears to the total standing to the credit of all
Participants.
9.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Company as its
agent.
9.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
9.5 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue
or revoke its participation in the Plan. The Company shall direct the Trustee to
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants employed by such Participating Employer to such new trustee as
shall have been designated by such Participating Employer, in the event that it
has established a separate pension plan for its Employees, provided however,
that no such transfer shall be made if the result is the elimination or
reduction of any "Section 411(d)(6) protected benefits" in accordance with
Section 7.1(c). If no successor is designated, the Company shall direct the
Trustee to retain such assets for the Employees of said Participating Employer
pursuant to the provisions of the Trust. In no such event shall any part of the
corpus or income of the Trust as it relates to such Participating Employer be
used for or diverted to purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
9.6 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
76
<PAGE>
ARTICLE X
PARTICIPANTS' STOCKHOLDER RIGHTS
10.1 VOTING SHARES OF THE COMMON STOCK OF BIG FLOWER HOLDINGS, INC.
Pursuant to the terms of the trust agreement between the
Trustee and the Company, the Trustee shall vote, in person or by proxy, shares
of common stock of Big Flower Holdings, Inc. held by the Trustee and represented
by units which are credited to a Participant's account in accordance with
instructions timely obtained from such Participant. Each Participant shall be
entitled to give voting instructions with respect to the number of shares of
common stock of Big Flower Holdings, Inc. represented by units credited to his
account as of the valuation date coinciding with or immediately preceding the
shareholder record date for such vote. Written notice of any meeting of
stockholders of Big Flower Holdings, Inc., or other occasion for the exercise of
voting rights, and a request for voting instructions shall be given by the
Administrator or the Trustee, at such time and in such manner as the
Administrator shall determine, to each Participant entitled to give instructions
for voting shares of common stock of Big Flower Holdings, Inc. at such meeting
or occasion. The Company shall establish and pay for a means by which a
Participant can expeditiously deliver to the Administrator voting instructions
addressed to the Trustee. All shares of common stock of Big Flower Holdings,
Inc. represented by units credited to Participants' accounts for which no timely
voting instructions are received, to the extent permitted by law, shall be voted
by the Trustee in the same proportions as shares represented by units credited
to Participants' accounts for which timely instructions are received. The
Trustee, to the extent permitted by law, shall vote any shares of common stock
of Big Flower Holdings, Inc. represented by units not credited to Participants'
accounts in the same proportions as shares represented by units credited to
Participants' accounts for which timely instructions are received.
10.2 TENDER OFFERS
(a) Rights of Participants. In the event a tender or
exchange offer is made to the shareholders of Big Flower
Holdings, Inc. to transfer all or a portion of their shares of
common stock of Big Flower Holdings, Inc. in return for
valuable consideration, including but not limited to, offers
regulated by section 14(d) of the Securities Exchange Act of
1934, as amended, the Trustee shall respond to such tender or
exchange offer in respect of shares of common stock of Big
Flower Holdings, Inc. held by the Trustee which are
represented by units credited to a Participant's account in
accordance with instructions timely obtained from such
Participant. Each Participant shall be entitled to give
instructions with respect to tendering or withdrawing from
tender such
77
<PAGE>
shares. A Participant shall not be limited in the number of
instructions to tender or withdraw from tender which he can
give, but a Participant shall not have the right to give
instructions to tender or withdraw from tender after a
reasonable time established by the Trustee pursuant to
subsection (c) below. Except as otherwise required by law, the
Trustee shall not tender any shares of common stock of Big
Flower Holdings, Inc. represented by units credited to
Participants' accounts for which no timely instructions are
received. The Trustee, to the extent permitted by law, shall
respond to any such tender or exchange offer in respect of all
shares of common stock of Big Flower Holdings, Inc.
represented by units not credited to Participants' accounts in
the same proportions as shares represented by units credited
to Participants' accounts for which timely instructions are
received.
(b) Duties of the Administrator. Within a reasonable
time after the commencement of a tender or exchange offer, the
Administrator or the Trustee shall provide to each
Participant:
(1) the offer to purchase or exchange as
distributed by the offeror to the shareholders of
Big Flower Holdings, Inc.;
(2) a statement of the shares of common stock of Big
Flower Holdings, Inc. represented by units credited
to his account; and
(3) directions as to the means by which a Participant
can give instructions with respect to the tender or
exchange offer.
The Company shall establish and pay for a means by which a
Participant can expeditiously deliver to the Administrator
instructions addressed to the Trustee with respect to a tender
or exchange offer. The Administrator shall transmit to the
Trustee the aggregate numbers of shares to be tendered or
withheld from tender repre senting instructions of
Participants. The Administrator, at its election, may engage
an agent to receive instructions from Participants and
transmit them to the Trustee.
(c) Duties of the Trustee. The Trustee shall follow
the instructions of the Participants with respect to the
tender or exchange offer as transmitted to the Trustee. The
Trustee may establish a reasonable time, taking into account
the time restrictions of the tender
78
<PAGE>
or exchange offer, after which it shall not accept
instructions of Participants.
10.3 APPLICABILITY
In the case of a Beneficiary of a deceased Participant, or an
alternate payee under a qualified domestic relations order for whom an account
has been established under this Plan, such Beneficiary or alternate payee, as
the case may be, shall have the same rights and shall otherwise be treated in
the same manner for purposes of this Article X as the Participant on whose
behalf the account initially was established.
10.4 CONFIDENTIALITY
Notwithstanding anything contained herein to the contrary, all
instructions and directions received by the Trustee from Participants pursuant
to this Article X shall be maintained by the Trustee as confidential and shall
not be disclosed to any person, including but not limited to, any Employer or
any Employee, officer or director of any Employer; provided, however, that such
instructions and directions may be relayed by the Trustee to a recordkeeper,
auditor or other person who regularly provides services to the Plan.
79
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed the day and
year first above written.
Signed, sealed, and delivered
in the presence of:
WEBCRAFT, INC.
/s/ ANDREA GREY By /s/ WILLIAM S. HOUGH
- ---------------------------
WITNESSES AS TO EMPLOYER
80
<PAGE>
Exhibit 4.6
WEBCRAFT TECHNOLOGIES, INC.
EMPLOYEES ACCUMULATED SAVINGS TRUST
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS ........................................ 18
2.2 DETERMINATION OF TOP HEAVY STATUS .................................. 18
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER ........................ 22
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY ............................ 23
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES ...................... 23
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR ............................. 23
2.7 RECORDS AND REPORTS ................................................ 25
2.8 APPOINTMENT OF ADVISERS ............................................ 25
2.9 INFORMATION FROM EMPLOYER .......................................... 25
2.10 PAYMENT OF EXPENSES ................................................ 25
2.11 MAJORITY ACTIONS ................................................... 26
2.12 CLAIMS PROCEDURE ................................................... 26
2.13 CLAIMS REVIEW PROCEDURE ............................................ 26
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY .......................................... 27
3.2 APPLICATION FOR PARTICIPATION ...................................... 27
3.3 EFFECTIVE DATE OF PARTICIPATION .................................... 27
3.4 DETERMINATION OF ELIGIBILITY ....................................... 27
3.5 TERMINATION OF ELIGIBILITY ......................................... 28
3.6 OMISSION OF ELIGIBLE EMPLOYEE ...................................... 28
<PAGE>
3.7 INCLUSION OF INELIGIBLE EMPLOYEE ................................... 28
3.8 ELECTION NOT TO PARTICIPATE ........................................ 28
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION .................... 29
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION ............................ 29
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION ......................... 33
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS ............................ 34
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS ................................... 39
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS ..................... 41
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS ............................... 44
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE
TESTS .............................................................. 47
4.9 MAXIMUM ANNUAL ADDITIONS ........................................... 50
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS .......................... 54
4.11 TRANSFERS FROM QUALIFIED PLANS ..................................... 55
4.12 VOLUNTARY CONTRIBUTIONS ............................................ 57
4.13 DIRECTED INVESTMENT ACCOUNT ........................................ 58
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND ........................................ 58
5.2 METHOD OF VALUATION ................................................ 59
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT .......................... 59
<PAGE>
6.2 DETERMINATION OF BENEFITS UPON DEATH ............................... 59
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY ................... 61
6.4 DETERMINATION OF BENEFITS UPON TERMINATION ......................... 61
6.5 DISTRIBUTION OF BENEFITS ........................................... 64
6.6 DISTRIBUTION OF BENEFITS UPON DEATH ................................ 67
6.7 TIME OF SEGREGATION OR DISTRIBUTION ................................ 68
6.8 DISTRIBUTION FOR MINOR BENEFICIARY ................................. 68
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN ..................... 68
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP .................................. 68
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION .................... 70
6.12 DIRECT ROLLOVER .................................................... 70
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT .......................................................... 72
7.2 TERMINATION ........................................................ 72
7.3 MERGER OR CONSOLIDATION ............................................ 73
7.4 LOANS TO PARTICIPANTS .............................................. 73
ARTICLE VIII
MISCELLANEOUS
8.1 PARTICIPANT'S RIGHTS ............................................... 75
8.2 ALIENATION ......................................................... 75
8.3 CONSTRUCTION OF PLAN ............................................... 76
8.4 GENDER AND NUMBER .................................................. 76
8.5 LEGAL ACTION ....................................................... 76
8.6 PROHIBITION AGAINST DIVERSION OF FUNDS ............................. 76
8.7 BONDING ............................................................ 77
<PAGE>
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE ......................... 77
8.9 INSURER'S PROTECTIVE CLAUSE ........................................ 77
8.10 RECEIPT AND RELEASE FOR PAYMENTS ................................... 78
8.11 ACTION BY THE EMPLOYER ............................................. 78
8.12 NAMED FIDUCIARIES AND ALLOCATION OF
RESPONSIBILITY ..................................................... 78
8.13 HEADINGS ........................................................... 79
8.14 APPROVAL BY INTERNAL REVENUE SERVICE ............................... 79
8.15 UNIFORMITY ......................................................... 79
ARTICLE IX
PARTICIPATING EMPLOYERS
9.1 ADOPTION BY OTHER EMPLOYERS ........................................ 80
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS ............................ 80
9.3 DESIGNATION OF AGENT ............................................... 81
9.4 EMPLOYEE TRANSFERS ................................................. 81
9.5 PARTICIPATING EMPLOYER'S CONTRIBUTION .............................. 81
9.6 AMENDMENT .......................................................... 82
9.7 DISCONTINUANCE OF PARTICIPATION .................................... 82
9.8 ADMINISTRATOR'S AUTHORITY .......................................... 82
<PAGE>
WEBCRAFT TECHNOLOGIES, INC.
EMPLOYEES ACCUMULATED SAVINGS TRUST
THIS PLAN, hereby adopted this 29 day of February, 1996, by Webcraft
Technologies, Inc. (herein referred to as the "Employer").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution made to
its successful operation by its employees and to reward such contribution by
means of a 401(k) Profit Sharing Plan for those employees who shall qualify as
Participants hereunder;
NOW, THEREFORE, effective July 1, 1995, (hereinafter called the
"Effective Date"), the Employer hereby establishes a Profit Sharing Plan (the
"Plan") for the exclusive benefit of the Participants and their Beneficiaries,
on the following terms:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person or entity designated by the Employer
pursuant to Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1
<PAGE>
1.8 "Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Regulation
1.62-2(c)) for a Plan Year.
Compensation shall exclude (a) (1) contributions made by the
Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the gross income of the Employee).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding severance pay.
(b) excluding long-term incentive plan payments.
(c) including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not
includible in the gross income of the Participant under Code
Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or 457, and Employee
contributions described in Code Section 414(h)(2) that are treated
as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized as of such Employee's effective date of participation
pursuant to Section 3.3.
Compensation in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and
2
<PAGE>
in such manner as permitted under Code Section 415(d), except that the dollar
increase in effect on January 1 of any calendar year shall be effective for the
Plan Year beginning with or within such calendar year and the first adjustment
to the $200,000 limitation shall be effective on January 1, 1990. For any short
Plan Year the Compensation limit shall be an amount equal to the Compensation
limit for the calendar year in which the Plan Year begins multiplied by the
ratio obtained by dividing the number of full months in the short Plan Year by
twelve (12). In applying this limitation, the family group of a Highly
Compensated Participant who is subject to the Family Member aggregation rules of
Code Section 414(q)(6) because such Participant is either a "five percent owner"
of the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year. If, as a result of the
application of such rules the adjusted $200,000 limitation is exceeded, then the
limitation shall be prorated among the affected Family Members in proportion to
each such Family Member's Compensation prior to the application of this
limitation, or the limitation shall be adjusted in accordance with any other
method permitted by Regulation.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of each
Employee taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference
in this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the
3
<PAGE>
first day of the first Plan Year beginning on or after January 1, 1994, the OBRA
'93 annual compensation limit is $150,000.
If, as a result of such rules, the maximum "annual addition" limit
of Section 4.9(a) would be exceeded for one or more of the affected Family
Members, the prorated Compensation of all affected Family Members shall be
adjusted to avoid or reduce any excess. The prorated Compensation of any
affected Family Member whose allocation would exceed the limit shall be adjusted
downward to the level needed to provide an allocation equal to such limit. The
prorated Compensation of affected Family Members not affected by such limit
shall then be adjusted upward on a pro rata basis not to exceed each such
affected Family Member's Compensation as determined prior to application of the
Family Member rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an "excess amount"
still results, such "excess amount" shall be disposed of in the manner described
in Section 4.10(a) pro rata among all affected Family Members.
For purposes of this Section, if the Plan is a plan described in
Code Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
$200,000 limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.12 "Elective Contribution" means the Employer's contributions to the
Plan of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6 shall be
considered an Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be subject to the
requirements of Sections 4.2(b) and 4.2(c) and shall further be required to
satisfy the discrimination requirements of Regulation 1.401(k)-1(b)(5), the
provisions of which are specifically incorporated herein by reference.
4
<PAGE>
1.13 "Eligible Employee" means any Employee who is compensated on an
hourly basis.
Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties will not be eligible to
participate in this Plan unless such agreement expressly provides for coverage
in this Plan or two percent or more of the Employees of the Employer who are
covered pursuant to that agreement are professionals as defined in Regulation
1.410(b)-9.
Employees who are Participants in the Webcraft Employee Savings
Trust or Webcraft Retirement Income Plan maintained by the Employer shall not be
eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.15 "Employer" means Webcraft Technologies, Inc. and any Participating
Employer (as defined in Section 9.1) which shall adopt this Plan; any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. The Employer is a corporation, with principal offices in the Commonwealth
of Pennsylvania.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b), voluntary Employee contributions made pursuant
to Section 4.12, Excess Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a) and any qualified non-elective
contributions or elective deferrals taken into account pursuant to Section
4.7(c) on behalf of Highly Compensated Participants for such Plan Year, over the
maximum amount of such contributions permitted under the limitations of Section
4.7(a).
1.17 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions made on behalf of Highly Compensated Participants for
the Plan Year over the maximum amount of such contributions permitted under
Section 4.5(a). Excess Contributions, including amounts recharacterized
5
<PAGE>
pursuant to Section 4.6(a)(2), shall be treated as an "annual addition" pursuant
to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is incorporated
herein by reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to Section 4.9(b) when contributed to the Plan unless
distributed to the affected Participant not later than the first April 15th
following the close of the Participant's taxable year. Additionally, for
purposes of Sections 2.2 and 4.4(h), Excess Deferred Compensation shall continue
to be treated as Employer contributions even if distributed pursuant to Section
4.2(f). However, Excess Deferred Compensation of Non-Highly Compensated
Participants is not taken into account for purposes of Section 4.5(a) to the
extent such Excess Deferred Compensation occurs pursuant to Section 4.2(d).
1.19 "Family Member" means, with respect to an affected Participant, such
Participant's spouse and such Participant's lineal descendants and ascendants
and their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.22 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Terminated Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
6
<PAGE>
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(e)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.23 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment with the
Employer maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Regulation
1.62-2(c)) for a Plan Year.
"415 Compensation" shall exclude (a) (1) contributions made by the
Employer to a plan of deferred compensation to the extent that, the
contributions are not includible in the gross income of the Participant for the
taxable year in which contributed, (2) Employer contributions made on behalf of
an Employee to a simplified employee pension plan described in Code Section
408(k) to the extent such contributions are excludable from the Employee's gross
income, (3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or is
no longer subject to a substantial risk of forfeiture; (c) amounts realized from
the sale, exchange or other disposition of stock acquired under a qualified
stock option; and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the gross income of the Employee).
1.25 "414(s) Compensation" with respect to any Participant means such
Participant's Elective Contributions attributable to Deferred Compensation
recharacterized as voluntary Employee contributions pursuant to Section 4.6(a)
plus "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
7
<PAGE>
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be disregarded.
Such amount shall be adjusted at the same time and in such manner as permitted
under Code Section 415(d), except that the dollar increase in effect on January
1 of any calendar year shall be effective for the Plan Year beginning with or
within such calendar year and the first adjustment to the $200,000 limitation
shall be effective on January 1, 1990. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation" limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by twelve
(12). In applying this limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member aggregation rules of Code
Section 414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, shall be treated as a single
Participant, except that for this purpose Family Members shall include only the
affected Participant's spouse and any lineal descendants who have not attained
age nineteen (19) before the close of the year.
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of each
Employee taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Code Section 401(a)(17)(B). The cost of living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such calendar
year. If a determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of months in the determination period, and the denominator
of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference
in this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA
'93 annual compensation limit set forth in this provision.
8
<PAGE>
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan Year,
the Compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.26 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year"
or "look-back year" were "five percent owners" as defined in Section
1.32(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50
percent of the limit in effect under Code Section 415(b)(1)(A) for
any such Plan Year. The number of officers shall be limited to the
lesser of (i) 50 employees; or (ii) the greater of 3 employees or 10
percent of all employees. For the purpose of determining the number
of officers, Employees described in Section 1.55(a), (b), (c) and
(d) shall be excluded, but such Employees shall still be considered
for the purpose of identifying the particular Employees who are
officers. If the Employer does not have at least one officer whose
annual "415 Compensation" is in excess of 50 percent of the Code
Section 415(b)(1)(A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination
year" for "look-back year."
9
<PAGE>
The "look-back year" shall be the calendar year ending with or
within the Plan Year for which testing is being performed, and the
"determination year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the Plan Year
for which testing is being performed (the "lag period"). If the "lag period" is
less than twelve months long, the dollar threshold amounts specified in (b), (c)
and (d) above shall be prorated based upon the number of months in the "lag
period."
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amounts specified in (b) and (c) above shall be adjusted at
such time and in such manner as is provided in Regulations. In the case of such
an adjustment, the dollar limits which shall be applied are those for the
calendar year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who
are non-resident aliens and who received no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.27 "Highly Compensated Former Employee" means a former Employee who had
a separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner." For purposes
of this Section, "determination year," "415 Compensation" and "five percent
owner" shall be determined in
10
<PAGE>
accordance with Section 1.26. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees. The method set forth in this Section
for determining who is a "Highly Compensated Former Employee" shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.28 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) 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; (2) 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, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. These hours will be credited to the Employee for the
computation period or periods to which the award or agreement pertains rather
than the computation period in which the award, agreement or payment is made.
The same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
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; and (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.
For purposes of this Section, 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.
An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for
11
<PAGE>
purposes of accrued benefits, a 1-Year Break in Service, and employment
commencement date (or reemployment commencement date). In addition, Hours of
Service will be credited for employment with other Affiliated Employers. The
provisions of Department of Labor regulations 2530.200b-2(b) and (c) are
incorporated herein by reference.
1.30 "Income" means the income or losses allocable to Excess Deferred
Compensation, Excess Contributions or Excess Aggregate Contributions which
amount shall be allocated in the same manner as income or losses are allocated
pursuant to Section 4.4(g).
1.31 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 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 annual "415 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, employers that would otherwise be aggregated
12
<PAGE>
under Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers.
(d) a "one percent owner" of the Employer having an annual
"415 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 one percent (1%) 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 one percent (1%) of the capital or
profits interest in the Employer. In determining percentage
ownership hereunder, employers that would otherwise be aggregated
under Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an individual
has "415 Compensation" of more than $150,000, "415 Compensation"
from each employer required to be aggregated under Code Sections
414(b), (c), (m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.33 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.34 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by the
recipient employer. A Leased Employee shall not be considered an Employee of the
recipient:
(a) if such employee is covered by a money purchase pension
plan providing:
(1) a non-integrated employer contribution rate of at least
10% of compensation, as defined in
13
<PAGE>
Code Section 415(c)(3), but including amounts which are
contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of
the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457, and Employee contributions
described in Code Section 414(h)(2) that are treated as
Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer's contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution.
1.36 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.37 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Age" means the Participant's 65th birthday, or his
5th anniversary of joining the Plan, if later, but in no event later than his
55th birthday. A Participant shall become fully Vested in his Participant's
Account upon attaining his Normal Retirement Age.
1.39 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.40 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. 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 "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and 1-Year Breaks in Service shall be
measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
14
<PAGE>
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, 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 immediately following computation period.
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.
1.41 "Participant" means any Eligible Employee who participates in the
Plan as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.42 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer's Non-Elective Contributions.
1.43 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.44 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.45 "Plan" means this instrument, including all amendments thereto.
1.46 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st,
except for the first Plan Year which commenced July 1st.
1.47 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective
15
<PAGE>
Contribution for the purposes of the Plan and used to satisfy the "Actual
Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.8(h) which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions and
be subject to the provisions of Sections 4.2(b) and 4.2(c).
1.48 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.49 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.50 "Retirement Date" means the date as of which a Participant retires
for reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.51 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
1.52 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.53 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.54 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.55 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.26) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
16
<PAGE>
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.56 "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.
1.57 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
1.58 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.59 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.60 "Voluntary Contribution Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan resulting from the Participant's nondeductible voluntary
contributions made pursuant to Section 4.12.
Amounts recharacterized as voluntary Employee contributions pursuant
to Section 4.6(a) shall remain subject to the limitations of Sections 4.2(b) and
4.2(c). Therefore, a separate accounting shall be maintained with respect to
that
17
<PAGE>
portion of the Voluntary Contribution Account attributable to voluntary Employee
contributions made pursuant to Section 4.12.
1.61 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For vesting purposes, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
For all other purposes, the computation period shall be the Plan
Year.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c). However,
in determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with any Webcraft affiliate during the time a
qualified plan was maintained shall be recognized.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan
Year, but such Participant was a Key Employee
18
<PAGE>
for any prior Plan Year, such Participant's Present Value of Accrued
Benefit and/or Aggregate Account balance shall not be taken into
account for purposes of determining whether this Plan is a Top Heavy
or Super Top Heavy Plan (or whether any Aggregation Group which
includes this Plan is a Top Heavy Group). In addition, if a
Participant or Former Participant has not performed any services for
any Employer maintaining the Plan at any time during the five year
period ending on the Determination Date, any accrued benefit for
such Participant or Former Participant shall not be taken into
account for the purposes of determining whether this Plan is a Top
Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year in which, as of the Determination Date, (1) the Present Value
of Accrued Benefits of Key Employees and (2) the sum of the
Aggregate Accounts of Key Employees under this Plan and all plans of
an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate Account as of
the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most
recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of any
contributions actually made after the valuation date but due
on or before the Determination Date, except for the first Plan
Year when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year.
(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of distributions
made after the valuation date and prior to the Determination
Date, such distributions are not included as distributions for
top heavy purposes to the extent that such distributions are
already included in the Participant's Aggregate Account
balance as of the valuation date. Notwithstanding anything
herein to the contrary, all distributions, including
distributions made prior
19
<PAGE>
to January 1, 1984, and distributions under a terminated plan
which if it had not been terminated would have been required
to be included in an Aggregation Group, will be counted.
Further, distributions from the Plan (including the cash value
of life insurance policies) of a Participant's account balance
because of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible
qualified voluntary employee contributions shall not be
considered to be a part of the Participant's Aggregate Account
balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another employer), if this Plan provides the
rollovers or plan-to-plan transfers, it shall always consider
such rollovers or plan-to-plan transfers as a distribution for
the purposes of this Section. If this Plan is the plan
accepting such rollovers or plan-to-plan transfers, it shall
not consider such rollovers or plan-to-plan transfers as part
of the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made
to a plan maintained by the same employer), if this Plan
provides the rollover or plan-to-plan transfer, it shall not
be counted as a distribution for purposes of this Section. If
this Plan is the plan accepting such rollover or plan-to-plan
transfer, it shall consider such rollover or plan-to-plan
transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or
plan-to-plan transfer is accepted.
(7) For the purposes of determining whether two employers are
to be treated as the same employer in (5) and (6) above, all
employers aggregated under Code Section 414(b), (c), (m) and
(o) are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
20
<PAGE>
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer in
which a Key Employee is a participant in the Plan Year
containing the Determination Date or any of the four preceding
Plan Years, and each other plan of the Employer which enables
any plan in which a Key Employee participates to meet the
requirements of Code Sections 401(a)(4) or 410, will be
required to be aggregated. Such group shall be known as a
Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required
Aggregation Group is a Top Heavy Group. No plan in the
Required Aggregation Group will be considered a Top Heavy Plan
if the Required Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions of
Code Sections 401(a)(4) and 410. Such group shall be known as
a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a plan
that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation
Group is a Top Heavy Group. No plan in the Permissive
Aggregation Group will be considered a Top Heavy Plan if the
Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are Top
Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of
the Employer if it was maintained within the last five (5)
years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the
last day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key
21
<PAGE>
Employee, shall be as determined using the single accrual method
used for all plans of the Employer and Affiliated Employers, or if
no such single method exists, using a method which results in
benefits accruing not more rapidly than the slowest accrual rate
permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall be determined as of the most
recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in Code
Section 416 and the Regulations thereunder for the first and second
plan years of a defined benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which, as
of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered 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
the Plan, the Code, and the Act.
(b) The Employer shall establish a "funding policy and
method," i.e., it shall determine whether the Plan has a short run
need for liquidity (e.g., to pay benefits) or whether liquidity is a
long run goal and investment growth (and stability of same) is a
more current need, or shall appoint a qualified person to do so. The
Employer or its delegate shall communicate such needs and goals to
the Trustee, who shall coordinate such Plan needs with its
investment policy. The communication of such a "funding policy and
method" shall not, however, constitute a directive to the Trustee as
to investment of the Trust Funds. Such "funding policy and method"
shall be consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
22
<PAGE>
(c) The Employer shall periodically review the performance of
any Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If the
Employer does not appoint an Administrator, the Employer will function as the
Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.6 POWERS AND DUTIES 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 and discretion to
construe the terms of the Plan and to 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,
23
<PAGE>
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 the Plan; provided, however, 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 the Act 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:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect
to the amount and the kind of benefits to which any 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 for regulation of the Plan as are consistent with
the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) 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 Plan;
(h) 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;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a
24
<PAGE>
portion of their Compensation deferred or paid to them in cash;
(j) to assist any Participant regarding his rights, benefits,
or elections available under the Plan.
2.7 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, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other persons as
the Administrator or the Trustee deems necessary or desirable in connection with
the administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his 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.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
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. However, the Employer may reimburse the Trust Fund for any
administration expense incurred.
25
<PAGE>
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. 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.
2.13 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
2.12 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 2.12. The
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 expense 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
26
<PAGE>
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.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder on
the date of his employment with the Employer. The Employer shall give each
prospective Eligible Employee written notice of his eligibility to participate
in the Plan prior to the close of the Plan Year in which he first becomes an
Eligible Employee.
3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee
shall make application to the Employer for participation in the Plan and agree
to the terms hereof. Upon the acceptance of any benefits under this Plan, such
Employee shall automatically be deemed to have made application and shall be
bound by the terms and conditions of the Plan and all amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the
earlier of the first day of the Plan Year or the first day of the seventh month
of such Plan Year coinciding with or next following the date such Employee met
the eligibility requirements of Section 3.1, provided said Employee was still
employed as of such date (or if not employed on such date, as of the date of
rehire if a 1-Year Break in Service has not occurred).
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee would have otherwise previously become a
Participant.
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
27
<PAGE>
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification
of an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in his interest in the Plan for
each Year of Service completed while a noneligible Employee, until
such time as his Participant's Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate
but has not incurred a 1-Year Break in Service, such Employee will
participate immediately upon returning to an eligible class of
Employees. If such Participant incurs a 1-Year Break in Service,
eligibility will be determined under the break in service rules of
the Plan.
3.6 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.7 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has been
made, the Employer shall not be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer,
28
<PAGE>
in writing, at least thirty (30) days before the beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer's Elective Contribution.
(b) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, for Participants whose
annual base salary is less than $50,000, the Employer matching
contribution shall be equal to 25% of the Participant's Elective
Contributions to the extent the rate of such Elective Contributions
in effect from time to time does not exceed 6% of his Compensation.
For Participants whose annual base salary equals or exceeds $50,000,
there shall be no Employer matching contribution. The Administrator
may, during a Plan Year, increase the Employer matching contribution
percentage, effective from the first day of such Plan Year, to a
percentage not exceeding 50%. Any such bonus increase may be lowered
or eliminated at any time as may the Employer matching contribution,
both at the sole discretion of the Administrator. These amounts
shall be deemed an Employer's Non-Elective Contribution.
(c) Notwithstanding the foregoing, however, the Employer's
contributions 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.
(d) Except, however, to the extent necessary to provide the
top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds the amount which is deductible under
Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer his Compensation which
would have been received in the Plan Year, but for the deferral
election, by up to 17%. A deferral election (or modification of an
earlier election) may not be made with respect to Compensation
29
<PAGE>
which is currently available on or before the date the Participant
executed such election or, if later, the latest of the date the
Employer adopts this cash or deferred arrangement, or the date such
arrangement first became effective.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's
Elective Account.
(b) The balance in each Participant's Elective Account shall
be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(c) Amounts held in the Participant's Elective Account may not
be distributable earlier than:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that
is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 409(d)(2)) used in
a trade or business of such corporation if such corporation
continues to maintain this Plan after the disposition with
respect to a Participant who continues employment with the
corporation acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) to
an entity which is not an Affiliated Employer but only with
respect to a Participant who continues employment with such
subsidiary; or
(6) the proven financial hardship of a Participant, subject to
the limitations of Section 6.10.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements
of the Employer maintaining this Plan shall not exceed, during any
taxable year of
30
<PAGE>
the Participant, the limitation imposed by Code Section 4O2(g), as
in effect at the beginning of such taxable year. If such dollar
limitation is exceeded, a Participant will be deemed to have
notified the Administrator of such excess amount which shall be
distributed in a manner consistent with Section 4.2(f). The dollar
limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any
other plan maintained by the Employer, then such Participant shall
not be permitted to elect to have Deferred Compensation contributed
to the Plan on his behalf for a period of twelve (12) months
following the receipt of the distribution. Furthermore, the dollar
limitation under Code Section 402(g) shall be reduced, with respect
to the Participant's taxable year following the taxable year in
which the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3l21(a)(5)(D)), a deferred
compensation plan under Code Section 457, or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1 following the close of the Participant's taxable year,
notify the Administrator in writing of such excess and request that
his Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than
the first April 15th following the close of the Participant's
taxable year. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro
rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred
Compensation
31
<PAGE>
under the Plan for the taxable year. Any distribution on or before
the last day of the Participant's taxable year must satisfy each of
the following conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
(3) the Plan must designate the distribution as a distribution
of Excess Deferred Compensation.
Matching contributions which relate to Excess Deferred
Compensation which is distributed pursuant to this Section 4.2(f)
shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero,
by any distribution and/or recharacterization of Excess
Contributions pursuant to Section 4.6(a) for the Plan Year beginning
with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(i) All amounts allocated to a Participant's Elective Account
may be treated as a Directed Investment Account pursuant to Section
4.13.
(j) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short-term debt security acceptable to the
Trustee until such time as the allocations pursuant to Section 4.4
have been made.
(k) The Employer and the Administrator shall implement the
salary reduction elections provided for herein in accordance with
the following:
(1) A Participant may commence making elective deferrals to
the Plan only after first satisfying the eligibility and
participation requirements specified in Article III. However,
the Participant must make his initial salary deferral election
within a reasonable time, not to exceed
32
<PAGE>
thirty (30) days, after entering the Plan pursuant to Section
3.3. If the Participant fails to make an initial salary
deferral election within such time, then such Participant may
thereafter make an election in accordance with the rules
governing modifications. The Participant shall make such an
election by entering into a written salary reduction agreement
with the Employer and filing such agreement with the
Administrator. Such election shall initially be effective
beginning with the pay period following the acceptance of the
salary reduction agreement by the Administrator, shall not
have retroactive effect and shall remain in force until
revoked.
(2) A Participant may modify a prior election during the Plan
Year and concurrently make a new election by filing a written
notice with the Administrator within a reasonable time before
the pay period for which such modification is to be effective.
However, modifications to a salary deferral election shall
only be permitted semi-annually, during election periods
established by the Administrator prior to the first day of a
Plan Year and the first day of the seventh month of a Plan
Year. Any modification shall not have retroactive effect and
shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the
Plan Year by providing the Administrator with thirty (30) days
written notice of such revocation (or upon such shorter notice
period as may be acceptable to the Administrator). Such
revocation shall become effective as of the beginning of the
first pay period coincident with or next following the
expiration of the notice period. Furthermore, the termination
of the Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke any
salary reduction agreement then in effect, effective
immediately following the close of the pay period within which
such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to
the Plan for each Plan Year within the time prescribed by law, including
extensions of time, for the filing of the Employer's federal income tax return
for the Fiscal Year.
33
<PAGE>
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets,
but in any event within ninety (90) days from the date on which such amounts
would otherwise have been payable to the Participant in cash. The Provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an account
in the name of each Participant to which the Administrator shall
credit as of each Anniversary Date all amounts allocated to each
such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer's contributions for each Plan Year.
Within a reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's Account
in accordance with Section 4.1(b).
(c) As of each Anniversary Date any amounts which became
Forfeitures since the Anniversary Date shall first be made available
to reinstate
34
<PAGE>
previously forfeited account balances of Former Participants, if
any, in accordance with Section 6.4(e)(2). The remaining
Forfeitures, if any, shall be used to reduce the contribution of the
Employer hereunder for the Plan Year in which such Forfeitures
occur.
(d) With respect to the first Plan Year ending December 31st,
Participants shall not be required to fulfill the service
requirement specified herein to share in any Employer contribution.
However, Participants must continue to be actively employed on the
last day of such Plan Year to the extent provided herein.
(e) For any Top Heavy Plan Year, Employees not otherwise
eligible to share in the allocation of contributions as provided
above, shall receive the minimum allocation provided for in Section
4.4(h) if eligible pursuant to the provisions of Section 4.4(j).
(f) Participants who are not actively employed on the last day
of the Plan Year due to Retirement (Normal or Late), Total and
Permanent Disability or death shall share in the allocation of
contributions for that Plan Year only if otherwise eligible in
accordance with this Section.
(g) As of each Anniversary Date or other valuation date, after
allocation of Employer contributions and after allocation of
Forfeitures, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the same
proportion that each Participant's and Former Participant's
nonsegregated accounts bear to the total of all Participants' and
Former Participants' nonsegregated accounts as of such date.
Participants' transfers from other qualified plans and
voluntary contributions deposited in the general Trust Fund shall
share in any earnings and losses (net appreciation or net
depreciation) of the Trust Fund in the same manner provided above.
Each segregated account maintained on behalf of a Participant shall
be credited or charged with its separate earnings and losses.
(h) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer's contributions allocated to the Participant's
Combined Account of each Employee shall be equal to at least three
percent (3%) of such Employee's "415 Compensation" (reduced by
contributions and
35
<PAGE>
forfeitures, if any, allocated to each Employee in any defined
contribution plan included with this plan in a Required Aggregation
Group). However, if (1) the sum of the Employer's contributions
allocated to the Participant's Combined Account of each Key Employee
for such Top Heavy Plan Year is less than three percent (3%) of each
Key Employee's "415 Compensation" and (2) this Plan is not required
to be included in an Aggregation Group to enable a defined benefit
plan to meet the requirements of Code Section 401(a)(4) or 410, the
sum of the Employer's contributions allocated to the Participant's
Combined Account of each Employee shall be equal to the largest
percentage allocated to the Participant's Combined Account of any
Key Employee. However, in determining whether a Non-Key Employee has
received the required minimum allocation, such Non-Key Employee's
Deferred Compensation and matching contributions needed to satisfy
the "Actual Contribution Percentage" tests pursuant to Section
4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required in
this Plan for any Employee who participates in another defined
contribution plan subject to Code Section 412 providing such
benefits included with this Plan in a Required Aggregation Group.
(i) For purposes of the minimum allocations set forth above,
the percentage allocated to the Participant's Combined Account of
any Key Employee shall be equal to the ratio of the sum of the
Employer's contributions allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(j) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(k) For the purposes of this Section, "415 Compensation" shall
be limited to $200,000. Such amount shall be adjusted at the same
time and in the same manner as permitted under Code Section 415(d),
except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or
within such calendar year and the first adjustment to the $200,000
limitation shall be effective on January 1, 1990. For any short Plan
Year
36
<PAGE>
the "415 Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of
full months in the short Plan Year by twelve (12).
In addition to other applicable limitations set forth in
the Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Employee taken into account under the
Plan shall not exceed the OBRA '93 annual compensation limit. The
OBRA '93 annual compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with
Code Section 401(a)(17)(B). The cost of living adjustment in effect
for a calendar year applies to any period, not exceeding 12 months,
over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is
12.
For Plan Years beginning on or after January 1, 1994,
any reference in this Plan to the limitation under Code Section
401(a)(17) shall mean the OBRA '93 annual compensation limit set
forth in this provision.
If Compensation for any prior determination period is
taken into account in determining an Employee's benefits accruing in
the current Plan Year, the Compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
(l) Notwithstanding anything herein to the contrary,
Participants who terminated employment for any reason during the
Plan Year shall share in the salary reduction contributions made by
the Employer for the year of termination without regard to the Hours
of Service credited.
(m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall
be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
37
<PAGE>
(2) one account representing his status in the Plan
attributable to post-break service.
(n) Notwithstanding anything to the contrary, if this is a
Plan that would otherwise fail to meet the requirements of Code
Sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the
Regulations thereunder because Employer contributions would not be
allocated to a sufficient number or percentage of Participants for a
Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to
include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the
applicable test specified above. The specific Participants who
shall become eligible under the terms of this paragraph shall
be those who are actively employed on the last day of the Plan
Year and, when compared to similarly situated Participants,
have completed the greatest number of Hours of Service in the
Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution
for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed
on the last day of the Plan Year as are necessary to satisfy
the applicable test. The specific Participants who shall
become eligible to share shall be those Participants, when
compared to similarly situated Participants, who have
completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be
reallocated to satisfy these requirements. In such event, the
Employer shall make an additional contribution equal to the
amount such affected Participants would have received had they
been included in the allocations, even if it exceeds the
amount which would be deductible under Code Section 404. Any
adjustment to the allocations pursuant to this paragraph shall
be considered a retroactive amendment adopted by the last day
of the Plan Year.
38
<PAGE>
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly Compensated
Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally,
the "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
multiplied by 2. The provisions of Code Section 401(k)(3) and
Regulation 1.401(k)-1(b) are incorporated herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code Section
401(m)(9)(A), any Highly Compensated Participant eligible to
make elective deferrals pursuant to Section 4.2 and to make
Employee contributions or to receive matching contributions
under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2,
the provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group for a
Plan Year, the average of the ratios, calculated separately for each
Participant in such group, of the amount of Employer Elective
Contributions allocated to each Participant's Elective Account for
such Plan Year, to such Participant's "414(s) Compensation" for such
Plan Year. The actual deferral ratio for each Participant and the
"Actual Deferral Percentage" for each group shall be calculated to
the nearest one-hundredth of one percent. Employer Elective
Contributions allocated to each Non-Highly Compensated Participant's
Elective Account
39
<PAGE>
shall be reduced by Excess Deferred Compensation to the extent such
excess amounts are made under this Plan or any other plan maintained
by the Employer.
(c) For the purpose of determining the actual deferral ratio
of a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant
is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be determined by aggregating Employer Elective
Contributions and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants). However,
in applying the $200,000 limit to "414(s) Compensation,"
Family Members shall include only the affected Employee's
spouse and any lineal descendants who have not attained age 19
before the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for
purposes of determining the "Actual Deferral Percentage" of
the Non-Highly Compensated Participant group except to the
extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who
are members of those family groups that include the
Participant are aggregated as one family group in accordance
with paragraphs (1) and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
(e) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include
cash or deferred arrangements are considered one plan for the
purposes of Code Section 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)), the cash or deferred arrangements
included in such plans shall be treated as one
40
<PAGE>
arrangement. In addition, two or more cash or deferred arrangements
may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections
401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k). Plans may be aggregated under this paragraph (e) only if
they have the same plan year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan for purposes of determining whether the employee
stock ownership plan or this Plan satisfies this Section and Code
Sections 401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is
part of an employee stock ownership plan as defined in Code Section
4975(e)(7) or 409) of the Employer or an Affiliated Employer, all
such cash or deferred arrangements shall be treated as one cash or
deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different plan
years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year
as a single arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a), the Administrator shall adjust Excess Contributions
pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall have his
portion of Excess Contributions distributed to him and/or at his
election recharacterized as a voluntary Employee contribution
pursuant to Section 4.12 until one of the tests set forth in Section
4.5(a) is satisfied, or until his actual deferral ratio equals the
actual deferral ratio of the Highly Compensated Participant having
the second highest actual deferral ratio. This process shall
41
<PAGE>
continue until one of the tests set forth in Section 4.5(a) is
satisfied. For each Highly Compensated Participant, the amount of
Excess Contributions is equal to the Elective Contributions on
behalf of such Highly Compensated Participant (determined prior to
the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual deferral
ratio (determined after application of this paragraph) by his
"414(s) Compensation." However, in determining the amount of Excess
Contributions to be distributed and/or recharacterized with respect
to an affected Highly Compensated Participant as determined herein,
such amount shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated
Participant for his taxable year ending with or within such Plan
Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall cause matching contributions which relate to
such Deferred Compensation to be forfeited;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on
which the last of those Highly Compensated Participants
with Excess Contributions to be recharacterized is
notified of the recharacterization and the tax
consequences of such recharacterization;
(ii) shall not exceed the amount of Deferred
Compensation on behalf of any Highly Compensated
Participant for any Plan Year;
(iii) shall be treated as voluntary Employee
contributions for purposes of Code
42
<PAGE>
Section 401(a)(4) and Regulation 1.401(k)-1(b). However,
for purposes of Sections 2.2 and 4.4(h), recharacterized
Excess Contributions continue to be treated as Employer
contributions that are Deferred Compensation. Excess
Contributions recharacterized as voluntary Employee
contributions shall continue to be nonforfeitable and
subject to the same distribution rules provided for in
Section 4.2(c);
(iv) are not permitted if the amount recharacterized
plus voluntary Employee contributions actually made by
such Highly Compensated Participant, exceed the maximum
amount of voluntary Employee contributions (determined
prior to application of Section 4.7(a)) that such Highly
Compensated Participant is permitted to make under the
Plan in the absence of recharacterization; and
(v) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less than
the entire amount of Excess Contributions shall be treated as
a pro rata distribution and/or recharacterization of Excess
Contributions and Income.
(4) The determination and correction of Excess Contributions
of a Highly Compensated Participant whose actual deferral
ratio is determined under the family aggregation rules shall
be accomplished by reducing the actual deferral ratio as
required herein, and the Excess Contributions for the family
unit shall then be allocated among the Family Members in
proportion to the Elective Contributions of each Family Member
that were combined to determine the group actual deferral
ratio.
(b) Within twelve (12) months after the end of the Plan Year,
the Employer may make a special Qualified Non-Elective Contribution
on behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy one of the tests set forth in Section 4.5(a).
Such contribution shall be allocated to the Participant's Elective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all
Non-Highly Compensated Participants.
43
<PAGE>
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the
order provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such percentage
for the Non-Highly Compensated Participant group plus 2
percentage points. However, to prevent the multiple use of the
alternative method described in this paragraph and Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section 4.2 or
any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee
contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2. The provisions of
Code Section 401(m) and Regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately
for each Participant in each group) of:
(1) the sum of Employer matching contributions made pursuant
to Section 4.1(b), voluntary Employee contributions made
pursuant to Section 4.12 and Excess Contributions
recharacterized as voluntary Employee contributions pursuant
to
44
<PAGE>
Section 4.6(a) on behalf of each such Participant for such
Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions
pursuant to Section 4.8(d), only Employer matching contributions
(excluding Employer matching contributions forfeited pursuant to
Sections 4.2(f) and 4.6(a)(1) or forfeited pursuant to Section
4.8(a)) contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator may
elect to take into account, with respect to Employees eligible to
have Employer matching contributions pursuant to Section 4.1(b) or
voluntary Employee contributions pursuant to Section 4.12 allocated
to their accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non-elective contributions (as defined
in Code Section 401(m)(4)(C)) contributed to any plan maintained by
the Employer. Such elective deferrals and qualified non-elective
contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-1(b)(5) which is incorporated herein
by reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution
ratio of a Highly Compensated Employee who is subject to the Family
Member aggregation rules of Code Section 414(q)(6) because such
Employee is either a "five percent owner" of the Employer or one of
the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, the following shall apply:
(1) The combined actual contribution ratio for the family
group (which shall be treated as one Highly Compensated
Participant) shall be determined by aggregating Employer
matching contributions made pursuant to Section 4.1(b),
voluntary Employee contributions made pursuant to Section
4.12, Excess Contributions recharacterized as voluntary
Employee contributions pursuant to Section 4.6(a) and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000
limit to "414(s) Compensation", Family Members shall include
only the affected Employee's spouse
45
<PAGE>
and any lineal descendants who have not attained age 19 before
the close of the Plan Year.
(2) The Employer matching contributions made pursuant to
Section 4.1(b), voluntary Employee contributions made pursuant
to Section 4.12, Excess Contributions recharacterized as
voluntary Employee contributions pursuant to Section 4.6(a)
and "414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Contribution Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into account in
paragraph (1) above.
(3) If a Participant is required to be aggregated as a member
of more than one family group in a plan, all Participants who
are members of those family groups that include the
Participant are aggregated as one family group in accordance
with paragraphs (1) and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made
are treated as one plan for purposes of Code Sections 401(a)(4) or
410(b) (other than the average benefits test under Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or
not such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m).
In such a case, the aggregated plans must satisfy this Section and
Code Sections 401(a)(4), 410(b) and 401(m) as though such aggregated
plans were a single plan. Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) which are maintained by
the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly
46
<PAGE>
Compensated Participant shall be aggregated for purposes of
determining such Highly Compensated Participant's actual
contribution ratio. However, if the plans have different plan years,
this paragraph shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly
Compensated Participant and Non-Highly Compensated Participant shall
include any Employee eligible to have Employer matching
contributions pursuant to Section 4.1(b) (whether or not a deferral
election was made or suspended pursuant to Section 4.2(e)) or
voluntary Employee contributions pursuant to Section 4.12 (whether
or not voluntary Employee contributions are made) allocated to his
account for the Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before
the fifteenth day of the third month following the end of the Plan
Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly
Compensated Participant having the highest actual contribution
ratio, his Vested portion of Excess Aggregate Contributions (and
Income allocable to such contributions) and, if forfeitable, forfeit
such non-Vested Excess Aggregate Contributions attributable to
Employer matching contributions (and Income allocable to such
forfeitures) until either one of the tests set forth in Section
4.7(a) is satisfied, or until his actual contribution ratio equals
the actual contribution ratio of the Highly Compensated Participant
having the second highest actual contribution ratio. This process
shall continue until one of the tests set forth in Section 4.7(a) is
satisfied. The distribution and/or forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Voluntary Employee contributions including Excess
Contributions recharacterized as voluntary Employee
contributions pursuant to Section 4.6(a)(2);
(2) Employer matching contributions.
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate
47
<PAGE>
Contributions (and Income) shall be treated as a pro rata
distribution and/or forfeiture of Excess Aggregate Contributions and
Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.4.
(c) Excess Aggregate Contributions attributable to amounts
other than voluntary Employee contributions, including forfeited
matching contributions, shall be treated as Employer contributions
for purposes of Code Sections 404 and 415 even if distributed from
the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated
and for the Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made Pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on
behalf of the Highly Compensated Participant (determined prior to
the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution
ratio (determined after application of this paragraph) by his
"414(s) Compensation." The actual contribution ratio must be rounded
to the nearest one-hundredth of one percent. In no case shall the
amount of Excess Aggregate Contribution with respect to any Highly
Compensated Participant exceed the amount of Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on
behalf of such Highly Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess
48
<PAGE>
Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any
other qualified cash or deferred arrangement (as defined in Code
Section 401(k)) maintained by the Employer that ends with or within
the Plan Year or which are treated as voluntary Employee
contributions due to recharacterization pursuant to Section 4.6(a).
(f) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules,
then the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 4.1(b), voluntary Employee
contributions made pursuant to Section 4.12, Excess Contributions
recharacterized as voluntary Employee contributions pursuant to
Section 4.6(a) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) of
each Family Member that were combined to determine the group actual
contribution ratio.
(g) If during a Plan Year the projected aggregate amount of
Employer matching contributions, voluntary Employee contributions
and Excess Contributions recharacterized as voluntary Employee
contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section
4.7(a), cause the Plan to fail such tests, then the Administrator
may automatically reduce proportionately or in the order provided in
Section 4.8(a) each affected Highly Compensated Participant's
projected share of such contributions by an amount necessary to
satisfy one of the tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such
49
<PAGE>
contributions from the "Actual Deferral Percentage" tests pursuant
to Section 4.5(a).
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual
additions" credited to a Participant's accounts for any "limitation
year" shall equal the lesser of: (1) $30,000 adjusted annually as
provided in Code Section 415(d) pursuant to the Regulations, or (2)
twenty-five percent (25%) of the Participant's "415 Compensation"
for such "limitation year." For any short "limitation year," the
dollar limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section
415, "annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts allocated,
after March 31, 1984, to an individual medical account, as defined
in Code Section 415(l)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account
of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit plan (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(l)(1).
(c) For purposes of applying the limitations of Code Section
415, the transfer of funds from one qualified plan to another is not
an "annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs);
(4) repayments of distributions received by an Employee pursuant to
Code Section 411(a)(3)(D)
50
<PAGE>
(mandatory contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income under Code
Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section
415, the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not)
ever maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer is a
member of a controlled group of corporations, trades or businesses
under common control (as defined by Code Section 1563(a) or Code
Section 414(b) and (c) as modified by Code Section 415(h)), is a
member of an affiliated service group (as defined by Code Section
414(m)), or is a member of a group of entities required to be
aggregated pursuant to Regulations under Code Section 414(o), all
Employees of such Employers shall be considered to be employed by a
single Employer.
(g) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, all Employers of a Participant who maintain
this Plan will be considered to be a single Employer.
(h)(1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date, "annual
additions" will be credited to the Participant's accounts
under the defined contribution plan subject to Code Section
412 prior to crediting "annual additions" to the Participant's
accounts under the defined contribution plan not subject to
Code Section 412.
51
<PAGE>
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained
by the Employer which have the same Anniversary Date, the
maximum "annual additions" under this Plan shall equal the
product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously
credited under subparagraphs (1) or (2) above, multiplied by
(B) a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations of
Code Section 415 and (ii) the denominator of which is such
"annual additions" for all plans described in this
subparagraph.
(i) If an Employee is (or has been) a Participant in one or
more defined benefit plans and one or more defined contribution
plans maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the
Participant's projected annual benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent
of the dollar limitation determined for the "limitation year" under
Code Sections 415(b) and (d) or 140 percent of the highest average
compensation, including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation
year" beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all "limitation years" beginning before January 1,
1987.
(k) The defined contribution plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the annual
additions to the
52
<PAGE>
Participant's Account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior "limitation years" (including the annual
additions attributable to the Participant's nondeductible Employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code
Section 419(e), and individual medical accounts, as defined in Code
Section 415(1)(2), maintained by the Employer), and the denominator
of which is the sum of the maximum aggregate amounts for the current
and all prior "limitation years" of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer). The maximum aggregate amount in any "limitation year"
is the lesser of 125 percent of the dollar limitation determined
under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for
such year.
If the Employee was a Participant as of the end of the
first day of the first "limitation year" beginning after December
31, 1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the numerator
of this fraction will be adjusted if the sum of this fraction and
the defined benefit fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times
(2) the denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the end of the
last "limitation year" beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the Code Section 415 limitation
applicable to the first "limitation year" beginning on or after
January 1, 1987. The annual addition for any "limitation year"
beginning before January 1, 1987 shall not be recomputed to treat
all Employee contributions as annual additions.
(l) Notwithstanding the foregoing, for any "limitation year"
in which the Plan is a Top Heavy Plan, 100 percent shall be
substituted for 125 percent in Sections 4.9(k) and 4.9(l) unless the
extra minimum allocation is being provided pursuant to Section 4.4.
However, for any "limitation year" in which the Plan is a Super Top
Heavy Plan, 100 percent shall be substituted for 125 percent in any
event.
53
<PAGE>
(m) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under
the limits of Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the "annual additions"
under this Plan would cause the maximum "annual additions" to be
exceeded for any Participant, the Administrator shall (1) distribute
any elective deferrals (within the meaning of Code Section
402(g)(3)) or return any voluntary Employee contributions credited
for the "limitation year" to the extent that the return would reduce
the "excess amount" in the Participant's accounts (2) hold any
"excess amount" remaining after the return of any elective deferrals
or voluntary Employee contributions in a "Section 415 suspense
account" (3) use the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary)
to reduce Employer contributions for that Participant if that
Participant is covered by the Plan as of the end of the "limitation
year," or if the Participant is not so covered, allocate and
reallocate the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary)
to all Participants in the Plan before any Employer or Employee
contributions which would constitute "annual additions" are made to
the Plan for such "limitation year" (4) reduce Employer
contributions to the Plan for such "limitation year" by the amount
of the "Section 415 suspense account" allocated and reallocated
during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any,
of (1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of
Code Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense
account" shall mean an unallocated account equal to the sum of
"excess amounts" for all
54
<PAGE>
Participants in the Plan during the "limitation year." The "Section
415 suspense account" shall not share in any earnings or losses of
the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Employees, provided that
the trust from which such funds are transferred permits the transfer
to be made and the transfer will not jeopardize the tax exempt
status of the Plan or Trust or create adverse tax consequences for
the Employer. The amounts transferred shall be set up in a separate
account herein referred to as a "Participant's Rollover Account."
Such account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held
by the Trustee pursuant to the provisions of this Plan and may not
be withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated
as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Participant's Rollover
Account shall be used to provide additional benefits to the
Participant or his Beneficiary. Any distributions of amounts held in
a Participant's Rollover Account shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent requirements
of Code Section 411(a)(11) and the Regulations thereunder.
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out
of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for
each Participant in a federally insured savings account, certificate
of
55
<PAGE>
deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) All amounts allocated to a Participant's Rollover Account
may be treated as a Directed Investment Account pursuant to Section
4.13.
(g) For purposes of this Section, the term "qualified plan"
shall mean any tax qualified plan under Code Section 401(a). The
term "amounts transferred from other qualified plans" shall mean:
(i) amounts transferred to this Plan directly from another qualified
plan; (ii) distributions from another qualified plan which are
eligible rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following his
receipt thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement
account has no assets other than assets which (A) were previously
distributed to the Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee
to this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
(h) Prior to accepting any transfers 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.
(i) This Plan shall not accept any direct or indirect
transfers (as that term is defined and interpreted under Code
Section 401(a) (11) and the Regulations thereunder) from a defined
benefit plan, money purchase plan (including a target benefit plan),
stock bonus or profit sharing plan which would
56
<PAGE>
otherwise have provided for a life annuity form of payment to the
Participant.
(j) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of
any "Section 411(d)(6) protected benefit" as described in Section
7.1.
4.12 VOLUNTARY CONTRIBUTIONS
(a) In order to allow Participants the opportunity to increase
their retirement income, each Participant may, at the discretion of
the Administrator, elect to voluntarily contribute a portion of his
compensation earned while a Participant under this Plan. Such
contributions shall be paid to the Trustee within a reasonable
period of time but in no event later than ninety (90) days after the
receipt of the contribution. The balance in each Participant's
Voluntary Contribution Account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies
the provisions of Section 6.5, including, but not limited to, all
notice and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder. If the Administrator maintains sub-accounts
with respect to voluntary contributions (and earnings thereon) which
were made on or before a specified date, a Participant shall be
permitted to designate which sub-account shall be the source for his
withdrawal.
In the event such a withdrawal is made, or in the event
a Participant has received a hardship distribution pursuant to
Regulation 1.401(k)-1(d)(2)(iv)(B) from any other plan maintained by
the Employer, then such Participant shall be barred from making any
voluntary contributions to the Trust Fund for a period of twelve
(12) months after receipt of the withdrawal or distribution.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive
benefits, the fair market value of the Voluntary Contribution
Account shall be used to provide additional benefits to the
Participant or his Beneficiary.
57
<PAGE>
(d) The Administrator may direct that voluntary contributions
made after a valuation date be segregated into a separate account
for each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan association,
money market certificate, or other short term debt security
acceptable to the Trustee until such time as the allocations
pursuant to this Plan have been made, at which time they may remain
segregated or be invested as part of the general Trust Fund, to be
determined by the Administrator.
(e) All amounts allocated to a Voluntary Contribution Account
may be created as a Directed Investment Account pursuant to Section
4.13.
4.13 DIRECTED INVESTMENT ACCOUNT
(a) The Administrator, in his sole discretion, may determine
that all Participants be permitted to direct the Trustee as to the
investment of all or a portion of the interest in any one or more of
their individual account balances. If such authorization is given,
Participants may, subject to a procedure established by the
Administrator and applied in a uniform nondiscriminatory manner,
direct the Trustee in writing to invest any portion of their account
in specific assets, specific funds or other investments permitted
under the Plan and the directed investment procedure. That portion
of the account of any Participant so directing will thereupon be
considered a Directed Investment Account, which shall not share in
Trust Fund earnings.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and his Directed
Investment Account shall be charged and credited as the case may be
to each account. The Directed Investment Account shall not share in
Trust Fund earnings, but it shall be charged or credited as
appropriate with the net earnings, gains, losses and expenses as
well as any appreciation or depreciation in market value during each
Plan Year attributable to such account.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the Administrator,
herein called "valuation date,"
58
<PAGE>
to determine the net worth of the assets comprising the Trust Fund as exists on
the "valuation date." 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 has not yet obtained
reimbursement from the Employer or the Trust Fund.
5.2 METHOD OF VALUATION
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 are 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 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.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date or
attainment of his Normal Retirement Date without termination of employment with
the Employer, or as soon thereafter as is practicable, the Trustee shall
distribute all amounts credited to such Participant's Combined Account in
accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date
or other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the
59
<PAGE>
value of the deceased Participant's accounts to the Participant's
Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 6.6 and 6.7, to distribute any remaining Vested amounts
credited to the accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death
and such evidence of the right of any person to receive payment of
the value 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 of any
person to receive payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to
this Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified
domestic relations order" as defined in Code Section 414(p)
which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change
with the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. In the event no valid designation
of Beneficiary exists at the time of the
60
<PAGE>
Participant's death, the death benefit shall be payable to his
estate.
(f) Any consent by the Participant's spouse to waive any
rights to the death benefit must be in writing, must acknowledge the
effect of such waiver, and be witnessed by a Plan representative or
a notary public. Further, the spouse's consent must be irrevocable
and must acknowledge the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior
to his Retirement Date or other termination of his employment, all amounts
credited to such Participant's Combined Account shall become fully Vested. In
the event of a Participant's Total and Permanent Disability, the Trustee, in
accordance with the provisions of Sections 6.5 and 6.7, shall distribute to such
Participant all amounts credited to such Participant's Combined Account as
though he had retired.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any
reason other than death, Total and Permanent Disability or
retirement, the Administrator may direct the Trustee to segregate
the amount of the Vested portion of such Terminated Participant's
Combined Account and invest the aggregate amount thereof in a
separate, federally insured savings account, certificate of deposit,
common or collective trust fund of a bank or a deferred annuity. In
the event the Vested portion of a Participant's Combined Account is
not segregated, the amount shall remain in a separate account for
the Terminated Participant and share in allocations pursuant to
Section 4.4 until such time as a distribution is made to the
Terminated Participant.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained
in the employ of the Employer (upon the Participant's death, Total
and Permanent Disability or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct the
Trustee to cause the entire Vested portion of the Terminated
Participant's Combined Account to be payable to such Terminated
Participant. Any distribution under this paragraph shall be made in
a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited
61
<PAGE>
to, all notice and consent requirements of Code Section 411(a)(11)
and the Regulations thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a single
lump sum.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of
Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
1 25%
2 50%
3 75%
4 100%
(c) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the Plan
or upon any full or partial termination of the Plan, all amounts
credited to the account of any affected Participant shall become
100% Vested and shall not thereafter be subject to Forfeiture.
(d) The computation of a Participant's nonforfeitable
percentage of his interest in the Plan shall not be reduced as the
result of any direct or indirect amendment to this Plan. For this
purpose, the Plan shall be treated as having been amended if the
Plan provides for an automatic change in vesting due to a change in
top heavy status. In the event that the Plan is amended to change or
modify any vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period
may elect to have his nonforfeitable percentage computed under the
Plan without regard to such amendment. If a Participant fails to
make such election, then such Participant shall be subject to the
new vesting schedule. The Participant's election period shall
commence on the adoption date of the amendment and shall end 60 days
after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
62
<PAGE>
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(e) (1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he shall continue
to participate in the Plan in the same manner as if such termination
had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service,
and such Former Participant had received a distribution of his
entire Vested interest prior to his reemployment, his
forfeited account shall be reinstated only if he repays the
full amount distributed to him before the earlier of five (5)
years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the
first period of five (5) consecutive 1-Year Breaks in Service
commencing after the distribution. In the event the Former
Participant does repay the full amount distributed to him, the
undistributed portion of the Participant's Account must be
restored in full, unadjusted by any gains or losses occurring
subsequent to the Anniversary Date or other valuation date
coinciding with or preceding his termination. The source for
such reinstatement shall first be any Forfeitures occurring
during the year. If such source is insufficient, then the
Employer shall contribute an amount which is sufficient to
restore any such forfeited Accounts.
(3) If any Former Participant is reemployed 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:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service shall be
used for computing Years of Service for eligibility and
for vesting purposes only after he has been employed for
one (1) Year of Service following the date of his
reemployment with the Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the Plan
resulting from
63
<PAGE>
Employer contributions shall lose credits otherwise
allowable under (i) above if his 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;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance
attributable to pre-break service shall not be increased
as a result of post-break service;
(iv) If a Former Participant who has not had his Years
of Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes one (1) Year of Service
for eligibility purposes following his reemployment with
the Employer, he shall participate in the Plan
retroactively from his date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a 1-Year Break in Service disregarded
pursuant to (ii) above completes a Year of Service (a
1-Year Break in Service previously occurred, but
employment had not terminated), he shall participate in
the Plan retroactively from the first day of the Plan
Year during which he completes one (1) Year of Service.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one lump-sum payment in cash.
(b) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
distribution of any benefit. However, any election to defer
the receipt of benefits shall not apply with respect
64
<PAGE>
to distributions which are required under Section 6.5(c).
(2) Notice of the rights specified under this paragraph shall
be provided no less than 30 days and no more than 90 days
before the first day on which all events have occurred which
entitle the Participant to such benefit.
(3) Written consent of the Participant to the distribution
must not be made before the Participant receives the notice
and must not be made more than 90 days before the first day on
which all events have occurred which entitle the Participant
to such benefit.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent
to the distribution.
If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence less than 30
days after the notice required under Regulation 1.411(a)-11(c)
is given, provided that: (1) the Administrator clearly informs
the Participant that the Participant has a right to a period
of at least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (2) the
Participant, after receiving the notice, affirmatively elects
a distribution.
(c) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed to him not
later than April 1st of the calendar year following the later
of (i) the calendar year in which the Participant attains age
70 1/2 or (ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five (5) percent
owner" at any time during the five (5) Plan Year period ending
in the calendar year in which he attains age 70 1/2 or, in the
case of a Participant who
65
<PAGE>
becomes a "five (5) percent owner" during any subsequent Plan
Year, clause (ii) shall no longer apply and the required
beginning date shall be the April 1st of the calendar year
following the calendar year in which such subsequent Plan Year
ends. Notwithstanding the foregoing, clause (ii) above shall
not apply to any Participant unless the Participant had
attained age 70 1/2 before January 1, 1988 and was not a "five
(5) percent owner" at any time during the Plan Year ending
with or within the calendar year in which the Participant
attained age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
(d) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.
(e) If a distribution is made at a time when a Participant is
not fully Vested in his Participant's Account (employment has not
terminated) and the Participant may increase the Vested percentage
in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion of
the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at
the relevant time, D is the amount of distribution, and R is
the ratio of the account balance at the relevant time to the
account balance after distribution.
66
<PAGE>
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in
cash subject to the rules of Section 6.6(b).
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder.
If it is determined pursuant to Regulations that the distribution of
a Participant's interest has begun and the Participant dies before
his entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to Section 6.5 as
of his date of death. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations, then
his death benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth anniversary of
his date of death occurs.
However, the 5-year distribution requirement of the
preceding paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion shall be
distributed over a period not extending beyond the life expectancy
of such designated Beneficiary provided such distribution begins not
later than December 31st of the calendar year immediately following
the calendar year in which the Participant died. However, in the
event the Participant's spouse (determined as of the date of the
Participant's death) is his Beneficiary, the requirement that
distributions commence within one year of a Participant's death
shall not apply. In lieu thereof, distributions must commence on or
before the later of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died; or (2) December 31st of the calendar year in which the
Participant would have attained age 70 1/2. If the surviving spouse
dies before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the
spouse was the Participant.
67
<PAGE>
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is
to make a distribution on or as of an Anniversary Date, the distribution may be
made on such date or as soon thereafter as is practicable. However, unless a
Former Participant elects in writing to defer the receipt of benefits (such
election may not result in a death benefit that is more than incidental), the
payment of benefits shall occur not later than the 60th day after the close of
the Plan Year in which the latest of the following events occurs: (a) the date
on which the Participant attains the earlier of age 65 or the Normal Retirement
Age specified herein; (b) the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or (c) the date the Participant
terminates his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may 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, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
6.10 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any one
Plan Year up to the lesser of 100% of his Participant's Elective
Account valued as of the last Anniversary Date or other valuation
date or the amount necessary to satisfy the immediate and heavy
68
<PAGE>
financial need of the Participant. Any distribution made Pursuant to
this Section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately preceding the
date of distribution, and the Participant's Elective Account shall
be reduced accordingly. The determination of whether an immediate
and heavy financial need exists shall be based on all relevant facts
and circumstances including, but not limited to, any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution. A
need shall not be disqualified because it was reasonably foreseeable
or voluntarily incurred. Withdrawal under this Section shall be
authorized if the distribution is on account of:
(1) Expenses for medical care described in Code Section 213(d)
previously incurred by the Participant, his spouse, or any
of his dependents (as defined in Code Section 152) or
necessary for these persons to obtain medical care;
(2) The costs directly related to the purchase of a principal
residence for the Participant (excluding mortgage payments);
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition and related educational fees for the
next twelve (12) months of post-secondary education for the
Participant, his spouse, children, or dependents; or
(5) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator determines, based upon all relevant facts
and circumstances, that the amount to be distributed is not in
excess of the amount required to relieve the financial need and that
such need cannot be satisfied from other resources reasonably
available to the Participant. No distribution in an amount less than
$500 shall be made. For this purpose, the Participant's resources
shall be deemed to include those assets of his spouse and minor
children that are reasonably available to the Participant. A
distribution may be treated as necessary to satisfy a financial need
if the Administrator relies upon the Participant's representation
that the need cannot be relieved:
69
<PAGE>
(1) Through reimbursement or compensation by insurance or
otherwise;
(2) By reasonable liquidation of the Participant's assets, to
the extent such liquidation would not itself increase the
amount of the need;
(3) By cessation of elective deferrals and voluntary Employee
contributions under the Plan; or
(4) By other distributions or loans from the Plan or any other
qualified retirement plan, or by borrowing from commercial
sources on reasonable commercial terms, to the extent such
amounts would not themselves increase the amount of the need.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited solely to the Participant's total Deferred Compensation as
of the date of distribution, reduced by the amount of any previous
distributions pursuant to this Section.
(d) Any distribution made pursuant to this Section shall be
made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
6.11 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
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." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
6.12 DIRECT ROLLOVER
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any
70
<PAGE>
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
(b) For purposes of this Section the following definitions
shall apply:
(1) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary,
or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Code Section 401(a)(9); and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with
respect to employer securities).
(2) An eligible retirement plan is an individual retirement
account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a qualified
trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A distributee includes an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse
and the Employee's or former Employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in Code Section 414(p), are
distributees with regard to the interest of the spouse or
former spouse.
(4) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
71
<PAGE>
ARTICLE VII
AMENDMENT, TERMINATION, MERGERS AND LOANS
7.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. Any such amendment
shall be adopted by formal action of the Employer's board of
directors and executed by an officer authorized to act on behalf of
the Employer. However, any amendment which affects the rights,
duties or responsibilities of the Trustee and Administrator may only
be made with the Trustee's and Administrator's written consent. Any
such amendment shall become effective as provided therein upon its
execution. The Trustee shall not be required to execute any such
amendment unless the Trust provisions contained herein are a part of
the Plan and the amendment affects the duties of the Trustee
hereunder.
(b) No amendment to the Plan shall be effective if it
authorizes or permits 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 any purpose other than for the exclusive
benefit of the Participants or their Beneficiaries or estates; or
causes any reduction in the amount credited to the account of any
Participant; or causes or permits any portion of the Trust Fund to
revert to or become property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the
extent it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)
(6) protected benefits" the result of which is a further restriction
on such benefit unless such protected benefits are preserved with
respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected
benefits" are benefits described in Code Section 411(d)(6)(A),
early retirement benefits and retirement-type subsidies, and
optional forms of benefit.
7.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written
notice of such termination. Upon any full or partial termination,
all amounts credited to the affected Participants' Combined
72
<PAGE>
Accounts shall become 100% Vested as provided in Section 6.4 and
shall not thereafter be subject to forfeiture, and all unallocated
amounts shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or through the purchase of irrevocable nontransferable
deferred commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in accordance
with Section 7.1(c).
7.3 MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan and 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 benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c).
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans
to Participants and Beneficiaries under the following circumstances:
(1) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans shall not
be made available to Highly Compensated Employees in an amount
greater than the amount made available to other Participants and
Beneficiaries; (3) loans shall bear a reasonable rate of interest;
(4) loans shall be adequately secured; and (5) shall provide for
repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
73
<PAGE>
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date
on which such loan is made, over the outstanding balance of
loans from the Plan to the Participant on the date on which
such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
accrued benefit of the Participant under the Plan.
(c) Loans shall provide for level amortization with payments
to be made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at
the time the loan is made) as a principal residence of the
Participant shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years.
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will be
taken to preserve Plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of the Plan. Furthermore,
such Participant loan program may be modified or amended in
74
<PAGE>
writing from time to time without the necessity of amending this
Section.
ARTICLE VIII
MISCELLANEOUS
8.1 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 any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
8.2 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.
(b) This provision shall not apply to the extent a Participant
or Beneficiary is indebted to the Plan, as a result of a loan from
the Plan. 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 loan 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
loan indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the
Administrator that such loan indebtedness is to be so paid in whole
or part from his Participant's Combined Account. If the Participant
or Beneficiary does not agree that the loan indebtedness is a valid
claim against his Vested Participant's Combined Account, he shall be
entitled to a review of the validity of the claim in accordance with
procedures provided in Sections 2.12 and 2.13.
75
<PAGE>
(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. Further, to
the extent provided under a "qualified domestic relations order," a
former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
8.3 CONSTRUCTION OF PLAN
This Plan shall be construed and enforced according to the Act and
the laws of the Commonwealth of Pennsylvania, other than its laws respecting
choice of law, to the extent not preempted by the Act.
8.4 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
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.
8.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is resolved in
favor of the Trustee or Administrator, they 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 they shall have become liable.
8.6 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, Retired
Participants, or their Beneficiaries.
76
<PAGE>
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section 403(c)
(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so returned.
8.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act 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 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 Act Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, 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.
8.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
8.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or
77
<PAGE>
privilege contrary to the terms of any Contract which it issues hereunder, or
the rules of the insurer.
8.10 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 the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom 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
Trustee or Employer.
8.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
8.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under Section 4.1; and
shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, 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. 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 under the Plan 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 under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or
78
<PAGE>
depreciation in asset value. Any person or group may serve in more than one
Fiduciary capacity. In the furtherance of their responsibilities hereunder, the
"named Fiduciaries" shall be empowered to interpret the Plan and Trust and to
resolve ambiguities, inconsistencies and omissions, which findings shall be
binding, final and conclusive.
8.13 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.
8.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by
law for filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.1(d), any contribution by the Employer to
the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any
such deduction is disallowed, the Employer may, within one (1) year
following the disallowance of the deduction, demand repayment of
such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution may not
be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
8.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
79
<PAGE>
ARTICLE IX
PARTICIPATING EMPLOYERS
9.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
9.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof. However,
the assets of the Plan shall, on an ongoing basis, be available to
pay benefits to all Participants and Beneficiaries under the Plan
without regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited to
such Participant's Combined Account as well as his accumulated
service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants of
the Employer or Participating Employer by which the forfeiting
Participant was employed, except if the Forfeiture is for an
Employee whose Employer is an Affiliated Employer, then said
Forfeiture shall inure to the benefit of the Participants of those
Employers who are Affiliated Employers. Should an Employee of one
("First") Employer be transferred to an associated ("Second")
Employer which is an Affiliated Employer, such transfer shall not
cause his account balance (generated while an Employee of "First"
Employer) in any manner, or by any amount to be forfeited. Such
Employee's Participant Combined Account balance for all purposes of
the Plan, including length of service,
80
<PAGE>
shall be considered as though he had always been employed by the
"Second" Employer and as such had received contributions,
forfeitures, earnings or losses, and appreciation or depreciation in
value of assets totaling the amount so transferred.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
9.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this
Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
9.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
9.5 PARTICIPATING EMPLOYER'S CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall
be allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
81
<PAGE>
9.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall
be a Participating Employer hereunder shall only be by the written action of
each and every Participating Employer and with the consent of the Trustee where
such consent is necessary in accordance with the terms of this Plan.
9.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or
revoke its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 7.1(c). If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of the Trust. In no
such event shall any part of the corpus or income of the Trust as it relates to
such Participating Employer be used for or diverted to purposes other than for
the exclusive benefit of the Employees of such Participating Employer.
9.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
82
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed the day and year
first above written.
Signed, sealed, and delivered
in the presence of:
Webcraft Technologies, Inc.
/s/ M. [Illegible] By /s/ Thomas Gardner
- ------------------------------ ---------------------------
EMPLOYER
- ------------------------------
WITNESSES AS TO EMPLOYER
83
<PAGE>
Exhibit 4.7
WEBCRAFT TECHNOLOGIES, INC.
FIRST AMENDMENT TO EMPLOYEE ACCUMULATED SAVINGS TRUST
Webcraft Technologies, Inc., a corporation organized and existing under
the laws of the State of Delaware with offices at 2 Walnut Grove, Horsham, PA
("Employer") and the Webcraft Retirement Committee hereby amend the Employee
Accumulated Savings Trust ("EAST") pursuant to Section VII thereof as follows:
1. Article VI is hereby amended by the addition of the following paragraph
6.13.
6.13 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, upon receipt
of the written election of a Participant, the Administrator shall direct
the Trustee to transfer the Vested interest, if any, of such Participant
in his account to another trust forming part of a pension, profit sharing
or stock bonus plan of the Employer which meets and is represented by said
employer in writing as meeting the requirements of Code Section 401(a),
provided that the trust to which such transfers are made permits the
transfer to be made; and further provided that any such transfer shall not
eliminate or reduce a benefit protected under Code Section 411(d)(6) and
is conditioned on a voluntary, fully informed election by the Participant.
This Amendment shall become retroactively effective to the 1st day of
January, 1996.
Except as hereinabove amended said EAST is hereby ratified and confirmed
and shall continue in full force and effect.
IN WITNESS WHEREOF, the Webcraft Retirement Committee has hereunto set its
hand and has caused these presents to be executed as of the 6th day of November,
1996.
WITNESS: WEBCRAFT RETIREMENT COMMITTEE
/s/ Andrea Grey By: /s/ Ira M. Horowitz
- -------------------- --------------------------
Secretary
<PAGE>
Exhibit 4.8
SECOND AMENDMENT TO THE
WEBCRAFT EMPLOYEES ACCUMULATED SAVINGS TRUST
WHEREAS, Webcraft, Inc. (the "Corporation") has adopted and
maintains a defined contribution plan for the benefit of certain of its
employees entitled the "Employees Accumulated Savings Trust" (the "Plan");
WHEREAS, the Corporation desires to amend the Plan to provide
service credit to certain employees who were previously employed with Impco
Enterprises, Inc. ("IMPCO");
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the power of
amendment contained in Section 7.1 of the Plan, the Plan is hereby amended,
effective January 1, 1998, as follows:
1. Notwithstanding Section 1.29 of the Plan to the contrary, in the case
of any person who becomes an Employee as a result of the Corporation's
acquisition of assets from IMPCO, services performed for IMPCO shall be
considered services performed for the Corporation in determining Hours of
Service credited to such Employee under the Plan.
2. Section 9.6 is hereby deleted in its entirety.
IN WITNESS WHEREOF, the Webcraft Retirement Committee has hereunto
set its hand and has caused these presents to be executed as of the 4th day of
June, 1998.
WEBCRAFT RETIREMENT COMMITTEE
By: /s/ James R. Braun
-------------------------
Secretary
<PAGE>
Exhibit 4.9
THIRD AMENDMENT TO THE
WEBCRAFT TECHNOLOGIES, INC. EMPLOYEES
ACCUMULATED SAVINGS TRUST
WHEREAS, Webcraft, Inc. (the "Corporation") has adopted
and maintains a defined contribution plan for the benefit of
certain of its employees entitled the "Webcraft Technologies,
Inc. Employees Accumulated Savings Trust" (the "Plan"); and
WHEREAS, the Corporation desires to amend the Plan in certain
respects.
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the power of
amendment contained in Section 7.1 of the Plan, the Plan hereby is amended,
effective August 7, 1998, unless otherwise designated herein, as follows:
1. The name of the Plan hereby is amended such that the Plan is
designated the "Webcraft, Inc. Employees Accumulated Savings Trust."
2. The phrase "Webcraft Technologies, Inc." wherever it appears
therein hereby is replaced with the phrase "Webcraft, Inc."
3. Section 1.8 hereby is amended, effective January 1, 1997, in
its entirety to read as follows:
"Compensation" with respect to any Participant means
such Participant's wages, salaries, fees for professional
services, commissions, bonuses and similar payments made by an
Employer (without regard to whether or not an amount is paid
in cash) for personal services actually rendered in the course
of employment with an Employer maintaining the Plan to the
extent that the amounts are includible in gross income, except
that compensation shall exclude (a)(1) contributions made by
an Employer to a plan of deferred compensation to the extent
that, such contributions are not includible in the gross
income of the Participant for the taxable year in which
contributed, (2) Employer contributions made on behalf of the
Participant to a simplified employee pension plan described in
Code Section 408(k) to the extent such contributions are
excludable from the Participant's gross income, (3) any
distributions from a plan of deferred compensation; (b)
amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; (c) amounts
realized from the sale, exchange or other disposition of stock
acquired under an incentive or other qualified stock option;
and (d) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of any
annuity contract described in Code Section 403(b) (whether or
not the contributions are actually excludable from the gross
income of the Participant).
<PAGE>
For purposes of this Section, the determination of
Compensation shall be made by:
(a) excluding severance pay,
(b) excluding long-term incentive plan payments,
(c) including commissions and bonuses earned prior
to termination of employment but not paid until
after the date of termination, and
(d) including amounts which are contributed by the
Employer pursuant to a salary reduction agreement
which are not includible in the gross income of the
Participant under Code Section 125, 402(e)(3)and
404(h), 403(b) or 454, and Employee contributions
described in Code Section 414(h)(2) that are treated
as Employer contributions.
For a Participant's initial year of participation,
Compensation shall be recognized as of such Participant's
effective date of participation pursuant to Section 3.3.
Compensation in excess of (I) $160,000 for the Plan
Year beginning January 1, 1997 and (II) the dollar amount
prescribed by Code Section 401(a)(17) (as adjusted for
increases in the cost-of-living) for each subsequent Plan Year
shall not be taken into account for any purposes under the
Plan.
If, in connection with the adoption of any amendment
to the Plan, the definition of Compensation has been modified,
then, for Plan Years prior to the Plan Year as of which such
amendment becomes effective, Compensation means compensation
determined pursuant to the Plan in effect prior to the
effective date of the amendment.
4. Section 1.14 hereby is amended in its entirety to read as
follows:
"Employee" means an individual whose relationship
with the Employer or an Affiliated Employer is, under common
law, that of an employee. Notwithstanding the foregoing, no
individual who renders services for the Employer or an
Affiliated Employer shall be considered an Employee for
purposes to the Plan if such individual renders such services
pursuant to (i) an agreement providing that such services are
to be rendered by the individual as an independent contractor,
(ii) an agreement with an entity, including a leasing
organization within the meaning of Code Section 414(n)(2),
that is not the Employer or an Affiliated
2
<PAGE>
Employer, or (iii) an agreement that contains a waiver of
participation in the Plan.
5. Effective July 1, 1998, the following paragraph hereby is
added at the end of Section 1.29:
Notwithstanding any other provision within this
Section 1.29, in the case of any person who becomes an
Employee as a result of the Employer's acquisition of
membership units of ColorStream Technologies, L.L.C.
("ColorStream"), services performed for ColorStream shall be
considered services performed for the Employer in determining
Hours of Service credited to such Employee under the Plan.
6. Section 1.34 hereby is deleted.
7. The second sentence of Section 1.55 hereby is amended to read
as follows:
All Affiliated Employers shall be taken into account as a
single employer.
8. Section 2.4 hereby is amended in its entirety to read as
follows:
The Employer shall appoint one or more
Administrators. If the Employer appoints a committee to be an
Administrator, then the committee shall appoint individuals to
serve as the members of the committee. Any person, including,
but not limited to, the Employees of an Employer, shall be
eligible to serve as an Administrator or a member of a
committee serving as an Administrator. Any individual so
appointed shall signify his acceptance by filing written
acceptance with the Employer. An individual may resign by
delivering his written resignation to the Employer or may be
removed by the Employer by delivery of written notice of
removal, to take effect at a date specified therein, or upon
delivery to the individual if no date is specified.
The Employer, upon the resignation or removal of an
Administrator or an individual serving as a member of a
committee serving as an Administrator, shall promptly
designate in writing a successor. If the Employer does not
appoint an Administrator, the Employer will function as the
Administrator.
9. Section 2.5 hereby is amended to add the following sentence at
the end thereof:
In the case of a committee serving as an
Administrator, the committee members may allocate amongst
themselves or delegate to another any of their
responsibilities under the Plan.
3
<PAGE>
10. Section 2.6 hereby is amended to delete clause (h) in the last
sentence thereof and to re-letter the remaining clauses appropriately to take
into account the deletion of clause (h).
11. Section 2.11 hereby is amended in its entirety to read as
follows:
Except where there has been an allocation and
delegation of administrative authority pursuant to Section
2.5, if there shall be more than one Administrator or if a
committee serves as an Administrator, the Administrator or
committee members, as the case may be, shall act by a majority
of their number, but may authorize one or more of them to sign
all papers, documents and instruments on the Administrator(s)
behalf.
12. Section 3.3 hereby is amended to read as follows:
(a) An Eligible Employee shall become a Participant
effective as of the earlier of the first day of the Plan Year
or the first day of the seventh month of such Plan Year
coinciding with or next following the date such Employee met
the eligibility requirements of Section 3.1, except that an
Employee who was a participant in the Webcraft Employee
Savings Trust immediately prior to becoming an Eligible
Employee shall become a Participant in the Plan on the date
such Employee becomes an Eligible Employee.
(b) If a Participant is transferred from one Employer
to another Employer or from an Employer to an Affiliate that
is not an Employer, then such transfer shall not terminate the
Participant's participation in the Plan and the Participant
shall continue to participate in the Plan until an event
occurs that would have entitled the Participant to a complete
distribution of the Participant's vested interest in his or
her accounts under the Plan had the Participant continued to
be employed by an Employer until the occurrence of such event.
Nevertheless, a Participant shall not be entitled to make
Elective Contributions (and thus receive allocations of
Matching Contributions) or rollover contributions to the Plan
during any period of employment by an Affiliate that is not an
Employer, and periods of employment with an Affiliate that is
not an Employer shall be taken into account only (i) for
purposes of determining when an individual is eligible to
participate in the Plan, (ii) for measuring Years of Service
and (iii) for purposes of determining whether a Participant
terminated or retired from employment.
4
<PAGE>
13. The third sentence of Section 4.1(b) hereby is amended to read
as follows:
During a Plan Year, the Administrator may increase the
Employer matching contribution percentage to a percentage not
exceeding 50%.
14. The first sentence of Section 4.2 hereby is amended to read as
follows:
Each Participant may elect to defer his Compensation
which would have been received in the Plan Year, but for the
deferral election in any whole percentage between 1% and 17%.
15. Section 4.4 hereby is amended to delete the first paragraph of
subsection (k) thereof.
16. Section 4.5 hereby is amended, effective January 1, 1997, to
delete subsection (c) thereof and to re-letter appropriately the remaining
subsections thereof.
17. Section 4.7 hereby is amended, effective January 1, 1997, to
delete subsection (d) thereof and to re-letter appropriately the remaining
subsections to take into account the deletion of subsection (d).
18. Section 4.8 hereby is amended, effective January 1, 1997, to
delete subsection (f) thereof and to re-letter appropriately the remaining
subsections to take into account the deletion of subsection (f).
19. Section 4.12 hereby is amended to substitute the following for
subsection (a) thereof:
(a) In order to allow Participants the opportunity to
increase their retirement income, each Participant may elect
to contribute to the Plan on an after-tax basis a portion of
his Compensation earned while a Participant under this Plan in
any whole percentage between 1% and 17%, provided that, when
considered together with the Participant's deferral election
made pursuant to Section 4.2, such aggregate percentage does
not exceed 17%. The amount contributed shall be paid to the
Trustee within a reasonable period of time but in no event
later than ninety (90) days after the contribution is withheld
from the Participant's pay check. The balance in each
Participant's Voluntary Contribution Account attributable to
such contributions shall be fully Vested at all times and
shall not be subject to Forfeiture for any reason.
20. Section 4.12 hereby is further amended to add the phrase "at
the times determined by the Administrator from time to time" immediately after
the word "thereon" as it appears in the first sentence of subsection (b)
thereof.
5
<PAGE>
21. Section 4.13(a) hereby is amended to read as follows:
(a) The Administrator, in his sole discretion, may
determine that all Participants be permitted to direct the
Trustee as to the investment of all or a portion of the
interest in any one or more of their individual account
balances. If such authorization is given, Participants may,
subject to a procedure established by the Administrator and
applied in a uniform nondiscriminatory manner, direct the
Trustee in writing, or in such other manner designated by the
Administrator, to invest any portion of their account
permitted by the Administrator in specific assets, specific
funds or other investments permitted under the Plan and any
directed investment procedure. That portion of the account of
any Participant so directing will thereupon be considered a
Directed Investment Account, which shall not share in Trust
Fund earnings.
22. Section 5.1 hereby is amended to read as follows:
The Administrator shall determine the dates, each
date herein called "valuation date," on which the net worth of
the assets comprising the Trust Fund as it exists on the
"valuation date" shall be determined.
23. The first sentence in Section 5.2 hereby is amended to read as
follows:
Except as otherwise provided in any agreement with
respect to the Trust Fund, 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."
24. Section 6.1 hereby is amended by substituting the following
for the last sentence thereof:
The Vested balance of the Aggregate Account of a
Participant who has terminated his employment with the
Employer and Affiliated Employers shall be distributed in
accordance with Section 6.5 as soon as practicable after the
end of the Plan Year in which his Normal Retirement Date
occurs. Except as required by law, a Participant who has
attained his Normal Retirement Date and who is employed by the
Employer or Affiliated Employer shall not be entitled to a
distribution of his Vested interest in his Aggregate Account.
25. Section 6.5 hereby is amended (i) effective January 1, 1998,
by substituting the dollar amount "$5,000" for the dollar amount "$3,500" as it
appears in subsection (b) thereof, and (ii) effective January 1, 1997, by
substituting the following paragraph (1) for paragraph (1) of subsection (c)
thereof:
6
<PAGE>
(1) A Participant's benefits shall be distributed to
the Participant not later than 60 days after the end of the
Plan Year which contains the later of the Participant's 65th
birthday and the date of the Participant's termination of
employment, provided, however, that in the case of a
Participant who is a "five (5) percent owner" at any time
during the five (5) Plan Year period ending in the calendar
year in which the Participant attains age 70 1/2 or, in the
case of a Participant who becomes a "five (5) percent owner"
during any subsequent Plan Year, the required beginning date
of such Participant's distribution shall be the April 1st of
the calendar year following the calendar year in which the
Participant attains age 70 1/2. Alternatively, distributions
to a Participant must begin no later than the applicable April
1st as determined under the preceding sentence and must be
made over a period certain measured by the life expectancy of
the Participant (or the life expectancies of the Participant
and his designated Beneficiary) in accordance with
Regulations.
26. Section 6.12 hereby is amended to add the phrase "that is at
least equal to $200 (or such other amount determined from time to time by the
Administrator)" immediately after the words "eligible rollover distribution" as
they appear in subsection (a) thereof .
27. Section 7.1(a) hereby is amended to read as follows:
(a) The Employer shall have the right at any time to
amend the Plan. Any such amendment shall be adopted by formal
action of the Employer's board of directors and executed by an
officer authorized to act on behalf of the Employer. Any such
amendment shall become effective as provided therein upon its
execution. Notwithstanding the foregoing sentences of this
subsection (a), (i) the Employer may delegate its right to
amend the Plan to the Administrator or other person and (ii)
an amendment may become effective on a retroactive basis to
the extent permitted under the law.
28. Section 7.4 hereby is amended in its entirety to read as
follows:
(a) The Administrator shall establish and administer
a written loan program pursuant to which any Participant who
is an Employee (or party-in-interest as required by the U.S.
Department of Labor) may request to borrow funds from the
Plan.
(b) The loan program may be modified or amended in
writing from time to time without the necessity of amending
this Section.
29. Section 8.5 hereby is amended in its entirety to read as
follows:
7
<PAGE>
In the event any claim, suit, or proceeding is
brought regarding the Plan to which the Administrator may be a
party, and such claim, suit, or proceeding is resolved in
favor of the Administrator, the Administrator (and the members
of any committee serving as Administrator) 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 they shall have become liable.
30. Section 8.8 hereby is amended in its entirety to read as
follows:
Neither any Employer nor any successor to an Employer
shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to
make payments provided by any such Contract, or for the action
or omission of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
31. Section 8.9 hereby is deleted and the remaining Sections of
Article VIII hereby are renumbered appropriately to take into account the
deletion of Section 8.9.
32. Section 8.11 (as renumbered above) hereby is amended in its
entirety to read as follows:
The "named Fiduciaries" of this Plan are (1) the
Employer and (2) the Administrator. The named Fiduciaries
shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given
them under the Plan. In general, the Employer shall have the
sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and
method"; and to amend or terminate, in whole or in part, the
Plan. The Administrator shall have the sole responsibility for
the administration of the Plan, which responsibility is
specifically described in the Plan. 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 under the Plan. 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. In the furtherance of
their responsibilities hereunder, the "named Fiduciaries"
shall be empowered to interpret the Plan and Trust and to
resolve ambiguities, inconsistencies and omissions, which
findings shall be binding, final and conclusive.
33. Section 9.2 hereby is amended (i) to delete subsections (c),
(d) and (e) thereof and (ii) to add the following new subsections (c) and (d):
8
<PAGE>
(c) All rights and values forfeited by termination of
employment shall inure only to the benefit of the Participants
of the Employer by which the forfeiting Participant was
employed.
(d) Any expenses of the Trust which are to be paid by
the Employer and the Participating Employers or borne by the
Trust Fund shall be paid by each Participating Employer in the
same proportion that the total amount standing to the credit
of all Participants employed by such Employer bears to the
total standing to the credit of all Participants.
34. Section 9.5 hereby is deleted and the remaining sections of
Article IX are appropriately renumbered to take into account the deletion of
Section 9.5.
35. Section 9.5 (as renumbered above) hereby is amended to delete
the words "and with the consent of the Trustee where such consent is necessary
in accordance with the terms of this Plan".
36. Section 9.6 (as renumbered above) hereby is amended in its
entirety as follows:
Any Participating Employer shall be permitted to
discontinue or revoke its participation in the Plan. The
Employer shall direct the Trustee to transfer, deliver and
assign Contracts and other Trust Fund assets allocable to the
Participants employed by such Participating Employer to such
new trustee as shall have been designated by such
Participating Employer, in the event that it has established a
separate pension plan for its Employees, provided however,
that no such transfer shall be made if the result is the
elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 7.1(c). If no successor
is designated, the Employer shall direct the Trustee to retain
such assets for the Employees of said Participating Employer
pursuant to the provisions of the Trust. In no such event
shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted
to purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
37. The following Article X hereby is added to the Plan:
ARTICLE X
PARTICIPANTS' STOCKHOLDER RIGHTS
10.1 VOTING SHARES OF THE COMMON STOCK OF BIG FLOWER HOLDINGS, INC.
Pursuant to the terms of the trust agreement between the
Trustee and the Employer, the Trustee shall vote, in person or by proxy, shares
of common stock of Big Flower Holdings, Inc. held by the Trustee and represented
by units which are credited to a Participant's
9
<PAGE>
account in accordance with instructions timely obtained from such Participant.
Each Participant shall be entitled to give voting instructions with respect to
the number of shares of common stock of Big Flower Holdings, Inc. represented by
units credited to his account as of the valuation date coinciding with or
immediately preceding the shareholder record date for such vote. Written notice
of any meeting of stockholders of Big Flower Holdings, Inc., or other occasion
for the exercise of voting rights, and a request for voting instructions shall
be given by the Administrator or the Trustee, at such time and in such manner as
the Administrator shall determine, to each Participant entitled to give
instructions for voting shares of common stock of Big Flower Holdings, Inc. at
such meeting or occasion. The Employer shall establish and pay for a means by
which a Participant can expeditiously deliver to the Administrator voting
instructions addressed to the Trustee. All shares of common stock of Big Flower
Holdings, Inc. represented by units credited to Participants' accounts for which
no timely voting instructions are received, to the extent permitted by law,
shall be voted by the Trustee in the same proportions as shares represented by
units credited to Participants' accounts for which timely instructions are
received. The Trustee, to the extent permitted by law, shall vote any shares of
common stock of Big Flower Holdings, Inc. represented by units not credited to
Participants' accounts in the same proportions as shares represented by units
credited to Participants' accounts for which timely instructions are received.
10.2 TENDER OFFERS
(a) Rights of Participants. In the event a tender or
exchange offer is made to the shareholders of Big Flower
Holdings, Inc. to transfer all or a portion of their shares of
common stock of Big Flower Holdings, Inc. in return for
valuable consideration, including but not limited to, offers
regulated by section 14(d) of the Securities Exchange Act of
1934, as amended, the Trustee shall respond to such tender or
exchange offer in respect of shares of common stock of Big
Flower Holdings, Inc. held by the Trustee which are
represented by units credited to a Participant's account in
accordance with instructions timely obtained from such
Participant. Each Participant shall be entitled to give
instructions with respect to tendering or withdrawing from
tender such shares. A Participant shall not be limited in the
number of instructions to tender or withdraw from tender which
he can give, but a Participant shall not have the right to
give instructions to tender or withdraw from tender after a
reasonable time established by the Trustee pursuant to
subsection (c) below. Except as otherwise required by law, the
Trustee shall not tender any shares of common stock of Big
Flower Holdings, Inc. represented by units credited to
Participants' accounts for which no timely instructions are
received. The Trustee, to the extent permitted by law, shall
respond to any such tender or exchange offer in respect of all
shares of common stock of Big Flower Holdings, Inc.
represented by units not credited to Participants' accounts in
the same proportions as shares represented by units credited
to Participants' accounts for which timely instructions are
received.
10
<PAGE>
(b) Duties of the Administrator. Within a reasonable
time after the commencement of a tender or exchange offer, the
Administrator or the Trustee shall provide to each
Participant:
(1) the offer to purchase or exchange as
distributed by the offeror to the shareholders of
Big Flower Holdings, Inc.;
(2) a statement of the shares of common stock of
Big Flower Holdings, Inc. represented by units
credited to his account; and
(3) directions as to the means by which a
Participant can give instructions with respect
to the tender or exchange offer.
The Employer shall establish and pay for a means by which a
Participant can expeditiously deliver to the Administrator
instructions addressed to the Trustee with respect to a tender
or exchange offer. The Administrator shall transmit to the
Trustee the aggregate numbers of shares to be tendered or
withheld from tender representing instructions of
Participants. The Administrator, at its election, may engage
an agent to receive instructions from Participants and
transmit them to the Trustee.
(c) Duties of the Trustee. The Trustee shall follow
the instructions of the Participants with respect to the
tender or exchange offer as transmitted to the Trustee. The
Trustee may establish a reasonable time, taking into account
the time restrictions of the tender or exchange offer, after
which it shall not accept instructions of Participants.
10.3 APPLICABILITY
In the case of a Beneficiary of a deceased Participant, or an
alternate payee under a qualified domestic relations order for whom an account
has been established under this Plan, such Beneficiary or alternate payee, as
the case may be, shall have the same rights and shall otherwise be treated in
the same manner for purposes of this Article X as the Participant on whose
behalf the account initially was established.
10.4 CONFIDENTIALITY
Notwithstanding anything contained herein to the contrary, all
instructions and directions received by the Trustee from Participants pursuant
to this Article X shall be maintained by the Trustee as confidential and shall
not be disclosed to any person, including but not limited to, any Employer or
Affiliated Employer, or any Employee, officer or director of any Employer or
Affiliated Employer; provided, however, that such instructions and directions
may be relayed by the Trustee to a recordkeeper, auditor or other person who
regularly provides services to the Plan.
11
<PAGE>
IN WITNESS WHEREOF, the Corporation has hereunto set its hand
and has caused these presents to be executed as of the 7th day of August, 1998.
WEBCRAFT, INC.
By: /s/ WILLIAM S. HOUGH
Title: Senior VP Human Resources
12
<PAGE>
[Letterhead]
Exhibit 5
August 7, 1998
Big Flower Holdings, Inc.
3 East 54th Street
New York, New York 10022
Re: 500,000 Shares of Common Stock,
$.01 par value
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") being filed by Big Flower Holdings, Inc. (the
"Company") with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), relating to the registration of
500,000 shares of Common Stock, $.01 par value (the "New Shares"), of the
Company.
We are familiar with the proceedings to date with respect to
the proposed issuance and sale of the New Shares and have examined such records,
documents and questions of law, and satisfied ourselves as to such matters of
fact, as we have considered relevant and necessary as a basis for this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under
the laws of the State of Delaware.
2. The New Shares will be legally issued, fully paid and
non-assessable when (i) the Registration Statement, as finally amended, shall
have become effective under the Securities Act; (ii) the Company's Board of
Directors or a duly authorized committee thereof shall have duly adopted final
resolutions authorizing the issuance and sale of the New Shares as contemplated
by the Registration Statement;
<PAGE>
SIDLEY & AUSTIN CHICAGO
Big Flower Holdings, Inc.
August 7, 1998
Page 2
and (iii) certificates representing the New Shares shall have been duly
executed, countersigned and registered and duly delivered to the purchasers
thereof against payment of the agreed consideration therefor.
We do not find it necessary for the purposes of this opinion
to cover, and accordingly we express no opinion as to, the application of the
securities or blue sky laws of the various states to the sale of the New Shares.
We hereby consent to the filing of this opinion as an Exhibit
to the Registration Statement and to all references to our firm included in or
made a part of the Registration Statement.
Very truly yours,
/s/ SIDLEY & AUSTIN
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Big Flower Holdings, Inc. on Form S-8 of our report dated February 9, 1998
appearing in the Annual Report on Form 10-K of Big Flower Holdings, Inc. for the
year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Stamford, Connecticut
August 3, 1998
<PAGE>
Exhibit 24
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ EDWARD T. REILLY June 25, 1998
- ----------------------------------
Edward T. Reilly
President, Chief Executive Officer
and Director
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ PETER G. DIAMANDIS June 25, 1998
- ----------------------------------
Peter G. Diamandis
Director
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ ROBERT M. KIMMITT June 25, 1998
- ----------------------------------
Robert M. Kimmitt
Director
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ JOAN D. MANLEY June 25, 1998
- ----------------------------------
Joan D. Manley
Director
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ NEWTON N. MINOW June 25, 1998
- ----------------------------------
Newton N. Minow
Director
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ RICHARD L. RITCHIE June 25, 1998
- ----------------------------------
Richard L. Ritchie
Executive Vice President
and Chief Financial Officer
<PAGE>
BIG FLOWER HOLDINGS, INC.
The undersigned hereby constitutes R. Theodore Ammon, Edward T. Reilly,
Richard L. Ritchie and Mark A. Angelson, and each of them, jointly and
severally, his or her lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, including, but not limited to, that listed
below, to execute and file, or cause to be filed, with exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission (hereinafter referred to as the "Commission") one or more
registration statements on Form S-8 for the purpose of registering (or removing
from registration) under the Securities Act of 1933, as amended (the "Securities
Act"), common stock of Big Flower Holdings, Inc. for use in connection with the
employee benefit plans listed below to be maintained by Big Flower Holdings,
Inc. or its subsidiaries (together with associated interests in the plans, if
any) and amendments thereto (including post-effective amendments), and all
matters required by the Commission in connection with such registration
statements under the Securities Act (collectively "Filings"), granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, and
each of them or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. The foregoing Power of Attorney relates to Filings with
respect to the following employee benefit plans:
Webcraft Employee Savings Trust
Webcraft, Inc. Employee Accumulated Savings Trust
/s/ THEODORE AMMON June 25, 1998
- ----------------------------------
R. Theodore Ammon
Chairman of the Board
and Director
