________________________________________Registration No.333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8 REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
U.S. Industries, Inc. (Formerly USI, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 22-3568449
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
101 Wood Avenue South, P.O. Box 169, Iselin, New Jersey 08830-0169
(Address of Principal Executive Offices) (Zip Code)
USI RETIREMENT SAVINGS & INVESTMENT PLAN,
USI CORPORATE OFFICE RETIREMENT SAVINGS & INVESTMENT PLAN,
THE HURON RETIREMENT SAVINGS & INVESTMENT PLAN FOR EMPLOYEES
REPRESENTED BY UAW LOCAL 213,
THE AMES GROUP RETIREMENT SAVINGS & INVESTMENT PLAN FOR EMPLOYEES
REPRESENTED BY USAW LOCAL 7958,
O. AMES CO. RETIREMENT SAVINGS PLAN,
ZURN RETIREMENT SAVINGS PLAN, and
ELJER TAX REDUCTION INVESTMENT PLAN
(Full title of the plans)
GEORGE H. MACLEAN
Senior Vice President, General Counsel and Secretary
U.S. Industries, Inc.
101 Wood Avenue South, P.O. Box 169, Iselin, New Jersey 08830-0169
(Name and address of agent for service)
(732) 767-0700
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Proposed Maxi- Proposed Maxi-
Securities mum Offering mum Aggregate Amount of
to be Amount to be Price Per Offering Registration
Registered Registered Share (2) Price Fee
Common Stock,
par value $.01 1,089,670 $27.53 $ 30,000,000. $ 8,850.
per share (1)
_____________________________________________________________________
(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 employee benefit
plans described herein.
(2) Determined in accordance with Rule 457(c) based on the average of
the high and low sales prices on the New York Stock Exchange on
June 10, 1998. <PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference.
The following documents previously filed by U.S. Industries,
Inc., a Delaware corporation formerly named USI, Inc., (the
"Registrant") with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are incorporated herein by reference:
(1) the description of the Common Stock of the Registrant
contained in Registrant's Current Report filed on Form 8-K as filed
with the Commission pursuant to the Exchange Act on June 10, 1998,
including any amendment or report filed for the purpose of updating
such description; and
(2) the Joint Proxy Statement/Prospectus dated May 13, 1998
(except with regard to the Opinions and Consents of Weil, Gotshal &
Manges LLP and Jones, Day, Reavis & Pogue and the Consents of BT
Wolfensohn and Credit Suisse First Boston including any references
thereto) included in the Registration Statement on Form S-4 of
Registrant, as amended, (Registration No.333-47101).
The following documents previously filed by U.S. Industries,
Inc., a Delaware corporation ("USI") with the Commission pursuant to
the Exchange Act are incorporated herein by reference:
(1) the USI Annual Report on Form 10-K for the fiscal year
ended September 30, 1997, as amended by a Form 10-K/A (Amendment
No.1) dated May 11, 1998;
(2) the USI Quarterly Reports on Form 10-Q for the quarters
ended (i) December 31 1997, as amended by a Form 10-Q/A (Amendment
No.1) dated May 11, 1998 and (ii) March 31, 1998; and
(3) the USI Current Reports on Form 8-K dated December 18,
1997, February 18, 1998 and May 19, 1998.
The following documents previously filed by Zurn Industries,
Inc., a Pennsylvania corporation ("Zurn") with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
(1) the Zurn Annual Report on Form 10-K for the year ended
March 31, 1997;
(2) the Zurn Quarterly Reports on Form 10-Q for the quarters
ended June 30, 1997, September 30, 1997 and December 31, 1997; and
(3) the Zurn Current Reports on Form 8-K/A dated April 7, 1997
and on Form 8-K dated January 30, 1998 and February 16, 1998.
The following documents previously filed by certain of the
Plans with the Commission pursuant to the Exchange Act are
incorporated herein by reference:
(1) the Annual Report of the USI Retirement Savings &
Investment Plan (formerly the U.S. Industries, Inc. Retirement
Savings & Investment Plan and herein renamed the USI Corporate
Office Retirement Savings & Investment Plan) on Form 11-K for the
year ended December 31, 1996, as filed June 27, 1997;
(2) the Annual Report of the O. Ames Co. Retirement Savings
Plan on Form 11-K for the year ended December 31, 1996, as filed
June 27, 1997;
(3) the Annual Report of the Zurn Retirement Savings Plan on
Form 11-K for the year ended December 31, 1997, as filed
June 11, 1997;
(4) the Annual Report of the Zurn/Nepco Retirement Savings
Plan (merged with and into the Zurn Retirement Savings Plan
effective January 1, 1998) on Form 11-K for the year ended December
31, 1997, as filed June 11, 1997; and
(5) the Annual Report of the Eljer Tax Reduction Investment
Plan on Form 11-K for the year ended December 31, 1997, as filed
June 11, 1997.
All documents filed by Registrant or the Plans pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act 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 in this Registration Statement and to be part thereof
from the date of filing such document.
Any statement in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this Registration Statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Registration Statement.
Item 6. Indemnification of Directors and Officers.
Registrant is incorporated in Delaware. Under Section 145 of
the General Corporation Law of the State of Delaware, a Delaware
corporation has the power, under specified circumstances, to
indemnify its directors, officers, employees and agents in
connection with actions, suits or proceedings brought against them
by a third party or in the right of the Corporation, by reason of
the fact that they were or are such directors, officers, employees
or agents, against expenses incurred in any action, suit or
proceeding. Article XIV of Registrant's By-Laws provides for
indemnification of directors and officers to the fullest extent
permitted by the General Corporation Law of the State of Delaware,
as amended from time to time.
Section 102(b)(7) of the General Corporation Law of the State
of Delaware provides that a certificate of incorporation may contain
a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director provided that such
provision shall not eliminate or limit the liability of a director
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on,
capital stock) of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit. Article VII of Registrant's
Certificate of Incorporation contains such a provision and further
provides that if Delaware law is amended thereafter to authorize
corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of
Registrant shall be eliminated or limited to the fullest extent
permitted by the Delaware law, as so amended.
Registrant's By-Laws authorize Registrant to purchase insurance
for directors, officers and employees of Registrant, and persons who
serve at the request of Registrant as directors, officers, members,
employees, fiduciaries or agents of other enterprises against any
liability asserted against such person and incurred by such person
in any capacity, or arising out of such person's status as such,
whether or not Registrant would have the power or the obligation to
indemnify such persons against such liability under the By-Laws.
Registrant intends to maintain insurance coverage for its directors
and officers under a directors and officers liability insurance
policy as well as insurance coverage to reimburse Registrant for
potential costs of its indemnification of directors and officers.
Item 8. Exhibits.
4.1 Amended and Restated Certificate of
Incorporation of Registrant incorporated by
reference to Exhibit 4.1 of Registrant's
Registration Statement on Form S-8 pertaining to
U.S. Industries, Inc. Restricted Stock Plan et
al. as filed June 11, 1998.
4.2 Amended and Restated By-Laws of Registrant incorporated by
reference to Exhibit 4.2 of Registrant's Registration
Statement on Form S-8 pertaining to U.S. Industries, Inc.
Restricted Stock Plan et al. as filed June 11, 1998.
4.3 Specimen form of certificate representing shares of Common
Stock of Registrant incorporated by reference to Exhibit
4.1 to Form 10 of U.S. Industries, Inc. as filed April 20,
1995.
4.4(a) USI Retirement Savings & Investment Plan.
4.4(b) USI Corporate Office Retirement Savings &
Investment Plan.
4.4(c) The Huron Retirement Savings & Investment Plan For
Employees Represented by UAW Local 213.
4.4(d) The Ames Group Retirement Savings & Investment Plan For
Employees Represented by USAW Local 7958.
4.4(e) O. Ames Co. Retirement Savings Plan.
4.4(f) Zurn Retirement Savings Plan.
4.4(g) Eljer Tax Reduction Investment Plan.
5.1 Registrant undertakes to submit the Plans and
any amendments thereto to the Internal Revenue
Service ("IRS") in a timely manner and will make
all changes required by the IRS in order to
qualify the Plans.
23.1 Consent of Ernst & Young LLP, independent
auditors, New York, New York.
23.2 Consent of Price Waterhouse LLP, independent accountants,
Morristown, New Jersey.
23.3 Consent of Ernst & Young LLP, independent auditors,
Dallas, Texas.
23.4 Consent of Arthur Andersen LLP, independent accountants,
Dallas, Texas.
23.5 Consent of Weyer, Weyer & Associates, A.C., independent
auditors, Parkersburg, West Virginia.
23.6 Consent of The Pashke Group, independent auditors, Erie,
Pennsylvania.
24.1 Power of Attorney.
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 fact or event 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: (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) of this section do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and 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 Securities Exchange Act of 1934 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 Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) 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.
(h) 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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Iselin, New Jersey
on June 11, 1998.
U. S. Industries, Inc.
(Registrant)
By: /s/ George H. MacLean
George H. MacLean, Senior
Vice President, General
Counsel and Secretary
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
* Chairman of the June 11, 1998
David H. Clarke Board and Chief
Executive Officer
(Principal Executive
Officer)
* Director, President June 11, 1998
John G. Raos and Chief Operating
Officer
* Director, Senior Vice June 11, 1998
Frank R. Reilly President and Chief
Financial Officer
(Principal Financial
Officer)
* Director June 11, 1998
Brian C. Beazer
* Director June 11, 1998
John J. McAtee, Jr.
* Director June 11, 1998
The Hon. Charles H. Price II
* Director June 11, 1998
Sir Harry Solomon
* Director June 11, 1998
Royall Victor III
* Director June 11, 1998
Mark Vorder Bruegge
* Director June 11, 1998
Robert R. Womack
* Director June 11, 1998
William E. Butler
* Vice President- June 11, 1998
James O'Leary Corporate Controller
(Principal Accounting
Officer)
* By /s/ George H. MacLean June 11, 1998
George H. MacLean
Attorney-in-fact
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
Benefits Administration Committee has duly caused this Registration
Statement to be signed on behalf of the Plans by the undersigned,
thereunto duly authorized, in the City of Iselin, and State of New Jersey
on June 11, 1998.
USI RETIREMENT SAVINGS & INVESTMENT PLAN,
USI CORPORATE OFFICE RETIREMENT SAVINGS & INVESTMENT
PLAN,
THE HURON RETIREMENT SAVINGS & INVESTMENT PLAN FOR
EMPLOYEES REPRESENTED BY UAW LOCAL 213,
THE AMES GROUP RETIREMENT SAVINGS & INVESTMENT PLAN
FOR EMPLOYEES REPRESENTED BY USAW LOCAL 7958,
O. AMES CO. RETIREMENT SAVINGS PLAN,
ZURN RETIREMENT SAVINGS PLAN, and
ELJER TAX REDUCTION INVESTMENT PLAN
By: /s/ Dorothy E. Sander
Name: Dorothy E. Sander
Title: Committee Member
<PAGE>
EXHIBIT INDEX
Exhibit
No.
4.1 Amended and Restated Certificate of Incorporation of
Registrant incorporated by reference to Exhibit 4.1
of Registrant's Registration Statement on Form S-8
pertaining to U.S. Industries, Inc. Restricted Stock
Plan et al. as filed June 11, 1998.
4.2 Amended and Restated By-Laws of Registrant incorporated by
reference to Exhibit 4.2 of Registrant's Registration Statement
on Form S-8 pertaining to U.S. Industries, Inc. Restricted
Stock Plan et al. as filed June 11, 1998.
4.3 Specimen form of certificate representing shares of Common
Stock of Registrant incorporated by reference to Exhibit 4.1 to
Form 10 of U.S. Industries, Inc. as filed April 20, 1995.
4.4(a) USI Retirement Savings & Investment Plan.
4.4(b) USI Corporate Office Retirement Savings & Investment
Plan.
4.4(c) The Huron Retirement Savings & Investment Plan For Employees
Represented by UAW Local 213.
4.4(d) The Ames Group Retirement Savings & Investment Plan For
Employees Represented by USAW Local 7958.
4.4(e) O. Ames Co. Retirement Savings Plan.
4.4(f) Zurn Retirement Savings Plan.
4.4(g) Eljer Tax Reduction Investment Plan.
5.1 Registrant undertakes to submit the Plans and any
amendments thereto to the Internal Revenue Service
("IRS") in a timely manner and will make all changes
required by the IRS in order to qualify the Plans.
23.1 Consent of Ernst & Young LLP, independent auditors,
New York, New York.
23.2 Consent of Price Waterhouse LLP, independent accountants,
Morristown, New Jersey.
23.3 Consent of Ernst & Young LLP, independent auditors,
Dallas, Texas.
23.4 Consent of Arthur Andersen LLP, independent accountants,
Dallas, Texas.
23.5 Consent of Weyer, Weyer & Associates, A.C., independent
auditors, Parkersburg, West Virginia.
23.6 Consent of The Pashke Group, independent auditors, Erie,
Pennsylvania.
24.1 Power of Attorney.
EXHIBIT 4(a)
USI
RETIREMENT SAVINGS AND INVESTMENT PLAN
(Effective June 11, 1998)<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Appropriate Notice" . . . . . . . . . . . . . . . . . . 1
1.4 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . 1
1.5 "Board" or "Board of Directors" . . . . . . . . . . . . . 1
1.6 "Code". . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 "Committee" . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 "Company" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 "Compensation" . . . . . . . . . . . . . . . . . . . . . 1
1.10 "Compensation Deferral Contributions". . . . . . . . . . 2
1.11 "Compensation Deferral Contributions Account". . . . . . 2
1.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
1.13 "Eligible Employee". . . . . . . . . . . . . . . . . . . 2
1.14 "Employee" . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 "Employee Contributions" . . . . . . . . . . . . . . . . 2
1.16 "Employee Contributions Account" . . . . . . . . . . . . 3
1.17 "Employer" . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 "Employer Matching Contributions". . . . . . . . . . . . 3
1.19 "Employer Matching Contributions Account". . . . . . . . 3
1.20 "Employer Securities". . . . . . . . . . . . . . . . . . 3
1.21 "Enrollment Date". . . . . . . . . . . . . . . . . . . . 3
1.22 "Enrollment Period". . . . . . . . . . . . . . . . . . . 3
1.23 "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . 3
1.24 "Hour of Service". . . . . . . . . . . . . . . . . . . . 3
1.25 "Initial Enrollment Date". . . . . . . . . . . . . . . . 4
1.26 "Investment Fund". . . . . . . . . . . . . . . . . . . . 4
1.27 "Investment Manager" . . . . . . . . . . . . . . . . . . 4
1.28 "Leased Employee". . . . . . . . . . . . . . . . . . . . 5
1.29 "Leave of Absence" . . . . . . . . . . . . . . . . . . . 5
1.30 "Member" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 "Parental Leave" . . . . . . . . . . . . . . . . . . . . 5
1.32 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.33 "Plan Year". . . . . . . . . . . . . . . . . . . . . . . 5
1.34 "Prior Plan" . . . . . . . . . . . . . . . . . . . . . . 6
1.35 "Prior Plan Account" . . . . . . . . . . . . . . . . . . 6
1.36 "Required Beginning Date". . . . . . . . . . . . . . . . 6
1.37 "Retirement" . . . . . . . . . . . . . . . . . . . . . . 6
1.38 "Rollover Contribution". . . . . . . . . . . . . . . . . 6
1.39 "Rollover Contribution Account". . . . . . . . . . . . . 6
1.40 "Service". . . . . . . . . . . . . . . . . . . . . . . . 6
1.41 "Suspense Account" . . . . . . . . . . . . . . . . . . . 6
1.42 "Total and Permanent Disability" . . . . . . . . . . . . 6
1.43 "Trustee". . . . . . . . . . . . . . . . . . . . . . . . 7
1.44 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . 7
1.45 "Valuation Date" . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. . . . . . . . . . . . . . . . . . 7
2.2 Eligible Employees on and after the Effective Date. . . . 7
2.3 Completion of Appropriate Notice. . . . . . . . . . . . . 7
2.4 Elections Upon Becoming A Member. . . . . . . . . . . . . 7
2.5 Beneficiary Designation.. . . . . . . . . . . . . . . . . 8
2.6 Transfers to or from Non-Covered Status.. . . . . . . . . 8
2.7 Rollover Contributions From Other Plans.. . . . . . . . . 8
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions.. . . . . . . . . . . 9
3.2 Changes and Suspension of Contributions.. . . . . . . . . 10
3.3 Transfer of Contributions to Trustee. . . . . . . . . . . 10
ARTICLE IV
Limitations on, and Distribution of,
Excess Compensation Deferral
Contributions and Excess Employer Match-
ing Contributions of Highly Compensated
Employees
4.1 Limitations. . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Control of Contributions and Distribution of Excess.. . . 12
4.3 Limitation of Annual Additions. . . . . . . . . . . . . . 14
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions.. . . . . . . . 17
5.2 Treatment of Forfeitures. . . . . . . . . . . . . . . . . 18
5.3 Transfer of Contributions to Trustee. . . . . . . . . . . 18
ARTICLE VI
Accounts
6.1 Maintenance of Accounts.. . . . . . . . . . . . . . . . . 18
6.2 Valuations. . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account.. . . . . . . . . 19
7.2 Other Accounts. . . . . . . . . . . . . . . . . . . . . . 19
7.3 Earlier Vesting in Employer Matching Contributions
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 19
7.4 Forfeitures.. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Matching
Contributions Accounts. . . . . . . . . . . . . . . . . . 20
8.2 Redirection of Future Contributions.. . . . . . . . . . . 22
8.3 Reinvestment of Prior Contributions.. . . . . . . . . . . 22
8.4 Investment of Employer Matching Contributions Accounts.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5 Statements of Accounts And Confirmation of Investment
Directions. . . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Crediting of Accounts.. . . . . . . . . . . . . . . . . . 22
&8.7 Correction of Errors.. . . . . . . . . . . . . . . . . . 23
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. . . . . . . . . . . . . . . . . . . . 24
9.2 Hardship Withdrawals. . . . . . . . . . . . . . . . . . . 24
9.3 Values. . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.5 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE X
Distribution
10.1 Amount of Distribution. . . . . . . . . . . . . . . . . . 27
10.2 Notice of Options and Normal Form of Distribution. . . . 28
10.3 Alternate Form of Distribution.. . . . . . . . . . . . . 30
10.4 Identity of Payee. . . . . . . . . . . . . . . . . . . . 30
10.5 Non-alienation of Benefits.. . . . . . . . . . . . . . . 30
10.6 Qualified Domestic Relations Order.. . . . . . . . . . . 31
10.7 Commencement of Benefits.. . . . . . . . . . . . . . . . 31
10.8 Annuities. . . . . . . . . . . . . . . . . . . . . . . . 32
10.9 Spousal Consent. . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator.. . . . . . . . . . . . . . . . . . . 35
11.2 Board of Directors.. . . . . . . . . . . . . . . . . . . 35
11.3 Appointment of the Committee.. . . . . . . . . . . . . . 35
11.4 Compensation, Expenses.. . . . . . . . . . . . . . . . . 35
11.5 Committee Actions, Agents. . . . . . . . . . . . . . . . 36
11.6 Committee Meetings.. . . . . . . . . . . . . . . . . . . 36
11.7 Authority and Duties of the Committee. . . . . . . . . . 36
11.8 Personal Liability.. . . . . . . . . . . . . . . . . . . 37
11.9 Dealings Between the Committee and Individual Members. . 37
11.10 Information To Be Supplied by the Employer. . . . . . . 37
11.11 Records.. . . . . . . . . . . . . . . . . . . . . . . . 37
11.12 Fiduciary Capacity. . . . . . . . . . . . . . . . . . . 37
11.13 Fiduciary Responsibility. . . . . . . . . . . . . . . . 37
11.14 Claim Procedure.. . . . . . . . . . . . . . . . . . . . 38
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund.. . . . . . . . . . . . . . . . . . . . . . . 40
12.2 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 40
12.3 Investment Manager.. . . . . . . . . . . . . . . . . . . 40
12.4 Purchase and Holding of Securities.. . . . . . . . . . . 40
12.5 Voting of Employer Securities. . . . . . . . . . . . . . 40
12.6 Disbursement of Funds. . . . . . . . . . . . . . . . . . 41
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend.. . . . . . . . . . . . . . . . . . . . . 42
13.2 Suspension or Termination. . . . . . . . . . . . . . . . 42
13.3 Merger, Consolidation of Transfer. . . . . . . . . . . . 42
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration.. . . . . . . . . . . . . . . . . 42
14.2 Payment Due an Incompetent.. . . . . . . . . . . . . . . 43
14.3 Source of Payments.. . . . . . . . . . . . . . . . . . . 43
14.4 Plan Not a Contract of Employment. . . . . . . . . . . . 43
14.5 Applicable Law.. . . . . . . . . . . . . . . . . . . . . 43
14.6 Unclaimed Amounts. . . . . . . . . . . . . . . . . . . . 43
ARTICLE XV
Top Heavy Provisions
15.1 Application. . . . . . . . . . . . . . . . . . . . . . . 44
15.2 Special Top Heavy Definitions. . . . . . . . . . . . . . 44
15.3 Special Top Heavy Provisions.. . . . . . . . . . . . . . 51
15.4 Effect of Change in Applicable Legislation or Regula
tion.. . . . . . . . . . . . . . . . . . . . . . . . . . 54
<PAGE>
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by the
context, the following words and phrases shall have the meanings
indicated. Some of the words and phrases used in the Plan are
not defined in this Article I, but, for convenience are defined
as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions
Account, Compensation Deferral Contributions Account, Rollover
Contribution Account, Employer Matching Contributions Account or
Prior Plan Account as the context requires.
1.2 "Affiliate" means any company which is related to the
Employer as a member of a controlled group of corporations in
accordance with Section 414(b) of the Code, as a trade or busi-
ness under common control in accordance with Section 414(c) of
the Code or members of an affiliated service group as defined
under Section 414(m) of the Code.
1.3 "Appropriate Notice" means the written form, electron-
ic procedure or other method prescribed by the Committee to
convey information for a particular purpose.
1.4 "Beneficiary" means the person or persons designated by
the Plan or by a Member under Section 2.5 (Beneficiary Designa-
tion) to receive benefits payable under the Plan as a result of
the Member's death.
1.5 "Board" or "Board of Directors" means the Board of
Directors of U.S. Industries, Inc.
1.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time and references to sections thereof
shall be deemed to include any such sections as amended, modified
or renumbered.
1.7 "Committee" means the Benefits Administration Committee
appointed in accordance with Section 11.3 (Appointment
of Committee).
1.8 "Company" means U.S. Industries Inc., a Delaware corpo-
ration, or any person, firm, corporation, limited liability
company or partnership which may succeed to its business.
1.9 "Compensation" means with respect to a Plan Year, the
sum of the amount reported by the Employer to the Internal
Revenue Service on Form W-2 as the Member's compensation for such
calendar year, the amount of any Compensation Deferral Contribu-
tions made on such Member's behalf to the Plan and the amount, if
any, contributed to a cafeteria plan that is excluded from gross
income pursuant to Section 125 of the Code; but exclusive of
termination or severance pay, prizes, awards, grievance settle-
ments, overseas cost of living allowances, relocation allowances,
mortgage assistance, executive perquisites, stock options, and
such other extraordinary items or remuneration as the Committee
shall determine from time to time pursuant to such uniform and
nondiscriminatory rules as it shall adopt. On and after January
1, 1989 the Compensation of each Employee taken into account
under the Plan for any Plan Year shall not exceed $200,000 as
thereafter adjusted for inflation in accordance with Section
415(d) of the Code. For Plan Years beginning after 1993 the
Compensation of each Employee taken into account under the Plan
for any such Plan Year shall not exceed $150,000 as thereafter
adjusted for inflation in accordance with Section 401(a)(17)(B)
of the Code.
1.10 "Compensation Deferral Contributions" means contribu-
tions made by the Employer pursuant to an election by the Member
to reduce the cash compensation otherwise currently payable to
such Member by an equivalent amount, in accordance with the
provisions of Section 3.1 (Compensation Deferral Contributions).
1.11 "Compensation Deferral Contributions Account" means
the separate account maintained for a Member to record such
Member's share of the Trust Fund attributable to Compensation
Deferral Contributions made on such Member's behalf.
1.12 "Effective Date" means June 11, 1998, the date that
the Plan became effective or in the case of Participants who were
Members of a Prior Plan the effective date of the Prior Plan
listed on Schedule I.
1.13 Except as set forth on Schedule I, "Eligible Employee"
means an Employee who is employed on the Effective Date or who
(i) has attained age 21 and (ii) has worked, at least 1,000 Hours
of Service during a consecutive twelve-month period, excluding an
individual who is covered by a collective bargaining agreement
between the Employer and any union unless participation by such
employee in the Plan has been agreed to by the parties to such
agreement.
1.14 "Employee" means a person (but not including a person
acting only as a director) who is employed by an Employer.
Leased Employees shall also be treated as Employees for purposes
of this Plan unless: (i) such Leased Employees are covered by a
Plan described in Code Section 414(n)(5) and (ii) such Leased
Employees constitute less than Twenty Percent (20%) of the
Employer's non-highly compensated workforce as defined in Code
Section 414(n)(5)(c).
1.15 "Employee Contributions" means after tax contributions
that were made by a Member to a Prior Plan.
1.16 "Employee Contributions Account" means the separate
account maintained for a Member to record such Member's share of
the Trust Fund attributable to the Member's Employee Contribu-
tions.
1.17 "Employer" means U.S. Industries, Inc. or any Affili-
ate listed on Schedule I hereto which has been designated by the
Board of Directors to participate in the Plan.
1.18 "Employer Matching Contributions" means the Employer
matching contributions made to the Trust Fund pursuant to Article
V (Employer Matching Contributions).
1.19 "Employer Matching Contributions Account" means the
separate Account maintained for a Member to record such Member's
share of the Trust Fund attributable to Employer Matching
Contributions made on such Member's behalf.
1.20 "Employer Securities" means the Common Stock of
U.S. Industries, Inc., a Delaware Corporation.
1.21 "Enrollment Date" means the first day of each month in
the Plan Year.
1.22 "Enrollment Period" means the period commencing on an
Enrollment Date and ending on the next following Enrollment Date.
1.23 "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
1.24 "Hour of Service" means each hour for which an Employ-
ee is paid, or entitled to payment, or receives earned income
from an Employer or an Affiliate:
(a) for performance of duties;
(b) on account of a period of time which no duties
were performed, provided that except in the case of a Leave
of Absence, no more than 501 Hours of Service shall be
credited for any single continuous period during which an
Employee performs no duty, and provided that no Hours of
Service shall be credited for periods of time in respect of
which an Employee receives severance pay or for payments
made or due under a plan maintained solely for the purpose
of complying with applicable workers' compensation, unem-
ployment compensation or disability insurance laws, or for
reimbursement of medical expenses; and
(c) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Employer provided
that Hours of Service credited under (a) or (b) shall not be
credited under (c).
Hours of Service credited to an Employee for the performance
of duties will be credited to the computation period in which the
duties are performed. The determination of Hours of Service for
reasons other than the performance of duties shall be made in
accordance with the provisions of Labor Department Regulations
Section 2530.200b-2(b), and Hours of Service shall be credited to
the computation periods to which the award or agreement pertains.
Except in the case of a Leave of Absence, not more than 501 Hours
of Service shall be credited for any continuous period during
which an Employee performs no duty or, in the case of service
required to be credited for payments of back pay awarded or
agreed to, for a period during which an employee did not or would
not have performed duties.
To the extent not credited above, during a Leave of Absence
an Employee shall be credited with a number of Hours of Service
for each week of such Leave of Absence equal to the Employee's
weekly average number of Hours of Service scheduled for the six-week period
immediately preceding such Leave of Absence.
In any case in which an individual becomes an Employee upon
the acquisition of all or a portion of the business of his or her
former employer by the Employer or an Affiliate, whether by
merger, acquisition of assets or stock, or otherwise, his or her
service with his or her predecessor employer shall be included in
determining his or her Hours of Service if, and to the extent
that, such service is required to be credited hereunder (A) by
section 414(a) of the Code and any regulations promulgated
thereunder, (B) by the terms of the agreement pursuant to which
the business of such former employer was acquired by the Employer
or an Affiliate, or (C) by vote of the Board of Directors.
1.25 "Initial Enrollment Date" means the earliest date
following the Effective Date set by the Committee for Eligible
Employees to apply to become Members of the Plan.
1.26 "Investment Fund" means the investment choices de-
scribed in Section 8.1 (Investment of Accounts Other than Employ-
er Matching Contributions Accounts).
1.27 "Investment Manager" means the individual and/or other
entity appointed in accordance with Section 12.3 (Investment
Manager) who has acknowledged in writing that such individual is
a fiduciary with respect to the Plan and who is:
(a) registered as an investment adviser under the
Investment Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage,
assign or dispose of assets of pension plans.
1.28 "Leased Employee" shall mean any person who pursuant
to an agreement between the Employer and any other person has
performed services for the Employer or any related person as
defined in Code Section 414(n)(6) under the primary direction and
control of the Employer or such related person on a substantially
full time basis for a period of at least one year.
1.29 "Leave of Absence" means an absence or interruption of
service approved by the Committee under uniform and
nondiscriminatory rules and procedures. Members on leave of
absence for service in the Armed Forces of the United States,
however, shall be deemed to have been on Leave of Absence,
provided they return to service with an Employer within the
required time limitations set forth in the then applicable laws
governing reemployment rights of persons inducted, or who have
enlisted, in the Armed Forces.
1.30 "Member" means an Eligible Employee who has become a
member of the Plan in accordance with Article II (Eligibility and
Membership). Each Member shall continue to be such until the
later of the date such Member ceases to be an Eligible Employee
or such Member's Accounts have been completely distributed.
1.31 "Parental Leave" means a period not in excess of two
(2) years commencing after December 31, 1984 during which an
individual is absent from work for any period:
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the
individual,
(c) by reason of the placement of a child with
the individual in connection with the adoption of such
child by such individual, or
(d) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless the
Employee furnishes the Plan Administrator such timely information
as may reasonably be required to establish that the absence from
work was for one of the reasons specified in this Section 1.31
and the number of days for which there was such an absence.
Nothing contained herein shall be construed to establish an
Employer policy of treating a Parental Leave as a Leave of
Absence.
1.32 "Plan" means the USI Retirement Savings And Investment
Plan as set forth herein or as amended from time to time.
1.33 "Plan Year" means the calendar year.
1.34 "Prior Plan" means an employee benefit plan qualified
under Section 401(a) of the Code all or part of the assets of
which are transferred to or merged into the Plan in a transaction
which meets the requirements of Regulation 1.414(l) of the Code.
1.35 "Prior Plan Account" means the separate account main-
tained for a Member to record such Member's share of the Trust
Fund attributable to employer contributions to the plans de-
scribed herein as Prior Plans.
1.36 "Required Beginning Date" means April 1 of the year
following the Plan Year in which occurs the later of the date
that the Member terminates employment or the date on which the
Member attains the age of 70-1/2 years.
1.37 "Retirement" means a Member's normal, early or de-
ferred retirement whichever shall apply to the Member under the
provisions of the Employer's pension plan applicable to such
Member, or the termination of employment of a Member on or after
such Member's attainment of age 65.
1.38 "Rollover Contribution" means an amount which is
transferred from another plan to this Plan, in accordance with
the provisions of Section 2.7 (Rollover Contribution From Other
Plans).
1.39 "Rollover Contribution Account" means the separate
Account maintained for a Member to record such Member's share of
the Trust Fund attributable to any Rollover Contribution made to
the Plan on his behalf.
1.40 "Service" means the period of employment beginning on
the first day the Eligible Employee performs duties for the
Employer or an Affiliate and ending on the day of quit, retire-
ment, discharge or death, two years after the commencement of
absence on account of Parental Leave, or one year after an
absence for any other reason. All prior periods of employment
with the Employer or an Affiliate, and breaks in employment of
less than one year shall be included in Service. If a break in
employment of not more than two years is on account of Parental
Leave not more than one year of Service shall be credited to an
Eligible Employee for a period of Parental Leave.
1.41 "Suspense Account" means the separate account main-
tained for a Member who had monies credited to such account
pursuant to Section 4.3 (Limitation of Annual Additions), re-
flecting the current dollar value of such credit.
1.42 "Total and Permanent Disability" means permanent
incapacity which results in a Member being unable to engage in
regular employment or occupation by reason of any medically
demonstrable physical or mental condition acceptable to the
Committee on a nondiscriminatory basis and which would entitle
the Member to benefits under the Employer's long-term disability
plan, if any, or to Social Security benefits as evidenced by a
disability award letter. However, no Member shall be deemed to
be disabled if such incapacity (a) resulted from or consists of
habitual drunkenness or addiction to narcotics, or (b) was in-
curred, suffered or occurred while the Member was engaged in, or
resulted from having engaged in, a criminal enterprise, or (c)
was intentionally self-inflicted.
1.43 "Trustee" means the corporate trustee appointed from
time to time by the Company to administer the Trust Fund in
accordance with Section 12.2 (Trustee).
1.44 "Trust Fund" means the trust fund established in
accordance with Section 12.1 (Trust Fund) from which benefits
provided under this Plan will be paid.
1.45 "Valuation Date" means the last business day of each
calendar month on which the New York Stock Exchange is open for
trading.
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. Each person who was a member
of a Prior Plan shall become a member of the Plan on the effec-
tive date of the transaction referred to in Section 1.34.
2.2 Eligible Employees on and after the Effective Date. On
and after the Effective Date an Eligible Employee may elect to
become a Member on the Initial Enrollment Date or any Enrollment
Date thereafter. Notwithstanding the foregoing, a former employ-
ee who is reemployed as an Eligible Employee following a termina-
tion of employment and who, prior to termination, satisfied the
conditions for membership in the Plan, shall be eligible to
become a Member of the Plan immediately upon reemployment,
subject to such advance notice procedures as the Committee shall
prescribe.
2.3 Completion of Appropriate Notice. In order to become a
Member on any Enrollment Date, an Eligible Employee must give the
Appropriate Notice to the Committee at least 30 days (or such
other period as the Committee may prescribe) prior to that
Enrollment Date.
2.4 Elections Upon Becoming A Member. An Eligible Employ-
ee, in giving the Appropriate Notice specified in Section 2.3,
shall (a) authorize the Employer to reduce current compensation
for Compensation Deferral Contributions pursuant to Section 3.1
(Compensation Deferral Contributions ), (b) make an investment
election from among those options enumerated in Section 8.1
(Investment of Accounts other Than Employer Matching Contribu-
tions Accounts), and (c) designate a Beneficiary in accordance
with Section 2.5 (Beneficiary Designation). Any such payroll
authorization, investment election or Beneficiary designation
shall remain in effect until changed by giving the Appropriate
Notice to the Committee subject to the provisions of the Plan.
2.5 Beneficiary Designation. Each Member shall designate a
Beneficiary by giving the Appropriate Notice to the Committee.
The designated Beneficiary may be an individual, estate or trust;
however, if the Member is married at the time of such Member's
death, such Member's surviving spouse shall automatically be such
Member's sole Beneficiary unless the spouse has consented in
writing in accordance with Section 10.9 (Spousal Consent) to a
designation of a different Beneficiary. If more than one indi-
vidual or trust is named, the Member shall indicate the shares
and/or precedence of each individual or trust so named. Any
Beneficiary so designated may be changed by the Member at any
time (subject to his spouse's consent, if applicable) by giving
the Appropriate Notice to the Committee.
In the event that no Beneficiary has been designated or that
no designated Beneficiary survives the Member, the following
Beneficiaries (if then living) shall be deemed to have been
designated in the following priority: (a) spouse, (b) children,
including adopted children, in equal shares, (c) parents, in
equal shares, or the Member's surviving parent, if only one
parent survives, and (d) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a Member
ceases to meet the definition of Eligible Employee as set forth
in Section 1.13 (Eligible Employee) but continues to be an
Employee or an employee of an Affiliate, such Member's right to
make or have contributions made on such Member's behalf to the
Plan shall be suspended. If during the period of suspension, a
Member's employment with the Employer or an Affiliate terminates
for any reason, there shall be a distribution of such Member's
Accounts in accordance with the provisions of Article X (Distri-
bution).
If and when the suspended Member again becomes an Eligible
Employee, such Member may resume having Compensation Deferral
Contributions made on such Member's behalf as of the second
Enrollment Date following the month in which the Appropriate
Notice is given to the Committee.
2.7 Rollover Contributions From Other Plans. An Eligible
Employee or an individual who meets the definition of Eligible
Employee in Section 1.13 except for the age or service require-
ments, who is in receipt of a distribution which is eligible to
be "rolled over" to a qualified plan in accordance with applica-
ble Code sections may, in accordance with and subject to
such rules and procedures approved by the Committee, transfer all
or part of such distribution into the Plan; provided, that
distributions which are so transferred to the Plan shall consist
only of cash and that such transfer shall be in conformity with
requirements set forth in the Code.
Upon approval by the Committee, the amount transferred to
the Plan shall be deposited in the Trust Fund in cash and shall
be credited to a Rollover Contribution Account.
If a Rollover Contribution is made on behalf of an individu-
al who has not yet become a Member, such individual shall be
deemed a Member upon the establishment of the Rollover Contribu-
tion Account; however, participation in the Plan shall be limited
to the Rollover Contribution Account until the other requirements
for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member who
is an Eligible Employee may elect to have the Employer make
Compensation Deferral Contributions not to exceed $9,500 per year
(subject to adjustment for inflation in accordance with Section
415(d) of the Code) to the Plan on such Member's behalf to be
credited to such Member's Compensation Deferral Contributions
Account, in which case the cash compensation otherwise payable by
the Employer to the Member shall be reduced by an amount equal to
the Compensation Deferral Contributions so made. Subject to the
limitations prescribed in Section 4.1 the amount of Compensation
Deferral Contributions in any payroll period shall be in whole
percentages from 1% to 17% of the Member's Compensation as the
Member shall designate (or such greater or lesser percentages as
the Committee may from time to time prescribe for the Plan).
The foregoing notwithstanding during the 'make up period,'
as defined below, a former Member (a 'Veteran') who is reemployed
after a period of military service may elect to have the Employer
make additional Compensation Deferral Contributions to the Plan
on such Veteran's behalf, the total of which may not exceed the
maximum Compensation Deferral Contributions that the Veteran
could have elected to have made if no military leave had oc-
curred. For the purposes of calculating the amount of such
additional Compensation Deferral Contributions the Veteran's
Compensation during such leave of absence shall be deemed to have
been the Veteran's annual rate of compensation at the time the
military leave of absence commenced (the 'Deemed Compensation
Rate') and the 'make up period' during which such additional
Compensation Deferral Contributions may be elected shall be equal
to the lesser of five years or three times the period of the
military leave of absence. Such additional Compensation Deferral
Contributions in any payroll period shall be in whole percentages
of the Veteran's current payroll and shall not exceed the maximum
amount that could have been deferred at the Deemed Compensation
Rate. In the event that the additional Compensation Deferral
Contributions to the Plan on a Veteran's behalf that are autho-
rized by this paragraph exceed the limitations set forth in
Article IV of the Plan or otherwise conflict with provisions of
the Code or ERISA, such limitations or conflicts shall be ignored
to the extent permitted by Code Section 414(u).
3.2 Changes and Suspension of Contributions. Compensation
Deferral Contributions made on a Member's behalf may be increased
or decreased or suspended effective on the second Enrollment Date
following the month in which the Appropriate Notice is given to
the Committee. A Member who has suspended Compensation Deferral
Contributions may resume having such contributions made on his or
her behalf commencing on the second Enrollment Date following the
month in which the Appropriate Notice is given to the Committee.
3.3 Transfer of Contributions to Trustee. Contributions
made under this Article III will be transferred to the Trustee by
the 15th day of the month following the month in which the
contributions are withheld from the Member's Compensation and/or
in which the Member's cash compensation is reduced; provided that
all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 30 days after the end
of the Plan Year.
ARTICLE IV
Limitations on, and Distribution of, Excess Compensation
Deferral Contributions and Excess Employer Matching Contri-
butions of Highly Compensated Employees
4.1 Limitations. The Committee in its sole discretion shall
separately limit the amount of Compensation Deferral Contribu-
tions and Employer Matching Contributions made on behalf of each
"Highly Compensated Employee" (as defined below) for each Plan
Year to insure that neither the Deferral Percentage nor the
Contributions Percentage (each as defined below and referred to
herein as the "Percentage") exceed the greater of (X) 125 percent
of the Percentage in the preceding Plan Year of all other eligi-
ble employees or, alternatively, (Y) the Percentage in the
preceding Plan Year of all other eligible employees plus 2
percentage points and the actual Percentage for the Highly
Compensated Employees is not more than two times the actual
Percentage in the preceding Plan Year of all other eligible
employees.
Additionally, Employer Matching Contributions shall not in
any event discriminate in favor of Highly Compensated Employees.
For purposes of this Section, the term "Deferral Percentage"
with respect to any Plan Year means the Compensation Deferral
Contributions for the Plan Year divided by Compensation.
For purposes of this Section, the term "Contributions
Percentage" with respect to any Plan Year means the Employer
Matching Contributions for the Plan Year divided by Compensation.
For the purposes of this Section, the term "Highly Compen-
sated Employee" with respect to any Plan Year means an Eligible
Employee or former Eligible Employee who performed services
during the Plan Year for which the determination is being made
and:
(a) at any time during such Plan Year or preceding Plan
Year was a 5-percent owner of the Employer (as defined for
top-heavy plans under Code Sec. 416(1); or
(b) earned $80,000 or more in the preceding Plan Year
(subject to adjustment for inflation in accordance with
Section 415(d) of the Code) in annual Compensation from the
Employer.
(1) For the purposes of this Section, the term "Compensation"
means Compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafe-teria plan,
cash or deferred arrangement or tax sheltered annuity.
(2) For the purpose of this Section the term "Employer" shall
also include all other entities aggregated with the Employer
under the requirements of Code Section 414(b), (c), (m) and (o).
For purposes of this Section, the Employer is permitted to
determine whether Members are in the category of Highly Compen-
sated Employees or other Eligible Employees based on the Member's
Compensation for the immediately preceding Plan Year or on
estimated Compensation for the Current Plan Year in accordance
with uniform and nondiscriminatory rules whenever information
regarding actual Compensation for the Plan Year is not reasonably
available at the time the amount of a contribution hereunder is
determined or limited.
For purposes of this Section the definition of "Compensation
Deferral Contributions" and "Employer Matching Contributions"
shall include Compensation Deferral Contributions and Employer
Matching Contributions made under any other plan that is aggre-
gated with this Plan for purposes of Sections 401(a)(4) or 410(b)
(other than Section 410(b)(2)(A)(ii)) of the Code and if any such
plan is permissively aggregated with this Plan for the purposes
of Section 401(k) of the Code, the plans so aggregated must also
satisfy Section 401(a)(4) and 410(b) as if they were a single
plan. Further, for the purposes of this Section, Compensation
Deferral Contributions made on behalf of each Highly Compensated
Employee shall be determined by treating all cash or deferred
arrangements under which each such Highly Compensated Employee is
eligible as a single arrangement.
4.2 Control of Contributions and Distribution of Excess.
(a) Rules For Compensation Deferral Contributions.The
Committee may, in accordance with uniform and nondiscriminatory
rules it establishes from time to time, require that Members who
are among the Highly Compensated Employees for the Plan Year make
Compensation Deferral elections following and/or preceding the
completion of such elections by all other Eligible Employees and
the Committee may (X) limit the amount by which each Member who
is among the Highly Compensated Employees may elect to reduce his
or her Compensation, and (Y) subject to Section 402(g) of the
Code permit each other Eligible Employee to elect to reduce his
or her Compensation within higher limits than those for Highly
Compensated Employees.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Compensation Deferral
Contributions to be made with respect to such Enrollment Period
or Employer Matching Contributions in respect thereof would cause
the limitation contained in this Section to be exceeded for the
Plan Year in which such Enrollment Period occurs, the amount of
Compensation Deferral Contributions allowed to be made on behalf
of Highly Compensated Employees for such Enrollment Period shall
be reduced. The Highly Compensated Employees to whom the reduc-
tion is applicable, and the amount of the excess Compensation
Deferral Contributions, shall be determined by reducing the
actual Deferral Contributions of the Highly Compensated Employee
or Employees with the highest actual Deferral Contributions to
the extent required to--
(i) enable the arrangement to satisfy the limita-
tion set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or
Employees' actual Deferral Compensation to equal the
Deferral Compensation of the Highly Compensated Employ-
ee or Employees with the next highest actual Deferral
Compensation.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
If the Committee determines that the limitations contained
in this Section have not been met for any Plan Year, the Commit-
tee may return the excess Compensation Deferral Contributions of
Members who are Highly Compensated Employees (calculated in the
manner set forth above) to such Members within the 12-month
period beginning after the last day of the Plan Year for which
such contributions were made. The amount of such excess Compen-
sation Deferral Contributions shall be adjusted to reflect any
income or loss allocable to such excess during the Plan Year
determined in accordance with the alternative method set forth in
Reg. Section 1.401(k)-1(f)(4)(ii)(c) and also from the end of the
Plan Year to the date of distribution determined in accordance
with the safe harbor method set forth in Reg. Section 1.401(k)-1(f)(4)(2)(d).
For the purpose of this Section, if the Deferral Percentage
of a Highly Compensated Employee has been determined by combining
the contributions and compensation of only family members who are
Highly Compensated Employees without regard to family aggrega-
tion, then the excess Deferral Contributions for the family unit
shall be allocated among the family members in proportion to the
contribution of each family member that has been combined.
Alternatively, if the Deferral Percentage of a Highly
Compensated Employee has been determined by combining the contri-
butions and compensation of all family members, then the reduc-
tion in the Deferral Percentage of the family group using the
method described in this Section shall not be reduced below the
Deferral Percentage for the non-highly paid members of the family
group and the excess Compensation Deferral Contributions for the
family unit shall be allocated among the Highly Paid family
members in proportion to their contributions.
(b) Rules for Company Matching Contributions.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Company Matching Contribu-
tions to be made with respect to such Enrollment Period would
cause the limitation contained in this Section to be exceeded for
the Plan Year in which such Enrollment Period occurs, the amount
of Company Matching Contributions allowed to be made on behalf of
Highly Compensated Employees for such Enrollment Period shall be
reduced. The Highly Compensated Employees to whom the reduction
is applicable, and the amount of the excess shall be determined
by reducing the Company Matching Contributions of the Highly
Compensated Employee or Employees with the highest actual Match-
ing Contributions to the extent required to--
(i) enable the arrangement to satisfy the limitation
set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or Emplo-
yees' actual Matching Contributions to equal the Match-
ing Contributions of the Highly Compensated Employee or
Employees with the next highest actual Matching Contri-
butions.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
Excess Aggregate Contributions plus any income and minus any
losses allocable thereto, shall be forfeited, if not vested, or
if not forfeitable, distributed, no later than the last day of
each Plan Year to those Participants to whose Individual Accounts
such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Company Matching Contributions which are
forfeited shall be credited against Company Matching Contribu-
tions required to be made to Participant's accounts in the Plan
Year following the Plan Year that the excess Company Matching
contributions were allocated to Participant's accounts provided,
however, any excess which has not been so credited within two and
one half months after the end of the Plan Year shall be immedi-
ately refunded to the Employer.
For the purposes of this Section, if the Contributions
Percentage of a Highly Compensated Employee has been determined
by combining the contributions and compensation of only family
members who are Highly Compensated Employees without regard to
family aggregation, then excess Aggregate Contributions for the
family unit shall be allocated among the family members in
proportion to the share of each family member that has been
combined.
Alternatively, if the Contributions Percentage of a Highly
Compensated Employee has been determined by combining the contri-
butions and compensation of all family members, then the reduc-
tion in the Contributions Percentage of the family group using
the method described in this Section shall not be reduced below
the Contributions Percentage for the non-highly paid members of
the family group and the excess Aggregate Contributions for the
family unit shall be allocated among the Highly Paid family
members in proportion to their shares.
(c) Multiple Use Limitations. If the actual Deferral
Percentage, the actual Contribution Percentage, and the sum of
the two percentages for the group of Highly Compensated Employees
in the Plan exceed the limits set forth in Regs.1.401(m)-2(b)
then in such case the required reduction of multiple use of the
alternate limitation shall be accomplished through reduction of
the actual Deferral Percentage for all Highly Compensated Employ-
ees eligible to participate in the Plan in accordance with the
procedures prescribed in Regs. 1.401(m)-2(b) which are incorpo-
rated herein by reference.
4.3 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the con-
trary, in no event shall the Annual Additions (as here-
inafter defined) with respect to any Member in any Plan
Year exceed the Maximum Annual Addition. A Member's
"Maximum Annual Additions" means the lesser of (i) 25%
of the Member's compensation reported on Form W-2
(after December 31, 1997, compensation for the purposes
of Annual Additions shall also include elective or
salary reduction contributions to a cafeteria plan,
cash or deferred compensation arrangement or tax shel-
tered annuity) or (ii) the dollar limit in effect for
such Plan Year in accordance with Section 415(c)(1)(A)
of the Code ($30,000 as hereafter adjusted for infla-
tion in accordance with Section 415(d) of the Code),
(b) For purposes of this Section 4.3 the term
"Annual Additions" means the sum for any Plan Year of
(i) Compensation Deferral Contributions
made in accordance with Section 3.1 (Compen-
sation Deferral Contributions),
(ii) Employer Matching Contributions
including forfeitures as applied in accor-
dance with Section 5.1 (Amount of Employer
Matching Contributions) and Section 5.2
(Treatment of Forfeitures).
(iii) The amount of annual additions (within
the meaning of Section 415(c)(2) of the Code)
under all other qualified defined contribution
plans of the Employer or an Affiliate.
(c) If the Member's Annual Additions exceed the
Maximum Annual Additions limitations in accordance with
this Section 4.3, such amounts shall not be contributed
to the Trust or, if contributed by or on behalf of a
Member under the Plan shall be reduced in the following
order, but only to the extent necessary to meet the
limitations: (i) Compensation Deferral Contributions
and (ii) Employer Matching Contributions in respect of
such reduced Compensation Deferral Contributions.
(d) Combined Fraction.
(i) Notwithstanding the foregoing, for any Plan
Year beginning before January 1, 2000, if a Member is a
participant in any qualified defined benefit plan main-
tained by an Employer or an Affiliate, the sum of the
"Defined Benefit Plan Fraction" (as defined below) and
the "Defined Contribution Plan Fraction" (as defined
below) for such Member shall not exceed 1.0 (called
"Combined Fraction"). If for any Plan Year the Com-
bined Fraction of a Member exceeds 1.0 after applica-
tion of provisions for limitation of benefits under all
such qualified defined benefit plans, the Maximum
Annual Additions of such Member shall be reduced as
provided in Section 4.3(c) to the extent necessary to
reduce the Combined Fraction of such Member to 1.0.
(ii) The "Defined Benefit Plan Fraction" applica-
ble to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all of the qualified de-
fined benefit Plans maintained by the Employer or an
Affiliate, (whether or not terminated) in which such
Member participates (determined as of the close of the
Plan Year) and the denominator of which is the lesser
of (A) the product of 1.25 multiplied by the maximum
dollar limitation on a Member's Projected Annual Bene-
fit if the plan provided the maximum benefit allowable
under Section 415(b) of the Code for such Plan Year, or
(B) the product of 1.4 multiplied by 100% of the
Member's Highest Average Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefit plans main-
tained by the Employer which were in existence on July
1, 1982, the denominator of this fraction will not be
less than 1.25 multiplied by the sum of the annual
benefits under such plans which the Member had accrued
as of the later of September 30, 1983, or the last
limitation year beginning before January 1, 1983. The
preceding sentence applies only if defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at
the end of the 1982 limitation year.
(iii) The "Defined Contribution Plan Fraction"
applicable to a Member for any Limitation Year is a
fraction, the numerator of which is the sum of the
Member's Annual Additions as of the close of such Plan
Year for that Plan Year and for all prior Plan Years
under all of the defined contribution plans maintained
by an Employer or an Affiliate in which Member partici-
pates, and the denominator of which is the lesser of
the following amounts (determined for such Plan Year
and for each prior Plan Year of service with the Em-
ployer or any Affiliate regardless of whether a plan
was in existence during those years): (A) the product
of 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for the Plan Year
(determined without regard to the special dollar limi-
tation for employee stock ownership plans), or (B) the
product of 1.4 multiplied by twenty-five percent of the
Member's Compensation for the Plan Year.
(e) Definitions.
(i) "Highest Average Compensation" means the
average of a Member's high three consecutive Plan Years
(determined as of the close of the Plan Year) of em-
ployment with the Employer or the actual number of
years of employment for those Members who are employed
for less than three consecutive years with the Employ-
er.
(ii) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contribu-
tions under a defined benefit plan, adjusted, in the
case of any benefit payable in a form other than a
single life annuity or a qualified joint and survivor
annuity, to the actuarial equivalent of a single life
annuity, assuming (A) the Member continues employment
until reaching the plan's normal retirement age (or the
Member's current age, if later), (B) compensation
remains unchanged and (C) all other relevant factors
used to determine benefits under the plan remain con-
stant in the future.
(f) In the event that, notwithstanding the foregoing
provisions of this Section 4.3, the limitations with respect
to Annual Additions prescribed hereunder are exceeded with
respect to any Member and such excess arises as a conse-
quence of reasonable error in estimating a Member's compen-
sation or such other circumstances as the Secretary of
Treasury shall permit, the Employer Matching Contributions
portion of such excess shall be held in a Suspense Account
and, if such Member remains a Member, shall be used to
reduce Employer Matching Contributions for such Member for
the succeeding Plan Years, and, if such Member ceases par-
ticipating in the Plan, shall be used to reduce Employer
Matching Contributions for all Members in the Plan Year of
cessation and succeeding Plan Years, as necessary. Compen-
sation Deferral Contributions which have been made to the
Trust and are reduced under Section 4.3(c) shall be refunded
to the Member as soon as administratively convenient. Any
Employer Matching Contributions including Forfeitures re-
maining upon Plan Termination which cannot be allocated to
Members in accordance with the foregoing in the Plan Year of
termination of the Plan shall be returned to the Employer.
(g) For purposes of this Section 4.3, the standard of
control for determining if a company is an Affiliate under
Section 414(b) and 414(c) of the Internal Revenue Code shall
be deemed to be "more than 50%" rather than "at least 80%."
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions. The Employ-
er shall make matching contributions to the Plan, with respect to
each payroll period on behalf of each Member who is an Eligible
Employee, equal to 50% (or such greater or lesser percentage
specified in Schedule II hereto or as the Board may authorize
from time to time) of that portion of the Member's Compensation
Deferral Contributions which do not exceed 6% (or such other
percentage as the Board may from time to time permit) of Compens-
ation in such payroll period. The Board of Directors may, in its
discretion, discontinue Employer Matching Contributions with
respect to Members' Compensation Deferral Contributions for
Compensation not yet earned on the date such Employer Matching
Contributions are discontinued.
5.2 Treatment of Forfeitures. Any amounts forfeited in
accordance with Sections 7.4 (Forfeitures) and 14.6 (Unclaimed
Amounts) shall be applied as a credit towards the amount of
Employer Matching Contributions otherwise required under Section
5.1. However, if pursuant to Section 5.1, Employer Matching
Contributions are discontinued, for Plan Years following the Plan
Year in which such discontinuance occurs, any such forfeited
amounts in excess of the amounts required to restore forfeited
amounts to the Employer Matching Contributions Accounts of
Members who are reemployed in accordance with Section 7.4 shall
be allocated as of the last day of the Plan Year to the Member's
Employer Matching Contributions Accounts in an amount equal to
the amount of such forfeited amounts available for allocation
multiplied by a fraction the numerator of which is the Member's
Compensation Deferral Contributions for the Plan Year not in
excess of six percent of such Member's Compensation and the
denominator of which is the aggregate of all Members' Compensa-
tion Deferral Contributions not in excess of six percent of all
such Members' Compensation.
5.3 Transfer of Contributions to Trustee. Employer Match-
ing Contributions under this Article V with respect to each
payroll period shall be paid to the Trustee as soon as practica-
ble after the close of the month in which such payroll period
ends (but in no event later than 15 days after the last day of
such month) and such Employer Matching Contributions (inclusive
of the credit for forfeitures as provided in Section 5.2) shall
be credited as of the last day of such month to each Member's
Employer Matching Contributions Account.
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. For each Member the Committee
shall, where applicable, cause a separate Compensation Deferral
Contributions Account, an Employer Matching Contributions Ac-
count, a Rollover Contribution Account and a Prior Plan Account
to be maintained. For Employee contributions made to a Prior
Plan which were not Compensation Deferral Contributions the
Committee shall continue to maintain a separate Employee Contri-
butions Account.
6.2 Valuations. As of each Valuation Date, the Committee
shall adjust the Employee Contributions Account, the Compensation
Deferral Contributions Account, the Employer Matching Contribu-
tions Account, the Rollover Contribution Account and Prior Plan
Account, as applicable, for each Member to reflect his share of
contributions (including for this purpose contributions made
after such Valuation Date but credited as of such Valuation
Date), amounts of interest paid or accrued in respect of a loan
made to such Member pursuant to Section 9.5, withdrawals, distri-
butions, forfeitures, income, expenses payable from the Trust
Fund and any increase or decrease in the value of Trust Fund
assets since the preceding Valuation Date. Each separate account
maintained for each loan made to a Member pursuant to Section 9.5
shall be valued as of each Valuation Date by adjusting the
balance of the loan for the payments of principal thereunder.
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account. A Member's
interest in the Member's Employer Matching Contributions Account
shall become 100% vested after completion of at least five years
of service provided, however, that (a) Employer Matching Contri-
butions to accounts of Highly Compensated Employees shall not be
deemed to vest until the Deferral Percentage and Contributions
Percentage limitations set forth in Article IV have been satis-
fied and (b) nothing herein shall delay vesting pursuant to the
provisions of a Prior Plan.
7.2 Other Accounts. Interests in Compensation Deferral
Contributions Accounts, Prior Plan Accounts, Rollover Contribu-
tion Accounts and Employee Contributions Accounts shall be fully
vested at all times.
7.3 Earlier Vesting in Employer Matching Contributions
Accounts. Notwithstanding the foregoing, a Member's interest in
his or her Employer Matching Contributions Account shall be fully
vested (a) on the date of termination of employment by reason of
death, Retirement or Total and Permanent Disability, (b) when and
if this Plan shall at any time be terminated for any reason, (c)
upon the complete discontinuance of contributions by the Employer
hereunder, or (d) upon partial termination of this Plan if such
Member is a member affected by such partial termination.
7.4 Forfeitures. A Member's Employer Matching Contribu-
tions Account which is not vested in accordance with this Article
VII at the time of such Member's termination of employment shall
be forfeited as of the last day of the Valuation Period following
the Valuation Period in which the Member has a termination of
employment. However, if a Member who has a termination of
employment is reemployed before the end of a period of five
consecutive Plan Years beginning with the Plan Year in which the
Member has a termination of employment and during which the
Member is not an Employee on the last day of each Plan Year, any
forfeited amounts shall be restored to the Member's Employer
Matching Contributions Account provided, however, that any
termination distribution from the Employee's Compensation Defer-
ral Contribution Account be first returned to the Plan. For
purposes of the preceding sentence, any Plan Year in which a
Member is absent from work on the last day of the Plan Year by
reason of a Parental Leave shall not be counted as one of the
Plan Years in such a period of five consecutive Plan Years and
the Plan Year immediately preceding the Plan Year immediately
following a Plan Year in which such Member is absent from work on
the last day of the Plan Year by reason of Parental Leave shall
be deemed to be consecutive.
Amounts required to be restored to the Employer Matching
Contributions Accounts of a Member shall be reinstated, to the
extent not contributed by an Employer, out of amounts forfeited
under this Section 7.4 or 14.6 (Unclaimed Amounts) for the Plan
Year and, to the extent such forfeitures are not sufficient,
shall be charged ratably against income of the Trust Fund.
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Matching
Contributions Accounts. Upon becoming a Member, the Member shall
direct that Compensation Deferral Contributions and any Prior
Plan Contributions, Rollover Contributions or Employee Contribu-
tions be invested in increments of 5% in one or more of the
following Investment Funds (or such other Fund as may hereafter
be approved by the Committee) which individually and collectively
are designed to conform to DOL Regulation 2550.404c-1 for so-called Section 404
(c) plans in order that fiduciaries of the Plan
may be relieved of liability for any losses which are the direct
and necessary result of a Member's investment directions:
(a) The Company Stock Fund, which is invested in
Employer Securities. Members will not be permitted to
direct that an investment be made in the Company Stock Fund
unless and until the Member has received a prospectus in
respect of Employer Securities in the Company Stock Fund
which meets the requirements of the Securities Act of 1933
or in the opinion of counsel for the Company such investment
may be otherwise permitted.
(b) The Fixed Income Fund, which invests mainly in
fixed income investments that emphasize preservation of
principal and seeks a target rate of return over a period of
at least six months.
(c) The Federated Bond Fund, seeks high income by
investing in a wide range of bonds, including lower-rated,
high-yielding bonds.
(d) The Janus Fund, which seeks long-term growth by
investing in common stocks in companies of any size but with
an emphasis on larger companies.
(e) The Neuberger & Berman Guardian Trust Fund, which
seeks long-term growth and income by investing in stocks of
established high-quality companies considered to be under-
valued in comparison with stocks of similar companies.
(f) The BT Investment International Equity Fund, which
is invested in stocks of established companies in countries
with strong economies primarily in Europe and the Pacific
Basin. Investments in companies outside the United States
offer increased diversification with broadened opportunity
and potentially high returns.
(g) The Twentieth Century Ultra Fund, which seeks
long-term growth by investing in stocks of medium-size to
large companies with better than average growth potential.
(h) The BT Investment Equity Appreciation Fund, which
is invested in stocks of medium-sized companies in high-growth
industries.
The Fund focuses on industries most
likely to benefit from large scale changes taking place in
society. Investments in medium-sized companies in high
growth industries offers greater volatility than investments
in larger companies in mature industries.
(i) The BT Investment Small Cap Fund, which seeks
long-term growth by primarily investing in stocks of small
U.S. companies with superior growth potential. This fund
may also invest up to 25% of its assets in foreign stocks.
(j) Three BT Investment Lifecycle Funds, which are
each invested in a continuously monitored mix of stocks,
bonds and money market instruments keyed to the investor's
investment term and risk tolerance:
I. The Short Range Fund, concentrates on securities
offering high income yield with less potential for
growth. Suitable for investment terms of five or
fewer years.
II. The Mid-Range Fund seeks a balance between invest-
ments offering high income yield and those offer-
ing more growth potential for the medium term.
III. The Long Range Fund pursues higher growth and
income investments while reducing exposure to
market volatility through the benefits of invest-
ing for longer terms.
8.2 Redirection of Future Contributions. A Member's
investment direction under Section 8.1 may be changed at any time
and will be effective for contributions received for the current
month provided that the Appropriate Notice is received by the
Committee before 2 P.M. Eastern Time on the last business day of
the month. Such change in direction will not be effective as to
amounts previously contributed or invested.
8.3 Reinvestment of Prior Contributions.
(a) Effective on the Enrollment Date following the
month in which the Appropriate Notice is received by the
Committee (not later than 2 P.M. Eastern Time on the last
business day of the month) a Member may direct that up to
the total value in any Investment Fund holding investments
from the Member's Compensation Deferral Contributions Acc-
ount, Prior Plan Account, Rollover Contribution Account or
Employee Contributions Account be transferred from such
Investment Fund to any other Investment Fund in increments
of 5%.
(b) The Committee may, in its sole discretion, impose
at any time or from time to time such restrictions on the
transfers of monies from one Investment Fund to another as
it deems necessary or appropriate.
8.4 Investment of Employer Matching Contributions Accounts.
Employer Matching Contributions shall be invested only in
Employer Securities through the Company Stock Fund.
8.5 Statements of Accounts And Confirmation of Investment
Directions.
(a) Statements of Accounts. Each Member shall be
furnished a quarterly statement of accounts. A like
statement shall be furnished to a Member upon any
distribution being made under the Plan.
(b) Confirmations of Investment Directions. All
investment directions given by Members under the Plan
shall be confirmed in writing.
8.6 Crediting of Accounts. Interests in each of the
Investment Funds shall be credited to each Member's Accounts as
units of value determined separately for each Investment Fund, as
follows:
(a) the initial value of a unit in each Investment
Fund shall be one dollar,
(b) the unit of value of each Investment Fund shall be
redetermined on each Valuation Date by dividing the then
fair market value of all of the assets of such Investment
Fund by the number of units therein then outstanding.
Amounts held as a result of forfeiture shall not be included
in the value of the Company Stock Fund in determining the
unit of value; and
(c) current Compensation Deferral Contributions,
Employer Matching Contributions and Rollover Contributions
will be credited to the Member's Accounts as units of value,
the number of which is determined by dividing the dollar
amount of the contribution by the then current unit of
value.
If a suspense account credited in accordance with Section
4.3(f) is in existence on a Valuation Date, the number of units
of value in the suspense account shall be adjusted as of each
Valuation Date so that such an account does not participate in
the Trust's investment gains or losses. To the extent a Member's
Compensation Deferral Contributions Account is invested pursuant
to Section 9.5 in a loan to a Member, the Member's Accounts shall
be credited and charged directly with income, gains, losses and
expenses attributable to such loan as of each Valuation Date and
the value of the account will be adjusted through the date of a
distribution to reflect the value of such direct investments on
the distribution date. The Member's loan principal and interest
payments (i) shall be credited to the Member's Compensation
Deferral Contributions Account as units of value, the number of
which is determined as of the Valuation Date next following the
date of such payment by dividing the dollar amount of the payment
by the then current unit of value and (ii) shall be invested in
accordance with the Member's investment directions for future
Compensation Deferral Contributions pursuant to Section 8.2.
8.7 Correction of Errors. In the event of an error in the
adjustment of a Member's Account, the Committee, in its sole
discretion, may correct such error by either crediting or charg-
ing the adjustment required to make such correction to or against
Forfeitures for the Plan Year or to or against income as an
expense of the Trust for the Plan Year in which the correction is
made, or if an Employer contributes an amount to correct any such
error, from such amount. Except as provided in this Section, the
Accounts of other Members shall not be readjusted on account of
such error.
8.8 Investment of Deferred Distributions. Former Members
of the Plan shall have the same investment options for their
Accounts as are available for the Accounts of current Members of
the Plan.
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. In any twelve-month period a
Member may make one withdrawal from the Plan that is not less
than $500 or the combined total of all of the eligible funds in
the Member's Accounts from which withdrawals may be made.
Eligibility includes:
(a) Hardship Eligibility. In the event of Hardship
(as defined in Section 9.2) before age 59-1/2, the entire
balance in the Member's Employee Contributions Account,
Rollover Contribution Account or Prior Plan Account, plus
the sum of all contributions that have been credited to a
Member's Compensation Deferral Contributions Account to date
together with any Income allocable to such contributions as
of December 31, 1988.
(b) Age 59-1/2 Eligibility. After a Member attains
age 59-1/2 the vested portion of such Member's Employer
Contributions Account, plus the entire balance in all of the
Member's other Accounts.
9.2 Hardship Withdrawals.
(a) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed by the
Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets (in-
cluding those assets of the Member's spouse and minor
children that are reasonably available to the Member)
to the extent such liquidation will not itself cause
immediate and heavy financial need,
(iii) By ceasing Compensation Deferral Contribu-
tions under the Plan, or
(iv) By other distributions or nontaxable (at the
time of the loan) loans from any plan maintained by the
Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
The Committee shall be entitled to rely on the Member's
statement of need without inquiry into the Member's finan-
cial circumstances.
(b) Determination of Hardship. A withdrawal will be
deemed to be a hardship withdrawal if made on account of:
(i) Medical expenses incurred, or to be incurred,
by the Member, the Member's spouse, or any dependent,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
(iii) Payment of tuition for the next year,
semester or quarter of post-secondary education for the
Member, the Member's spouse or any dependent,
(iv) The need to prevent the eviction of the
Member from the Member's principal residence or fore-
closure on the mortgage of the Member's principal
residence,
(v) Such other immediate and heavy financial need
as the Commissioner of Internal Revenue may from time
to time publish by revenue rulings, notices and other
documents of general applicability, or
(vi) Any other immediate and heavy financial need
as determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the re-
quirements of the Code and the applicable regulations
and in accordance with the following standards and
principles:
(A) the need shall be due to an extra-ordi-
nary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of hard-
ship as commonly understood such as financial
expenses and not for entertainment or pleasure,
and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
9.3 Values. All withdrawals under Sections 9.1 or 9.2
shall be based on the values of Accounts as of the Valuation Date
next following the date that the Appropriate Notice was given to
the Committee, or such other Valuation Date as the Committee
shall prescribe. Any withdrawal from any Account (or Subaccount
thereof) under Sections 9.1 and 9.2 shall be charged proportion-
ately against each Investment Fund described in Article VIII
(Investment of Accounts) in which such Account is invested.
9.4 Payment of Withdrawals. Any amount withdrawn under
Section 9.1 shall be paid to a Member in a lump sum in cash, as
soon as practicable after the Valuation Date as of which the
withdrawal election is effective provided, however, that at the
Member's request whole numbers of Employer Securities contained
in the Member's Account may be distributed in kind.
9.5 Loans. A Member who is a "party in interest" as
defined in Section 3(14) of ERISA (a "Party in Interest") may
borrow for any purpose from his or her Employee Contributions
Account, Compensation Deferral Contributions Account, Prior Plan
Account, if any, and Rollover Contribution Account in increments
of not less than $1,000 once in any twelve-month period an amount
(inclusive of current loans) of up to one half of the total of
such accounts, but in any event not more than $50,000 reduced by
the excess (if any) of the highest balance of existing loans
during the preceding 12 months over the current loan.
For the purposes of the foregoing, any outstanding
balance of an existing loan shall be aggregated with any addi-
tional funds being borrowed in order to calculate a Member's
borrowing limit. Transactions for additional funds shall be
booked and documented at then current interest rates as a new
loan.
All loans shall be made pursuant to such other procedures
and terms as shall be adopted by the Committee, subject to the
following:
(a) A loan may remain outstanding so long as the
borrower remains a Party in Interest and shall be repayable
within five years from the date of borrowing upon such terms
as may be determined by the Committee; provided, however,
that any loan of more than $15,000 used to acquire the
primary residence of a Member shall be repayable over a
period of up to ten years as determined by the Committee. A
Member may have no more than one primary residence loan and
one loan for any other purpose outstanding at any time.
The Committee may in its absolute discretion grant such
loan in accordance with such uniform and nondiscriminatory
rules as it may from time to time establish. Any such loan
shall be made at a then prevailing commercial rate of inter-
est for similar credits on such terms of repayment (in level
payments not less frequent than monthly) and subject to such
rules and restrictions as the Committee shall determine,
provided that any such loans shall be available to all
Members on a reasonably equivalent basis and that any loan
may be repaid at any time without penalty.
All Member loans shall be secured on a dollar for dollar
basis by up to 50% of the balance of the Accounts from which
the loan is made. To the extent a loan is unpaid, it shall
be deducted from the amount payable to such Member or such
Member's beneficiary at the time of distribution of the
Accounts from which the loan was made;
(b) In the event that a Member fails to repay a loan
according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Member's Accounts for which
a distributable event has occurred. In the event of fore-
closure, a distributable event shall be deemed to occur
immediately following the next Valuation Date for any por-
tion of an Account with respect to which the Member or the
Member's Beneficiary would be permitted in accordance with
Sections 9.1 or 10.1 to elect an immediate distribution;
(c) The receivable representing the loan (and other
loans to the same Member) will be accounted for by the
Trustee as a separate earmarked investment solely for the
individual account of the Member. A Member's payments to
the Trust of principal and interest on the loan shall be
invested by the Trustee as elected by the Member in accor-
dance with the Member's investment directions for future
contributions in accordance with Section 8.2, as soon as
reasonably practical;
(d) Loan applications may be made at any time by any
Member by giving the Appropriate Notice to the Committee or
its designee at any time.
(e) No loan shall remain outstanding after a Member is
no longer a Party in Interest. If a Member who is no longer
a Party in Interest elects under Section 10.7 not to file a
claim for the commencement of benefits when the Member's
employment is terminated, the balance of any outstanding
loan must be repaid in full within sixty (60) days.
(f) Loan Origination Fee. From time to time the
Committee may set a reasonable loan origination fee for each
loan application. Such fees shall be deducted from loan
proceeds paid to loan applicants.
ARTICLE X
Distribution
10.1 Amount of Distribution. The Member or the Member's
beneficiary, as the case may be, shall not be entitled to elect
to receive a distribution of the vested value of the Member's
account until:
(a) the Member's Retirement, termination of employment,
death or Permanent Disability, or
(b) termination of the Plan without establishment or main-
tenance of a successor plan, or
(c) the date of sale of substantially all of the assets of
the Employer to an acquiring corporation which continues the
employment of the Member without the establishment of a
successor plan.
(d) April 1 of the year following the Plan Year that a
Member reaches 70 1/2 with respect to Members who are still
employed and who attain 70 1/2 prior to January 1, 1999.
The vested value of the Member's Account shall be determined
in accordance with Article VII (Vesting of Accounts) as of the
Valuation Date next following such election except that in the
case of the Member's Total and Permanent Disability the vested
value of the Member's account shall be determined as of the
Valuation Date next following the date the Committee determines
that the Member has a Total and Permanent Disability. In any
event, such Valuation Date shall be no later than the Valuation
Date which immediately precedes the Member's Required Beginning
Date (or the date which would have been the Member's Required
beginning Date had the Member survived). Distributions under the
Plan to a Member's Beneficiary shall be completed not more than
five years after the Member's death.
10.2 Notice of Options and Normal Form of Distribution.
(a) Notice of Options.
(i) No less than thirty (30) nor more than ninety
(90) days prior to the date of any distribution hereunder
the Plan Administrator shall provide the Member with a
general description of the material features and an explana-
tion of the relative values of the optional forms of bene-
fits available under the Plan.
(ii) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribu-
tion may commence less than thirty (30) days after the
notice required under Reg. Section 1.411(a)-11(c) is given,
provided that:
(A) the Plan Administrator clearly informs the Member that the
Member has a right to a period of at least
thirty (30) days after receiving the notice to consider
the decision of whether or not to elect a distribution
(and, if aplicable, a particular distribution option), and
(B) the Member, after receiving the notice,
affirmatively elects a distribution.
(iii) If the distribution is one to which sections
401(a)(11) and 417 of the Code do apply such distributions
may commence less than thirty (30) days after the notice
required by Section 10.8 provided that:
(A) The Plan Administrator clearly inform the Member
that the Member has a right to at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity
and consent to a form of distribution other than a Qualified
Joint and Survivor Annuity;
(B) the Member, after receiving the notice, affirma-
tively elects (with spousal consent) to waive the Qualified
Joint and Survivor Annuity; and,
(C) Distribution in accordance with the affirmative
election does not commence before the expiration of the 7-day
period that begins the day after the explanation of the
Qualified Joint and Survivor Annuity is provided to the
participant.
(b) Normal Form of Distribution. Unless otherwise
elected in accordance with Section 10.3 and subject to
Section 10.7, distributions shall be made by the Trustee as
soon as practicable after the Valuation Date next following
the Member's (or the Member's Beneficiary's as the case may
be) election and written consent to receive a distribution
of the vested value of such Member's Account, in a single
sum in cash except that (i) at the Member's option Employer
Securities held in the Member's Account may be distributed
in kind and (ii) in the discretion of the Committee, a note
with respect to a Participant's loan from such Member's
Compensation Deferral Account may be distributed in kind.
(c) Notwithstanding any provision of this Plan to the
contrary, to the extent that any optional form of benefit
under this Plan permits a distribution prior to the Employ-
ee's retirement, death, disability, or severance from em-
ployment, and prior to plan termination, the optional form
of benefit is not available with respect to benefits attrib-
utable to assets (including the post-transfer earnings
thereon) and liabilities that are transferred, within the
meaning of section 414(1) of the Internal Revenue Code, to
this Plan from a money purchase pension plan qualified under
section 401(a) of the Internal Revenue Code (other than any
portion of those assets and liabilities attributable to
voluntary employee contributions).
10.3 Alternate Form of Distribution. A Member may request
to have the value of such Member's Accounts distributed in a
manner other than in accordance with Section 10.2. For any
portion of such Member's benefits accrued before May 1, 1995 that
become distributable under the Plan after May 1, 1995 such
alternate form of payment may be an annuity contract pursuant to
Section 10.8 or periodic installments of all benefits commencing
at such time as the Member shall elect in accordance with the
Plan payable over a fixed period not to exceed the lesser of ten
years or the life expectancy of the Member at the time payments
commence. Payment of any interest in the Company Stock Fund in a
Member's Accounts, if any, to which the Member has a nonforfeit-
able interest may be made in cash solely for the purpose of
effecting such an alternate form of distribution.
Distributions will be made in accordance with the require-
ments of the regulations under Code Section 401(a)(9), including
the minimum distribution incidental benefit requirements of
Proposed Regulations Section 1.401(a)(9)-2. Such minimum distri-
bution requirements shall supersede any distribution options in
the Plan that are inconsistent therewith.
10.4 Identity of Payee. The determination of the Committee
as to the identity of the proper payee of any benefit under the
Plan and the amount of such benefit properly payable shall be
conclusive, and payment in accordance with such determination
shall constitute a complete discharge of all obligations on
account of such benefit.
10.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this
Plan shall be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment, or
other legal processes, or encumbrance of any kind. Any
attempt to alienate, sell, transfer, assign pledge or
otherwise encumber any such benefits, whether currently
or thereafter payable, shall be void. No benefit, nor
any fund which may be established for the payment of
such benefits, shall, in any manner, be liable for or
subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge
or otherwise encumber benefits to which such person may
become entitled under this Plan, or if by reason of
such person's bankruptcy or other event happening at
any time, such benefits would devolve upon any other
person or would not be enjoyed by the person entitled
thereto under the Plan, then the Committee, in its
discretion, may terminate the interest in any such
benefits of the person entitled thereto under the Plan
and hold or apply them to or for the benefit of such
person entitled thereto under the Plan or such person's
spouse, children or other dependents, or any of them,
in such manner as the Committee may deem proper.
(b) Notwithstanding Section 10.5(a), the Trustee
(i) shall comply with an order entered on or
after January 1, 1985, determined by the Committee to
be a Qualified Domestic Relations Order as provided in
Section 10.6 and
(ii) may treat an order entered before January 1,
1985, as a Qualified Domestic Relations Order even if
it does not meet the requirements of Section 10.6.
(iii) shall comply with a Federal tax levy made
pursuant to Code Section 6331 and with collection
proceedings by the United States on a judgment result-
ing from an unpaid tax assessment.
10.6 Qualified Domestic Relations Order.
(a) The Plan shall comply with the provisions of Code
Section 414(p) relating to qualified domestic relations
orders and all regulations pertaining thereto.
(b) An alternate payee's interest in the Plan will be
distributed in the form of a single sum as soon as practica-
ble after a proposed order is determined to be a qualified
domestic relations order.
10.7 Commencement of Benefits. Unless a Member elects
otherwise, the payment of benefits under the Plan 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 Member attains age 65;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an
Affiliate is terminated.
provided that, except as provided in Section 10.10, no benefits
shall be distributed unless the Member has filed a claim for
benefits until the Valuation Date immediately preceding the
Required Beginning Date and further provided that benefits shall
commence to be distributed to the Member not later than the
Member's Required Beginning Date.
10.8 Annuities. If the form of distribution is to be an
annuity contract, it may be in such form and with such provisions
as the Member or the Member's Beneficiary, as the case may be,
may elect which are available for purchase from an insurance
company including, but not limited to, a full cash refund life
annuity, an annuity with income for life or an annuity with
income for a period certain (payable at least annually). Such
distribution is to be provided through the purchase from an
insurance company and distribution from the Trust Fund of a
nontransferable annuity contract; provided the benefit under such
annuity contract cannot be paid to anyone other than the Member
prior to the Member's death, and if a joint and survivor annuity
is provided, unless such joint annuitant shall be the Member's
spouse, the actuarial value of the Member's benefits, as of the
date benefit payments commence, shall be more than 50 percent
(50%) of the Member's vested Accounts.
(a) Limitation on Member Elections.
Notwithstanding any elections made by the Member,
benefit payments shall be made over a period not in
excess of the life of the Member or the lives of the
Member and the Member's Beneficiary or the Member's
life expectancy or the joint and last survivor life
expectancy of the Member and the Member's Beneficiary.
In the event the annuity benefits have commenced to be
paid to a Member before the Member's death the remain-
ing interest will be distributed at least as rapidly as
under the election made by the Member prior to the date
of death.
(b) Qualified Joint and Survivor Annuities.
Notwithstanding the foregoing provisions of this Sec-
tion 10.8, in the case of a Member who has elected to
receive an annuity form of benefit, distribution shall
be in the form of a Qualified Joint and Survivor Annu-
ity, unless the Member with the Member's spouse's con-
sent as provided in Section 10.9 elects to receive a
different form of annuity. The term "Qualified Joint
and Survivor Annuity" means an annuity payable to the
Member for life and, if the Member's spouse survives
the Member, a survivor annuity payable to the spouse
for life in an amount equal to 50 percent (50%) of the
annuity payable to the Member. If the Member who has
elected to receive an annuity form of benefit is not
married, subject to Section 10.6 (Qualified Domestic
Relations Order), the annuity shall be paid in the form
of a single life annuity unless the Member waives the
single life annuity. The amount of the benefits pay-
able under a Qualified Joint and Survivor Annuity shall
be the amount which can be purchased from an insurance
company with the Member' Accounts.
(c) A Member who elects to receive benefits in
the form of a life annuity and to whom benefits would
be payable in the form of a Qualified Joint and Survi-
vor Annuity pursuant to this Section 10.8 shall have
the right to waive a Qualified Joint and Survivor Annu-
ity, such waiver shall be consented to by the Member's
spouse in writing in accordance with Section 10.9 by
delivering written notice to the Committee, at any time
within the 90-day period prior to the annuity starting
date, to receive a different form of an annuity, the
Committee shall within a reasonable period of time
provide the Member, by personal delivery or first class
mail, with a written explanation of:
(i) the terms and conditions of the Quali-
fied Joint and Survivor Annuity;
(ii) the Member's right to make, and
the effect of, an election to waive the Qual-
ified Joint and Survivor Annuity;
(iii) the rights of the Member's spouse
to consent to the Member's election to waive
the Qualified Joint and Survivor Annuity and
the effect of consenting to such waiver; and
(iv) the Member's right to make, and
the effect of, a revocation of an election to
waive the Qualified Joint and Survivor Annu-
ity.
Any election made by a Member pursuant to Sections 10.8(b)
and 10.8(c) may be revoked by such Member by delivering written
notice to the Committee at any time prior to the Member's annuity
starting date and, once revoked, may be made again at any time by
delivering written notice to the Committee prior to the Member's
annuity starting date.
10.9 Spousal Consent. A valid spousal consent to the
Member's naming of a Beneficiary other than the Member's spouse
or to the Member's waiver of a Qualified Joint and Survivor
Annuity as defined in Section 10.8(b) shall be designated:
(a) in a writing acknowledging the effect of the
consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises
the consent;
provided that, notwithstanding the provisions of this Article X,
the consent of a Member's spouse shall not be required if it is
established to the satisfaction of the Plan Administrator that
such consent may not be obtained because there is no spouse,
because the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe.
10.10 Payments Without Election. Notwithstanding any other
provision of this Article X, if a Member or a Beneficiary is
entitled to a distribution and if the vested value of a Member's
Account or the vested value of the Beneficiary's share of the
Member's Account before benefits are paid or commence to be paid
hereunder does not exceed (and at the time of any previous
distribution did not exceed) $5,000, the Committee may in accord-
ance with uniform and nondiscriminatory rules direct the immedi-
ate distribution of such benefit to the person entitled thereto
regardless of any election or consent of the Member, the Member's
spouse or other Beneficiary. Additionally, if a Member has
reached his or her Required Beginning Date the Committee may
direct that required annual minimum distributions be made in
accordance with Code Section 401(a)(9) and the regulations there-
under.
10.11. Trustee to Trustee Transfers.
(a) A Member who receives an Eligible Rollover
Distribution after December 31, 1992 may elect to have such
distribution paid directly to an Eligible Retirement Plan by
specifying in the Appropriate Notice the Eligible Retirement
Plan to which such distribution is to be paid in a direct
trustee to trustee transfer pursuant to such uniform rules
as to the form and time of transfer as the Committee shall
prescribe.
(b)(i) "Eligible Rollover Distribution." An Eligible Rollover
Distribution is any distribution of all or a por-
tion of the balance to the credit of the Member distributee,
except that an Eligible Rollover Distribution does not
include: any distribution that is one of a series of sub-
stantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
Member distributee or the joint lives (or joint life expec-
tancies) of the Member distributee and the Member's desig-
nated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the por-
tion of any distribution that is not includible in gross
income ( determined without regard to the exclusion for net
unrealized appreciation with respect to Employer Securi-
ties).
(b)(ii) "Eligible Retirement Plan." An Eligible Retirement
Plan is an individual retirement account de-
scribed in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section
401(a) of the Code, that accepts the Member distribute-
e's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the sur-
viving spouse of a Member, an Eligible Retirement Plan
is an individual retirement account or an individual
retirement annuity.
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. The Committee shall be the Plan
Administrator:
(a) The Committee shall administer, enforce and
interpret the Plan and the trust agreement established
hereunder and shall have the powers necessary thereto,
including but not by way of limitation the powers to exer-
cise its responsibilities in accordance with Sections 1.3
(Appropriate Notice), 1.9 (Compensation), 1.21 (Enrollment
Date), 1.29 (Leave of Absence), 1.42 (Total and Permanent
Disability), Article II (Eligibility and Membership) 3.1
(Compensation Deferral Contributions), 3.2 (Changes and
Suspension of Contributions), 4.1 (Limitations), 6.1 (Main-
tenance of Accounts), 6.2 (Valuations), Article VIII (In-
vestment of Accounts), Article IX (Withdrawals and Loans
During Employment), 12.6 (Disbursement of Funds), Article
XIV (Miscellaneous), and the remainder of this Article XI,
and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 12.2
(Trustee), and
(c) Authority to direct the investment of the Plan's
funds shall be delegated to an Investment Manager in accor-
dance with Section 12.3 (Investment Manager).
With respect to all other responsibilities of the Plan
Administrator the Committee shall act through its duly authorized
officers and agents.
11.2 Board of Directors. With respect to Sections 5.1
(Amount of Employer Matching Contributions), 11.8 (Personal
Liability), 13.1 (Right to Amend) and 13.2 (Suspension or Termi-
nation) the Employer shall act only by or pursuant to, a resolu-
tion of the Board of Directors.
11.3 Appointment of the Committee. The Committee shall be
the Benefits Administration Committee.
11.4 Compensation, Expenses. All proper expenses required
for the administration of the Plan incurred by the Committee, the
Employer, an Investment Manager or the Trustee for accounting,
legal and other professional, consulting or technical services,
including fees and expenses of a recordkeeper, the Trustee or any
Investment Manager shall be paid by the Trust.
11.5 Committee Actions, Agents. The Committee may appoint
such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties and
may delegate to such agents such powers and duties as the Commit-
tee may deem expedient or appropriate.
Any action of the Committee, including but not by way of
limitation, instructions to the Trustee, shall be evidenced by
the signature of a member who has been so authorized by the
Committee to sign for it, and the Trustee shall be fully protect-
ed in acting thereon. A certificate of the secretary or an
assistant secretary of the Committee setting forth the name of
the members thereof shall be sufficient evidence at all times as
to the persons then constituting the Committee.
11.6 Committee Meetings. The Committee shall hold meetings
upon such notice, at such time and place as they may determine.
The Committee shall act by a majority of its members at the time
in office and such action may be taken from time to time by a
vote at a meeting or in writing without a meeting. A majority of
the members of the Committee at the time in office shall consti-
tute a quorum for the transaction of business.
11.7 Authority and Duties of the Committee. The Committee
may from time to time establish rules for the administration of
the Plan. The Committee shall have the exclusive right to
interpret the Plan and to decide any matters arising thereunder
in connection with the administration of the Plan. It shall
endeavor to act by general rules so as not to discriminate in
favor of any person. Its decisions and the records of the
Committee shall be conclusive and binding upon the Employer,
Members and all other persons having an interest under the Plan.
No member of the Committee shall be disqualified from exercising
the powers and discretion herein conferred by reason of the fact
that the exercise of any such power or discretion may affect the
payment of benefits to such member under the Plan; however, no
member may vote on a matter relating exclusively to such member.
To the extent that it is administratively feasible, the period of
notice required for Members' elections to commence, change or
suspend contributions hereunder or to make or change investment
elections for either future contributions or existing accounts
may be relaxed, reduced or eliminated by the Committee in accor-
dance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all records and
other data as may be necessary for the administration of the
Plan.
11.8 Personal Liability. To the extent not contrary to the
provisions of ERISA, no member of the Committee, officer, direc-
tor or employee of an Employer shall be personally liable for
acts done in good faith hereunder unless resulting from such
member's own negligence or willful misconduct. Each such member
of the Committee, officer and director shall be indemnified by
the Employer against expenses reasonably incurred by such member
in connection with any action to which he may be a party by
reason of such member's responsibilities hereunder, except in
relation to matters as to which such member shall be adjudged in
such action to be liable for negligence or misconduct in the
performance of such member's duty. However, nothing in this Plan
shall be deemed to relieve any person who is a fiduciary under
the Plan for purposes of ERISA from any responsibility or liabil-
ity which such Act shall impose upon such member.
11.9 Dealings Between the Committee and Individual Members.
Any notice required to be given to, or any document required to
be filed with, the Committee will be properly given or filed if
mailed by registered or certified mail, postage prepaid, or
delivered to the Chairman of the Benefits Administration Commit-
tee, c/o U.S. Industries, Inc. 101 Wood Avenue South, Iselin, New
Jersey 08830, or to such other place as the Committee may hereaf-
ter from time to time designate.
The Committee shall make available to such Member for
examination, such of its records as pertain to the benefits to
which such Member shall be entitled under the Plan.
11.10 Information To Be Supplied by the Employer. The
Employer shall provide the Committee or its delegate with such
information as it shall from time to time need in the discharge
of its duties.
11.11 Records. The regularly kept records of the Committee
and the Employer shall be conclusive evidence of the Credited
Service and Service of an Employee, the Employee's Compensation,
age, marital status, status as an Employee, and all other matters
contained therein applicable to this Plan; provided that an
Employee may request a correction in the record of age or any
other disputed fact at any time prior to retirement. Such
correction shall be made if within 90 days after such request the
Employee furnishes the Committee in support thereof documentary
proof of age or the other disputed fact satisfactory to the
Committee.
11.12 Fiduciary Capacity. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the
Plan.
11.13 Fiduciary Responsibility. If a Plan fiduciary acts
in accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that a Member's spouse has consent-
ed to the naming of a Beneficiary other than the spouse or
that the consent of the Member's spouse may not be obtained
because there is no spouse, the spouse cannot be located or
other circumstances prescribed by the Secretary of the
Treasury by regulations, then to the extent of payments made
pursuant to such consent, revocation or determination, the
Plan and its fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or,
during any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in separately accounting for
the amounts which would have been payable to the alternate
payee during such period if the order had been determined to
be a Qualified Domestic Relations Order, in paying the
amounts separately accounted for to the person entitled
thereto if within 18 months the domestic relations order (or
a modification thereof) is determined to be a Qualified
Domestic Relations Order, in paying such amounts to the
person entitled thereto if there had been no order if within
18 months the domestic relations order is determined not to
be qualified or if the issue is not resolved within 18
months and in prospectively applying a domestic relations
order which is determined to be qualified after the close of
the 18-month period, then the obligation of the Plan and its
fiduciaries to the Member and each alternate payee shall be
discharged to the extent of any payment made pursuant to
such acts.
11.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit
an application for benefits ("Claims") to the Committee or
to such other person as may be designated by the Committee
in writing in such form as is provided or approved by the
Committee. A Claimant shall have no right to seek review of
a denial of benefits, or to bring any action in any court to
enforce a Claim prior to filing a Claim and exhausting all
rights to review in accordance with this Section.
When a Claim has been filed properly, such Claim
shall be evaluated and the Claimant shall be notified
of the approval or the denial of the Claim within
ninety (90) days after the receipt of such Claim unless
special circumstances require an extension of time for
processing the claim. If such an extension of time for
processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termi-
nation of the initial ninety (90) day period, which
notice shall specify the special circumstances requir-
ing an extension and the date by which a final decision
will be reached (which date shall not be later than one
hundred and eighty (180) days after the date on which
the Claim was filed). A Claimant shall be given a
written notice in which the Claimant shall be advised
as to whether the Claim is granted or denied, in whole
or in part. If a Claim is denied, in whole or in part,
the notice shall contain (1) the specific reasons for
the denial, (2) references to pertinent Plan provisions
upon which the denial is based, (3) a description of
any additional material or information necessary to
perfect the Claim and an explanation of why such mate-
rial or information is necessary, and (4) the
Claimant's rights to seek review of the denial.
(b) If a Claim is denied, in whole or in part, the
Claimant shall have the right to (i) request that the
Committee (or such other person as shall be designated
in writing by the Committee) review the denial, (ii)
review pertinent documents, and (iii) submit issues and
comments in writing, provided that the Claimant files a
written request for review with the Committee within
sixty (60) days after the date on which the Claimant
received written notification of the denial. Within
sixty (60) days after a request for review is received,
the review shall be made and the Claimant shall be
advised in writing of the decision on review, unless
special circumstances require an extension of time for
processing the review, in which case the Claimant shall
be given a written notification within such initial
sixty (60) day period specifying the reasons for the
extension and when such review shall be completed
within one hundred and twenty (120) days after the date
on which the request for review was filed. The deci-
sion on review shall be forwarded to the Claimant in
writing and shall include specific reasons for the
decision and references to Plan provisions upon which
the decision is based. A decision on review shall be
final and binding on all persons for all purposes. If
a Claimant shall fail to file a request for review in
accordance with the procedures herein outlined, such
Claimant shall have no rights to review and shall have
no right to bring action in any court and the denial of
the Claim shall become final and binding on all persons
for all purposes.
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund. All assets of the Plan shall be held in
trust as a Trust Fund for the exclusive benefit of Members and
their Beneficiaries, and no part of the corpus or income shall be
used for or diverted to any other purpose. No person shall have
any interest in or right to any part of the Trust Fund, except to
the extent provided in the Plan.
12.2 Trustee. All contributions to the Plan shall be paid
to a Trustee or Trustees which shall be appointed from time to
time by the Company by appropriate instrument with such powers in
the Trustee as to control and disbursement of the funds as the
Company shall approve and as shall be in accordance with the
Plan. The Company may remove any Trustee at any time, upon
reasonable notice and upon such removal or upon the resignation
of any Trustee the Company shall designate a successor Trustee.
12.3 Investment Manager. In accordance with the terms of
the trust agreement, the Company may appoint one or more Invest-
ment Managers (individuals and/or other entities), who may
include the Trustee and who are collectively referred to herein
as the Investment Manager, to direct the investment and reinvest-
ment of part or all of the Plan's funds that are not invested in
Employer Securities. The Company may change the appointment of
the Investment Manager from time to time.
12.4 Purchase and Holding of Securities. As soon as
convenient after receiving contributions, the Trustee shall:
(a) in the case of contributions which are to be in-
vested in Employer Securities purchase Employer Securities
in the open market, and register and hold such securities in
the name of the Trustee or its nominee;
(b) in the case of contributions which are to be
invested in the Fixed Income Fund, purchase group annuity
contracts or make other investment arrangements that in the
aggregate will provide the target rate of return; and,
(c) In the case of any of the managed funds listed in
Section 8.1 (c) through (j), purchase and hold shares in
such funds in accordance with the directions of Plan Mem-
bers.
12.5 Voting of Employer Securities. For shareholders'
meetings Members shall be furnished proxy material and a form for
instructing the Trustee how to vote the Employer Securities
represented by units credited to their Accounts, and the Trustee
shall vote or otherwise exercise shareholder rights with respect
to such Employer Securities as instructed. The Trustee shall
hold such instructions in confidence and shall not divulge them
to anyone, including, but not limited to, the Employer, its
officers or employees.
Shares for which no instructions are received shall be
voted by the Trustee in the same proportion as those shares for
which instructions have been received. With respect to the
exercise of shareholder's rights to sell or retain the Employer
Securities represented by units credited to a Member's Accounts
in extraordinary instances involving an unusual price and terms
and conditions for such securities such as a tender offer, the
Trustee shall act in accordance with the Committee's instruc-
tions.
12.6 Disbursement of Funds. The funds held by the Trustee
shall be applied, in the manner determined by the Committee, to
the payment of benefits to such persons as are entitled thereto
in accordance with the Plan.
The Committee shall determine the manner in which the funds
of the Plan shall be disbursed in accordance with the Plan,
including the form of voucher or warrant to be used in authoriz-
ing disbursements and the qualification of persons authorized to
approve and sign the same and any other matters incident to the
disbursement of such funds.
12.7 Exclusive Benefit of Members. All contributions under
the Plan shall be paid to the Trustee and deposited in the Trust
Fund and shall be held, managed and distributed solely in the
interest of the Members and beneficiaries for the exclusive
purpose of (1) providing benefits to Members and beneficiaries
and (2) defraying reasonable administrative expenses of the Plan
and the Trust, to the extent such expenses are not paid by the
Company or an Affiliate provided that:
(a) if a timely determination letter request is filed and
the Plan is denied initial qualification under Section
401(a) of the Code, contributions conditioned upon such
qualification shall be returned to the Company or the Affil-
iate making such contributions within one year of the denial
of qualification;
(b) if, and to the extent, a deduction for a contribution
under Section 404 of the Code is disallowed, contributions
conditioned upon deductibility shall be returned to the
Company or the Affiliate making such contribution within one
year after the disallowance of the deduction; and
(c) if, and to the extent, a contribution is made through a
good faith mistake of fact, such contribution shall be
returned to the Company or the Affiliate making such contri-
bution within one year.
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. The right to modify or amend the
provisions of the Plan in whole or in part at any time or from
time to time is reserved to the Company, but no such amendment
shall divest any Member of any amount previously credited to a
Member's Accounts or, except to the extent permitted by the
Secretary of the Treasury by regulation, shall eliminate with
respect to a Member's Account balance at the time of such amend-
ment an optional form of benefit, and further provided that no
part of the assets of the Trust Fund shall, by reason of any
modification or amendment, be used for or diverted to, purposes
other than for the exclusive benefit of Members and their Benefi-
ciaries, under the Plan.
13.2 Suspension or Termination. The Employer may at any
time suspend Employer Matching Contributions and Compensation
Deferral Contributions in whole or in part. The suspension of
Employer Matching Contributions and Compensation Deferral Contri-
butions shall not in itself constitute a termination of the Plan.
The Employer may at any time terminate or discontinue the Plan by
filing with the Committee a certified copy of the resolution of
its board of directors authorizing the termination or discontinu-
ance.
If the Plan is terminated, no further contributions shall be
made by the Employer and the Account of each Member shall be
applied for the Member's (or the Member's Beneficiary's) benefit
either by payment in cash or in kind, or by the continuation of
the Trust Fund in accordance with the trust instrument and the
provisions of the Plan as though the Plan were otherwise in full
force and effect.
13.3 Merger, Consolidation of Transfer. In the case of any
merger, or consolidation with, or transfer of assets or liabili-
ties to any other plan, each Member in the Plan would (if the
Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before the merger consolidation, or transfer (if the
Plan had then terminated).
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration. Whenever, in the administra-
tion of the Plan, any action is required by the Employer or the
Committee, including, but not by way of limitation, action with
respect to eligibility or classification of employees, contribu-
tions or benefits, such action shall be uniform in nature as
applied to all persons similarly situated and no such action
shall be taken which will discriminate in favor of Members who
are officers or significant shareholders of the Employer or
persons whose principal duties consist of supervising the work of
other employees or highly compensated Members.
14.2 Payment Due an Incompetent. If the Committee deter-
mines that any person to whom a payment is due hereunder is
incompetent by reason of physical or mental disability, the
Committee shall have power to cause the payments becoming due to
such person to be made to another for the benefit of the incompe-
tent, without responsibility of the Committee or the Trustee to
see to the application of such payment. Payments made in accor-
dance with such power shall operate as a complete discharge of
all obligations on account of such payment of the Committee, the
Trustee and the Trust Fund.
14.3 Source of Payments. All benefits under the Plan shall
be paid or provided solely from the Trust Fund and the Employer
assumes no liability or responsibility therefor, except to the
extent required by law.
14.4 Plan Not a Contract of Employment. Nothing herein
contained shall be deemed to give any Eligible Employee or Member
the right to be retained in the employ of the Employer or to
interfere with the right of the Employer to discharge any Eligi-
ble Employee or Member at any time.
14.5 Applicable Law. Except to the extent governed by
Federal law the Plan shall be administered and interpreted in
accordance with the laws of the State of New York.
14.6 Unclaimed Amounts. It shall be the duty and responsi-
bility of a Member or a Beneficiary to keep the Committee ap-
prised of such Member's whereabouts and of such Member's current
mailing address. Unclaimed amounts shall consist of the amounts
of the Accounts of a retired, deceased or terminated Member which
cannot be distributed because of the Committee's inability, after
a reasonable search, to locate a Member or a Member's Beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be Forfei-
tures for the Plan Year in which such two-year period shall end.
Such Forfeitures shall be treated as provided in Section 5.2.
If an unclaimed amount is subsequently properly claimed by
the Member or the Member's Beneficiary ("Reclaimed Amount") and
unless an Employer in its discretion makes a contribution to the
Plan for such year in an amount sufficient to pay such Reclaimed
Amount to the extent that the Reclaimed Amount originated as an
unclaimed amount, it shall be charged against Forfeitures for the
Plan Year and, to the extent such Forfeitures are not sufficient,
shall be treated as an expense of the Trust Fund.
ARTICLE XV
Top Heavy Provisions
15.1 Application. The definitions in Section 15.2 shall
apply under this Article XV and the special rules in Section 15.3
shall apply in accordance with Code Section 416, notwithstanding
any other provisions of the Plan, for any Plan Year in which the
Plan is a Top Heavy Plan and for such other Plan Years as may be
specified herein. This Article XV shall have no effect on the
amount of or eligibility for benefits under the Plan of a Member
unless and until the Plan becomes a Top Heavy Plan.
15.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Article XV.
(a) "Aggregate Employer Matching Contributions" means
the sum of all Employer Matching Contributions including
amounts contributed as a result of a salary reduction agree-
ment and Forfeitures under this Plan allocated for a Member
to the Plan and employer contributions and forfeitures
allocated for the Member to all Related Defined Contribution
Plans in the Aggregation Group; provided, however, that for
Plan Years beginning before January 1, 1985, Compensation
Reduction Contributions under this Plan and employer contri-
butions attributable to compensation reduction or similar
arrangement under Related Defined Contribution Plans shall
not be included in Aggregate Employer Matching Contribu-
tions.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan,
unless inclusion of Related Plans in the Permissive Aggrega-
tion Group in the Aggregation Group would prevent the Plan
from being a Top Heavy Plan, in which case "Aggregation
Group" means the group of plans consisting of the Plan and
each other Related Plan in a Permissive Aggregation Group
with the Plan.
(i) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during
the Plan Year that contains the Determination Date or
any of the four preceding Plan Years,
(A) had a Member who was a Key Employee, or
(B) was necessary to be considered with a
plan in which a Key Employee participated in order
to enable the plan in which the Key Employee par-
ticipated to meet the requirements of Section
401(a)(4) and Section 410 of the Internal Revenue
Code.
If the Plan is not described in (A) or (B) above,
it shall not be part of a Mandatory Aggregation Group.
(ii) "Permissive Aggregation Group" means the
group of plans consisting of (A) the plans, if any, in
a Mandatory Aggregation Group with the Plan, and (B)
any other Related Plan, that when considered as a part
of the Aggregation Group, does not cause the Aggrega-
tion Group to fail to satisfy the requirements of
Section 401(a) and Section 410 of the Code. A Related
Plan in (B) of the preceding sentence may include a
simplified employee pension plan, as defined in Code
Section 408(k), and a collectively bargained plan, if
when considered as a part of the Aggregation Group such
plan does not cause the Aggregation Group to fail to
satisfy the requirements of Section 401(a)(4) and
Section 410 of the Code considering, if the plan is a
multi-employer plan as described in Code Section 414(f)
or a multiple employer plan as described in Code Sec-
tion 413(c), benefits under the plan only to the extent
provided to employees of the employer because of ser-
vice with the employer, and, if the plan is a simpli-
fied employee pension plan, only the employer's contri-
bution to the plan.
(c) "Determination Date" means, with respect to a Plan
Year, the last day of the preceding Plan Year or, in the
case of the first Plan Year, the last day of such Plan Year.
If the Plan is aggregated with other plans in the Aggrega-
tion Group, the Determination Date for each other plan shall
be, with respect to any Plan Year, the Determination Date
for each such other plan which falls in the same calendar
year as the Determination Date for the Plan.
(d) "Key Employee" means, for the Plan Year containing
the Determination Date, any person or the beneficiary of any
person who is an employee or former employee of an Employer
or an Affiliate as determined under Code Section 416(i) and
who, at any time during the Plan Year containing the Deter-
mination Date or any of the four (4) preceding Plan Years
(the "Measurement Period"), is a person described in para-
graph (i), (ii), (iii) or (iv), subject to paragraph (v):
(i) An officer of the Employer or an officer of
an Affiliate who:
(A) In any Measurement Period, in the case
of Plan Years beginning after December 31, 1983,
is an officer during the Plan Year and has annual
Compensation for the Plan Year in an amount great-
er than one hundred and fifty percent (150%) of
the amount in effect under Section 415(c)(1)(A) of
the Code for the calendar year in which such Plan
Year ends ($30,000 in 1984, adjusted in subsequent
years as determined in accordance with regulations
prescribed by the Secretary of the Treasury or his
delegate pursuant to the provisions of Section
415(d) of the Code): and
(B) In any Measurement Period, in the case
of a Plan Year beginning on or before January 1,
1984, is a officer during the Plan Year, regard-
less of his Compensation (except to the extent
that applicable law, regulations and rulings indi-
cate that the one hundred and fifty percent (150%)
requirement set forth in subparagraph (A) above is
applicable).
No more than a total of fifty (50) persons (or, if
lesser, the greater of three (3) persons or ten percent
(10%) of all persons or beneficiaries of persons who
are employees or former employees) shall be treated as
Key Employees under this paragraph (i) for any Measure-
ment Period. In the case of an Employer or an Affili-
ate which is not a corporation (I) in any Measurement
Period, in the case of a Plan Year beginning on or
before February 28, 1985, no persons shall be treated
as Key Employees under this paragraph (i); and (II) in
any Measurement Period, in the case of a Plan Year
beginning after February 28, 1985, the term "officer"
as used in this subsection (d) shall include adminis-
trative executives as described in Section 1.416-1(T-13)
of the Treasury Regulations.
(ii) One (1) of the ten (10) persons who, during
a Plan Year in the Measurement Period:
(A) have annual compensation from the Em-
ployer or Affiliate for such Plan Year greater
than the amount in effect under Section
415(c)(1)(A) of the Code for the calendar year in
which such Plan Year ends $30,000 in 1984, adjust-
ed in subsequent years as determined in accordance
with regulations prescribed by the Secretary of
the Treasury or his delegate pursuant to the pro-
vision of Section 415(d) of the Code; and
(B) own (or are considered as owning within
the meaning of Code Section 318) in such Plan
Year, the largest percentage interests in the
Employer or a Corporate Group, in such Plan Year,
provided that no person shall be treated as a Key
Employee under this paragraph unless he owns more
than one-half of one percent (0.5%) interest in
the Employer or Corporate Group.
No more than a total of ten (10) persons or bene-
ficiaries of persons who are employees or former em-
ployees shall be treated as Key Employees under this
paragraph (2) for any Measurement Period.
(iii) A person who, for a Plan Year in the Mea-
surement Period, is a more than five percent (5%) owner
(or is considered as owning more than five percent (5%)
within the meaning of Code Section 318) of the Employer
or Affiliate.
(iv) A person who, for a Plan Year in the Mea-
surement Period, is a more than one percent (1%) owner
(or is considered as owning more than one percent (1%)
within the meaning of Code Section 318) of the Employer
or Affiliate and has an annual Compensation for such
Plan Year of more than $150,000.
(v) If the number of persons who meet the re-
quirements to be treated as Key Employees under para-
graph (i) or (ii) exceed the limitation on the number
of Key Employees to be counted under paragraph (i) or
(ii), those persons with the highest annual Compensa-
tion in a Plan Year in the Measurement Period for which
the requirements are met and who are within the limita-
tion on the number of Key Employees will be treated as
Key Employees.
If the requirements of paragraph (i) or (ii) are met by
a person in more than one (i) Plan Year in the Measure-
ment Period, each person will be counted only once
under paragraph (i) or (ii). For the purposes of the
preceding sentence under paragraph (i), the Plan Year
in the Measurement Period in which a person who was an
officer and had the highest annual Compensation shall
be used to determine whether the person will be treated
as a Key Employee and under paragraph (i), the Plan
Year in the Measurement Period in which the ownership
percentage interest is the greatest shall be used to
determine whether the person will be treated as a Key
Employee.
Notwithstanding the above provisions of paragraph
(v), a person may be counted in determining the limita-
tion under both paragraphs (i) and (ii). In determin-
ing the sum of the Present Value of Accrued Benefits
for Key Employees under subsection (f) of this Section,
the Present Value of Accrued Benefits for any person
shall be counted only once.
(e) "Non-Key Employee" means for the Plan Year con-
taining the Determination Date a person or the beneficiary
of a person who had an account balance in the Plan or an
account balance in any Related Plan in the Aggregation Group
during the Plan Year containing the Determination Date or
any of the four (4) preceding Plan Years and who is not a
Key Employee.
(f) "Present Value of Accrued Benefits" means, for any
Plan Year, an amount equal to the sum of (i), (ii) and (iii)
for each person, who in the Plan Year containing the Deter-
mination Date, was a Key Employee or a Non-Key Employee:
(i) Subject to (iv) below, the value of a Member's
Accounts under the Plan and each Related Defined Con-
tribution Plan in the Aggregation Group, determined as
of the Valuation Date coincident with or immediately
preceding the Determination Date, adjusted for contri-
butions due as of the Determination Date, as follows:
(A) in the case of a plan not subject to the
minimum funding requirements of Section 412 of the
Code, by including the amount of any contributions
actually made after the valuation date but on or
before the Determination Date, and, in the first
plan year of a plan, by including contributions
made after the Determination Date that are allo-
cated as of a date in that first plan year; and
(B) in the case of a plan that is subject to
the minimum funding requirements, by including the
amount of any contributions that would be allocat-
ed as of a date not later than the Determination
Date, plus adjustments to those amounts as requi-
red under applicable rulings, even though those
amounts are not yet required to be contributed or
allocated (e.g., because they have been waived)
and by including the amount of any contributions
actually made (or due to be made) after the valua-
tion date but before the expiration of the extend-
ed payment period in Section 412(c)(10) of the
Code.
(ii) Subject to (iv) below, the sum of the actu-
arial present values of a person's accrued benefits
under each Related Defined Benefit Plan in the Aggrega-
tion Group, expressed as a benefit commencing at normal
retirement date (or the person's attained age, if
later) determined in accordance with Code Section
416(g) based on the following actuarial assumptions:
(A) Interest rate 5% compounded; and
(B) 80% of the rates underlying the 1984
Unisex Pension Mortality Table, adjusted by apply-
ing a 3-year age setback for the Member's spouse,
where applicable;
The present value of an accrued benefit for any
person who is employed by an Employer maintaining
a plan on the Determination Date is determined as
of the most recent valuation date which is within
a 12-month period ending on the Determination
Date, provided however that
(C) for the first plan year of the plan, the
present value for an employee is determined as if
the employee had a termination of employment (1)
on the Determination Date or (2) on such valuation
date but taking into account the estimated accrued
benefits as of the Determination Date, and
(D) for the second and subsequent plan years
of the plan, the accrued benefit taken into ac-
count for an employee is not less than the ac-
crued benefit taken into account for the first
plan year unless the difference is attributable to
using an estimate of the accrued benefit as of the
Determination Date for the first plan year and
using the actual accrued benefit as of the Deter-
mination for the second plan year.
For purposes of this paragraph (ii), the valuation date
is the valuation date used by the plan for computing
plan costs for minimum funding, regardless of whether a
valuation is performed that year.
If the plan provides for a nonproportional subsidy
as described in Treasury Regulations Section 1.416-1(T-26),
the present value of accrued benefits shall be
determined taking into account the value of nonpropor-
tional subsidized early retirement benefits and nonpro-
portional subsidized benefit options.
(iii) Subject to (iv) below, the aggregate value
of amounts distributed from the Plan and each Related
Plan in the Aggregation Group during the plan year that
includes the Determination Date or any of the four
preceding plan years including amounts distributed
under a termination plan which, if it had not been
terminated, would have been in the Aggregation Group.
(iv) The following rules shall apply in determin-
ing the Present Value of Accrued Benefits:
(A) Amounts attributable to qualified volun-
tary employee contributions, as defined in Section
219(e) of the Internal Revenue Code, shall be
excluded;
(B) In computing the Present Value of Ac-
crued Benefits with respect to rollovers or plan-to-plan
transfers, the following rules shall be
applied to determine whether amounts which have
been distributed during the five (5) year period
ending on the Determination Date from or accepted
into this Plan or any plan in the Aggregation
Group shall be included in determining the Present
Value of Accrued Benefits:
(I) Unrelated Transfers accepted into
the Plan or any plan in the Aggregation Group
after December 31, 1983 shall not be includ-
ed.
(II) Unrelated Transfers accepted on or
before December 31, 1983 and all Related
Transfers accepted at any time into the Plan
or any plan in the Aggregation Group shall be
included.
(III) Unrelated Transfers made from the
Plan or any plan in the Aggregation Group
shall be included.
(IV) Related Transfers made from the
Plan or any plan in the Aggregation Group
shall be included by the transferor plan (but
shall be counted by the accepting plan).
The accrued benefit of any individual who has not
received any Compensation from an Employer main-
taining the Plan (or a business which with the
Employer is an Affiliate) at any time during the
five (5) year period ending on the Determination
Date shall be excluded in computing the Present
Value of Accrued Benefits.
(g) "Related Plan" means any other defined benefit
plan or a defined contribution plan (as defined in Section
415(k) of the Code) maintained by an Employer or other
Affiliate, respectively called a "Related Defined Benefit
Plan" and a "Related Defined Contribution Plan".
(h) "Related Transfer" means a rollover or a plan-to
plan transfer which is either not initiated by the Employee
or is made between plans each of which is maintained by an
Employer or an Affiliate.
(i) A "Top Heavy Aggregation Group" means the Aggrega-
tion Group in any Plan Year for which, as of the Deter-mination Date,
the sum of the present Values of Accrued
Benefits for Key Employees under all plans in the Aggrega-
tion Group exceeds sixty percent (60%) of the sum of the
Present Values of Accrued Benefits for all employees under
all plans in the Aggregation Group; provided that, for
purposes of determining the sum of Present Values of Accrued
Benefits for all employees, there shall be excluded the
Present Values of Accrued Benefits of any Non-Key Employee
who was a Key Employee for any Plan Year preceding the Plan
Year that contains the Determination Date. For purposes of
applying the special rules herein with respect to a Super
Top Heavy Plan, a Top Heavy Aggregation Group will also
constitute a "Super Top Heavy Aggregation Group" if in any
Plan Year as of the Determination Date, the sum of the
Present Values of Accrued or Key Employees under all plans
in the Aggregation Group exceeds ninety percent (90%) of the
sum of the Present Values of Accrued Benefits for all em-
ployees under all plans in the Aggregation Group.
(j) "Top Heavy Plan" means the Plan in any Plan Year
which it is a member of a Top Heavy Aggregation Group,
including a Top Heavy Aggregation Group consisting solely of
the Plan. For purposes of applying the rules herein with
respect to a Super Top Heavy Plan, a Top Heavy Plan will
also constitute a "Super Top Heavy Plan" if the Plan in any
Plan Year is a member of a Super Top Heavy Aggregation Group
consisting solely of the Plan.
(k) "Unrelated Transfer" means a rollover or a plan-to-plan
transfer which is both initiated by the Employee and
(a) made from a plan maintained by an Affiliate to a plan
maintained by an Employer which is not an Affiliate or (b)
made to a plan maintained by an Affiliate from a plan main-
tained by an Employer which is not an Affiliate.
15.3 Special Top Heavy Provisions. For each Plan Year in
which the Plan is a Top Heavy Plan, the following rules shall
apply, except that the special provisions of this Section 15.3
shall not apply with respect to any employee who is covered by a
collective bargaining agreement between employee representatives
and one or more Employers unless participation by such employee
in the Plan has been agreed to by the parties to such agreement.
(a) Minimum Employer Matching Contributions.
(i) In any Plan Year in which the Plan is a Top
Heavy Plan, the Employers shall make additional Employ-
er Contributions to the Plan as necessary for each
Member who is employed on the last day of the Plan Year
and who is a Non-Key Employee to bring the amount of
each Member's Aggregate Employer Matching Contributions
for the Plan Year up to at least three percent (3%) of
each Member's Compensation, or if the Plan is not
required to be included in an aggregation group in
order to permit a defined benefit plan in the Aggrega-
tion Group to satisfy the requirements of Section
401(a)(4) or Section 410 of the Internal Revenue Code,
such lesser amount as is equal to the largest percent-
age of a Key Employee's Compensation (as limited in
accordance with Section 15.3(c)) allocated to the Key
Employee as Aggregate Employer Contributions.
(ii) Notwithstanding Section 15.3(a)(1), if there
is a Related Defined Benefit Plan in the Aggregation
Group, if a Non-Key Employee participates in both the
Plan and a Related Defined Benefit Plan and
(A) if the Related Defined Benefit Plan
provides the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then
no minimum Employer Contribution shall be required
under this Section 15.3(a).
(B) if the Related Defined Benefit Plan does
not provide the minimum benefit required under
Code Section 416(c)(1) for the Non-Key Employee,
then the minimum Aggregate Employer Contribution
under this Section 15.3(a) shall be five percent
(5%) of such Non-Key Employee's Compensation.
(iii) For purposes of determining whether a Non-Key Employee is
a Member entitled to have minimum
Employer Contributions made for such Member, a Non-Key
Employee will be treated as a Member even if he is not
otherwise a Member (or accrues no benefit) under the
Plan because:
(A) such Member has failed to complete the
requisite number of Hours of Service (if any)
after becoming a Member in the Plan,
(B) such Member is excluded from participa-
tion in the Plan (or accrues no benefit) merely
because his compensation is less than a stated
amount, or
(C) such Member is excluded from participa-
tion in the Plan (or accrues no benefit) merely
because of a failure to make mandatory employee
contributions or, if the Plan is a Plan described
in Section 401(k) of the Code, because of a fail-
ure to make elective 401(k) contributions.
(b) Vesting. For each Plan Year in which the Plan is
a Top Heavy Plan and for each Plan Year thereafter, the
vesting schedule under the Plan shall be not less favorable
than three (3) year cliff vesting under which each Member
shall be zero percent vested in the Employer Contributions
Account until such Member has three (3) years of Service
after which a Member shall be 100% vested in such Account;
provided that this vesting schedule shall not apply to the
Accrued Benefit of any Member who does not have an Hour of
Service in or after a Plan Year in which the Plan is Top
Heavy.
(c) Compensation. For each Plan Year in which the
Plan is a Top Heavy Plan, Compensation taken into account
under the Plan shall not exceed $200,000 (as at 1984, ad-
justed in subsequent years for the cost of living adjust-
ments determined in accordance with regulations prescribed
by the Secretary of the Treasury or his delegate pursuant to
the provisions of Section 416(d)(2) of the Code); provided
that the $200,000 limitation of Compensation shall not apply
for purposes of Section 4.3 and the limitations on Employee
Contributions in Section 3.1(b). Notwithstanding the pre-
ceding sentence, Compensation in excess of $200,000 (adjust-
ed as provided in the preceding sentence) for years before
the Plan became a Top Heavy Plan shall be taken into account
(to the extent otherwise provided in the Plan) in determin-
ing a person's Accrued Benefit accrued in such years, and
Compensation in excess of $200,000 (adjusted as provided in
the preceding sentence) for years after the Plan ceases to
be a Top Heavy Plan shall be taken into account (to the
extent otherwise provided in the Plan) in determining a
person's Accrued Benefit for all years, including years in
which the Plan was a Top Heavy Plan.
(d) Top Heavy Limitations.
(i) In computing the limitations under Section
4.3 hereof, if the Plan is a Top Heavy Plan and is not
a Super Top Heavy Plan, the special rules of Section
416(h) of the Internal Revenue Code shall be applied in
accordance with applicable regulations and rulings so
that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which
"1.25" would have been used, "1.00" shall be sub-
stituted and
(B) in determining the numerator of the
transition fraction described in Section
415(e)(6)(B) of the Internal Revenue Code by sub-
stituting $41,500 for $51,875 unless the special
requirements of Section 416(h)(2) of the Internal
Revenue Code have been satisfied.
(ii) In computing the limitations under Section
4.3 hereof, if the Plan is a Super Top Heavy Plan, the
special rules of Section 416(h) of the Code shall be
applied in accordance with applicable regulations and
rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which
"1.25" would have been used, "1.00" shall be sub-
stituted and
(B) in determining the numerator of the
transitional fraction described in Section
415(e)(6)(B) of the Internal Revenue Code, $41,500
shall be substituted for $51,875.
(e) Terminated Plan. If the Plan becomes a Top Heavy
Plan after it has formally been terminated, has ceased
crediting for benefit accruals and vesting and has been or
is distributing all plan assets to Members and their benefi-
ciaries as soon as administratively feasible or if a termi-
nated plan has distributed all benefits of Members and their
beneficiaries, the provisions of Section 15.3 shall not
apply to the Plan.
(f) Frozen Plans. If the Plan becomes a Top Heavy
Plan after contributions have ceased under the Plan but all
assets have not been distributed to Members or their benefi-
ciaries, the provisions of Section 15.3 shall apply to the
Plan.
15.4 Effect of Change in Applicable Legislation or Regula-
tion. In the event that Congress should provide by statute or
the Secretary of the Treasury should provide by regulation a
ruling, that the provisions of this Article XV are no longer
necessary for the Plan to meet the requirements of Section 401(a)
or other applicable provisions of the Code, such limitations
shall become void and shall no longer apply, without the necessi-
ty of further amendment to the Plan.
<PAGE>
SCHEDULE I
List of Participating
Employers Approved By The
Board of Directors; Special Limitations
On Eligibility; And, Names And
The Effective Dates of Prior Plans
Designated Employer Name and Effective Date
of Prior Plan
The Lighting Group The Lighting Group Retirement
Savings & Investment Plan
August 1, 1987
Leon Plastics Inc. Leon Plastics Inc. Retirement
Savings & Investment Plan
October 1, 1987
Huron Inc. Huron Inc. Retirement Savings
& Investment Plan
January 1, 1988
BiltBest Products, Inc. Spartus Corporation Retirement
Savings & Investment Plan
January 1, 1989
Rexair Inc. Rexair Inc. Retirement Savings
& Investment Plan
March 1, 1989
Garden State Tanning Inc. Garden State Tanning Inc.
Retirement Savings & Invest-
ment Plan
October 1, 1989
The Ertl Company Inc. The Ertl Company Inc. Retire-
ment Savings & Investment Plan
February 1, 1990
Bearing Inspection, Inc. Bearing Inspection, Inc. Re-
tirement Savings & Investment
Plan
April 1, 1991
Carisbrook Industries Inc. Carisbrook Industries Inc.
(Salaried Employees Only) Retirement Savings &
Investment Plan
October 1, 1993
O. Ames Co. (Hourly Employees O. Ames Co.
of the Woodings-Verona Division) Retirement Savings
& Investment Plan
April 1, 1997
Keller Ladders, Inc. Keller Ladders, Inc. Retire-
ment Savings & Investment Plan
January 1, 1997
Sunlite Casual Furniture, Inc. Sunlite Casual Furniture, Inc.
Retirement Savings & Invest-
ment Plan
March 2, 1997
<PAGE>
SCHEDULE II
Schedule of Employee Matching Contributions
Which Are Greater or Lesser Than 50%
Of That Portion Of A Member's
Compensation Deferral Contributions
Which Do Not Exceed 6% of Compensation
Eligible Employees Matching Percentages
BiltBest Products, Inc.
Employees Who Are Members
of Local #400 of The
Aluminum Brick and Glass
Workers International Union 25%
EXHIBIT 4.4(b)
USI CORPORATE OFFICE
RETIREMENT SAVINGS & INVESTMENT PLAN
(Restatement of January 1, 1997)
<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Appropriate Notice" . . . . . . . . . . . . . . . . . . 1
1.4 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . 1
1.5 "Board" or "Board of Directors" . . . . . . . . . . . . . 1
1.6 "Code". . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 "Committee" . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 "Company" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 "Compensation". . . . . . . . . . . . . . . . . . . . . . 1
1.10 "Compensation Deferral Contributions". . . . . . . . . . 2
1.11 "Compensation Deferral Contributions Account". . . . . . 2
1.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
1.13 "Eligible Employee". . . . . . . . . . . . . . . . . . . 2
1.14 "Employee" . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 "Employee Contributions" . . . . . . . . . . . . . . . . 2
1.16 "Employee Contributions Account" . . . . . . . . . . . . 3
1.17 "Employer" . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 "Employer Matching Contributions". . . . . . . . . . . . 3
1.19 "Employer Matching Contributions Account". . . . . . . . 3
1.20 "Employer Securities". . . . . . . . . . . . . . . . . . 3
1.21 "Enrollment Date". . . . . . . . . . . . . . . . . . . . 3
1.22 "Enrollment Period". . . . . . . . . . . . . . . . . . . 3
1.23 "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . 3
1.24 "Hour of Service". . . . . . . . . . . . . . . . . . . . 3
1.25 "Initial Enrollment Date". . . . . . . . . . . . . . . . 4
1.26 "Investment Fund". . . . . . . . . . . . . . . . . . . . 4
1.27 "Investment Manager" . . . . . . . . . . . . . . . . . . 4
1.28 "Leased Employee". . . . . . . . . . . . . . . . . . . . 5
1.29 "Leave of Absence" . . . . . . . . . . . . . . . . . . . 5
1.30 "Member" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 "Parental Leave. . . . . . . . . . . . . . . . . . . . . 5
1.32 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.33 "Plan Year". . . . . . . . . . . . . . . . . . . . . . . 6
1.34 "Prior Plan" . . . . . . . . . . . . . . . . . . . . . . 6
1.35 "Prior Plan Account" . . . . . . . . . . . . . . . . . . 6
1.36 "Required Beginning Date". . . . . . . . . . . . . . . . 6
1.37 "Retirement" . . . . . . . . . . . . . . . . . . . . . . 6
1.38 "Rollover Contribution". . . . . . . . . . . . . . . . . 6
1.39 "Rollover Contribution Account". . . . . . . . . . . . . 6
1.40 "Service". . . . . . . . . . . . . . . . . . . . . . . . 6
1.41 "Suspense Account" . . . . . . . . . . . . . . . . . . . 7
1.42 "Total and Permanent Disability" . . . . . . . . . . . . 7
1.43 "Trustee". . . . . . . . . . . . . . . . . . . . . . . . 7
1.44 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . 7
1.45 "Valuation Date" . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
Eligibility and Membership
2.1 Members on the Effective Date.. . . . . . . . . . . . . . 7
2.2 Eligible Employees on and after the Effective Date. . . . 7
2.3 Completion of Appropriate Notice. . . . . . . . . . . . . 8
2.4 Elections Upon Becoming A Member. . . . . . . . . . . . . 8
2.5 Beneficiary Designation.. . . . . . . . . . . . . . . . . 8
2.6 Transfers to or from Non-Covered Status.. . . . . . . . . 8
2.7 Rollover Contributions From Other Plans.. . . . . . . . . 9
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions.. . . . . . . . . . . 9
3.2 Changes and Suspension of Contributions.. . . . . . . . . 10
3.3 Transfer of Contributions to Trustee. . . . . . . . . . . 10
ARTICLE IV
Limitations on, and Distribution of, Excess Com-
pensation Deferral Contributions and Excess Em-
ployer Matching Contributions of Highly
Compensated Employees
4.1 Limitations. . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Control of Contributions and Distribution of Excess.. . . 12
4.3 Limitation of Annual Additions. . . . . . . . . . . . . . 14
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions.. . . . . . . . 18
5.2 Treatment of Forfeitures. . . . . . . . . . . . . . . . . 18
5.3 Transfer of Contributions to Trustee. . . . . . . . . . . 18
ARTICLE VI
Accounts
6.1 Maintenance of Accounts.. . . . . . . . . . . . . . . . . 18
6.2 Valuations. . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account.. . . . . . . . . 19
7.2 Other Accounts. . . . . . . . . . . . . . . . . . . . . . 20
7.3 Earlier Vesting in Employer Matching Contributions
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 20
7.4 Forfeitures.. . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Contribu-
tions Accounts. . . . . . . . . . . . . . . . . . . . . . 21
8.2 Redirection of Future Contributions.. . . . . . . . . . . 22
8.3 Reinvestment of Prior Contributions.. . . . . . . . . . . 22
8.4 Investment of Employer Matching Contributions Accounts. . 22
8.5 Statements of Accounts And Confirmation of Investment
Directions. . . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Correction of Errors. . . . . . . . . . . . . . . . . . . 22
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. . . . . . . . . . . . . . . . . . . . 23
9.2 Hardship Withdrawals. . . . . . . . . . . . . . . . . . . 23
9.3 Values. . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.4 Payment of Withdrawals. . . . . . . . . . . . . . . . . . 25
9.5 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE X
Distribution
10.2 Notice of Options and Normal Form of Distribution. . . . 28
10.3 Alternate Form of Distribution.. . . . . . . . . . . . . 28
10.4 Identity of Payee. . . . . . . . . . . . . . . . . . . . 29
10.5 Non-alienation of Benefits.. . . . . . . . . . . . . . . 29
10.6 Qualified Domestic Relations Order.. . . . . . . . . . . 30
10.7 Commencement of Benefits.. . . . . . . . . . . . . . . . 30
10.8 Spousal Consent. . . . . . . . . . . . . . . . . . . . . 30
10.9 Lump Sum Payment Without Election. . . . . . . . . . . . 31
10.10 Trustee to Trustee Transfers. . . . . . . . . . . . . . 31
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator.. . . . . . . . . . . . . . . . . . . 32
11.2 Board of Directors.. . . . . . . . . . . . . . . . . . . 32
11.3 Appointment of Committee.. . . . . . . . . . . . . . . . 33
11.4 Compensation, expenses.. . . . . . . . . . . . . . . . . 33
11.5 Committee Actions, Agents. . . . . . . . . . . . . . . . 33
11.6 Committee Meetings.. . . . . . . . . . . . . . . . . . . 33
11.7 Authority and Duties of the Committee. . . . . . . . . . 33
11.8 Personal Liability.. . . . . . . . . . . . . . . . . . . 34
11.9 Dealings Between Committee and Individual Members. . . . 34
11.10 Information to be Supplied by an Employer.. . . . . . . 34
11.11 Records.. . . . . . . . . . . . . . . . . . . . . . . . 34
11.12 Fiduciary Capacity. . . . . . . . . . . . . . . . . . . 35
11.13 Fiduciary Responsibility. . . . . . . . . . . . . . . . 35
11.14 Claim Procedure.. . . . . . . . . . . . . . . . . . . . 35
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund(s). . . . . . . . . . . . . . . . . . . . . . 37
12.2 Trustee(s).. . . . . . . . . . . . . . . . . . . . . . . 37
12.3 Investment Manager.. . . . . . . . . . . . . . . . . . . 37
12.4 Recordkeeper.. . . . . . . . . . . . . . . . . . . . . . 37
12.5 Purchase and Holding of Securities.. . . . . . . . . . . 37
12.6 Voting of Trust Fund Securities. . . . . . . . . . . . . 38
12.7 Disbursement of Funds. . . . . . . . . . . . . . . . . . 39
12.8 Exclusive Benefit of Members.. . . . . . . . . . . . . . 39
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend.. . . . . . . . . . . . . . . . . . . . . 39
13.2 Suspension or Termination. . . . . . . . . . . . . . . . 40
13.3 Merger, Consolidation or Transfer. . . . . . . . . . . . 40
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration.. . . . . . . . . . . . . . . . . 40
14.2 Payment Due an Incompetent.. . . . . . . . . . . . . . . 41
14.3 Source of Payments.. . . . . . . . . . . . . . . . . . . 41
14.4 Plan Not a Contract of Employment. . . . . . . . . . . . 41
14.5 Applicable Law.. . . . . . . . . . . . . . . . . . . . . 41
14.6 Unclaimed Amounts. . . . . . . . . . . . . . . . . . . . 41
ARTICLE XV
Top Heavy Provisions
15.1 Application. . . . . . . . . . . . . . . . . . . . . . . 42
15.2 Special Top Heavy Definitions. . . . . . . . . . . . . . 42
15.3 Special Top Heavy Provisions.. . . . . . . . . . . . . . 50
15.4 Effect of Change in Applicable Legislation or Regula-
tion. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
<PAGE>
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by the
context, the following words and phrases shall have the meanings
indicated. Some of the words and phrases used in the Plan are
not defined in this Article I, but, for convenience are defined
as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions
Account, Compensation Deferral Contributions Account, Rollover
Contribution Account, and Employer Matching Contributions Account
or Prior Plan Account as the context requires.
1.2 "Affiliate" means any company which is related to an
Employer as a member of a controlled group of corporations in
accordance with Section 414(b) of the Code, as a trade or busi-
ness under common control in accordance with Section 414(c) of
the Code or members of an affiliated service group as defined
under Section 414(m) of the Code.
1.3 "Appropriate Notice" means the written form, electron-
ic procedure or other method prescribed by the Committee to
convey information for a particular purpose.
1.4 "Beneficiary" means the person or persons designated by
the Plan or by a Member under Section 2.5 (Beneficiary Designa-
tion) to receive benefits payable under the Plan as a result of
the Member's death.
1.5 "Board" or "Board of Directors" means the Board of
Directors of the Employer.
1.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time and references to sections thereof
shall be deemed to include any such sections as amended, modified
or renumbered.
1.7 "Committee" means the Benefits Administration Committee
appointed in accordance with Section 11.3 (Appointment of Commit-
tee).
1.8 "Company" means the corporation that owns 100% of the
capital stock of the Employer or any person, firm, corporation or
partnership which may succeed to its business.
1.9 "Compensation" in a Plan Year means the sum of the
amount reported by the Employer to the Internal Revenue Service
on Form W-2 as the Member's compensation for the calendar year
and elective contributions made by the Employer on behalf of an
Employee that are made to a cafeteria plan or Compensation
Deferral Contributions not currently includible in gross income
under Code Sections 125 or 402(a)8, but excluding termination or
severance pay, prizes, awards, grievance settlements, overseas
cost of living allowances, relocation allowances, mortgage
assistance, executive perquisites, stock options, and such other
extraordinary items or remuneration as the Committee shall
determine from time to time pursuant to such uniform and nondis-
criminatory rules as it shall adopt. On or after January 1, 1989
the Compensation of each Employee taken into account under the
Plan for any Plan Year shall not exceed $200,000 as thereafter
adjusted for inflation in accordance with Section 415(d) of the
Code. For Plan Years beginning after 1993 the Compensation of
each Employee taken into account under the Plan for any such Plan
Year shall not exceed $150,000 as thereafter adjusted for infla-
tion in accordance with Section 401(a)(17)(B) of the Code.
1.10 "Compensation Deferral Contributions" means contri-
butions made by an Employer pursuant to an election by the Member
to reduce the cash compensation otherwise currently payable to
such Member by an equivalent amount, in accordance with the
provisions of Section 3.1 (Compensation Deferral Contributions).
1.11 "Compensation Deferral Contributions Account" means
the separate account maintained for a Member to record such
Member's share of the Trust Fund attributable to Compensation
Deferral Contributions made on such Member's behalf.
1.12 "Effective Date" means January 31, 1991 the effective
date of the Prior Plan.
1.13 "Eligible Employee" means an employee who has worked,
at least 500 Hours of Service during a consecutive six-month
period, excluding an individual who is covered by a collective
bargaining agreement between an Employer and any union unless
participation by such employee in the Plan has been agreed to by
the parties to such agreement.
1.14 "Employee" means a person (but not including a person
acting only as a director) who is employed by the Employer.
Leased Employees shall also be treated as Employees for purposes
of this Plan unless: (i) such Leased Employees are covered by a
Plan described in Code Section 414(n)(5) and (ii) such Leased
Employees constitute less than Twenty Percent (20%) of the
Employer's non-highly compensated workforce as defined in Code
Section 414(n)(5)(c).
1.15 "Employee Contributions" means after tax contributions
that were made by a Member to a Prior Plan prior to January 1,
1990.
1.16 "Employee Contributions Account" means the separate
account maintained for a Member to record such Member's share of
the Trust Fund attributable to the Member's Employee Contribu-
tions subaccounts.
1.17 "Employer" means USI American Holdings, Inc.
1.18 "Employer Matching Contributions" means the Employer
contributions made to the Trust Fund pursuant to Article IV
(Employer Contributions).
1.19 "Employer Matching Contributions Account" means the
separate Account maintained for a Member to record such Member's
share of the Trust Fund attributable to Employer Contributions
made on such Member's behalf.
1.20 "Employer Securities" means the Common Stock of
U.S. Industries, Inc., a Delaware Corporation.
1.21 "Enrollment Date" means the first day of each month in
the Plan Year.
1.22 "Enrollment Period" means the period commencing on an
Enrollment Date and ending on the next following Enrollment Date.
1.23 "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
1.24 "Hour of Service" means each hour for which an Employ-
ee is paid, or entitled to payment, or receives earned income
from an Employer or an Affiliate:
(a) for performance of duties;
b) on account of a period of time during which no
duties were performed, provided that except in the case of a
Leave of Absence, no more than 501 Hours of Service shall be
credited for any single continuous period during which an
Employee performs no duty, and provided that no Hours of
Service shall be credited for periods of time in respect of
which an Employee receives severance pay or for payments
made or due under a plan maintained solely for the purpose
of complying with applicable workers' compensation, unem-
ployment compensation or disability insurance laws, or for
reimbursement of medical expenses; and
(c) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Employer; provided
that Hours of Service credited under (a) or (b) shall not be
credit under (c).
Hours of Service credited to an Employee for the performance
of duties will be credited to the computation period in which the
duties are performed. The determination of Hours of Service for
reasons other than the performance of duties shall be made in
accordance with the provisions of Labor Department Regulations
Section 2530.200b-2(b), and Hours of Service shall be credited to
the computation periods to which the award or agreement pertains.
Except in the case of a Leave of Absence, not more than 501 Hours
of Service shall be credited for any continuous period during
which an Employee performs no duty or, in the case of service
required to be credited for payments of back pay awarded or
agreed to, for a period during which an employee did not or would
not have performed duties.
To the extent not credited above, during a Leave of Absence
an Employee shall be credited with a number of Hours of Service
for each week of such Leave of Absence equal to the Employee's
weekly average number of Hours of Service scheduled for the six-week
period immediately preceding such Leave of Absence.
In any case in which an individual becomes an Employee upon
the acquisition of all or a portion of the business of his or her
former employer by the Employer or an Affiliate, whether by
merger, acquisition of assets or stock, or otherwise, his or her
service with his or her predecessor employer shall be included in
determining his or her Hours of Service if, and to the extent
that, such service is required to be credited hereunder (A) by
section 414(a) of the Code and any regulations promulgated
thereunder, (B) by the terms of the agreement pursuant to which
the business of such former employer was acquired by the Employer
or an Affiliate, or (C) by vote of the Board of Directors.
1.25 "Initial Enrollment Date" means the earliest date
following the Effective Date set by the Committee for Eligible
Employees to apply to become Members of the Plan.
1.26 "Investment Fund" means the Balanced Fund, the Emerg-
ing Growth Fund, the Company Stock Fund, the Fixed Income Fund,
the Individually Directed Fund or The International Equity Fund
as described in Section 8.1 (Investment of Accounts Other Than
Employer Matching Contributions Accounts).
1.27 "Investment Manager" means the individual and/or other
entity appointed in accordance with Section 12.3 (Investment
Manager) who has acknowledged in writing that such individual is
a fiduciary with respect to the Plan and who is:
(a) registered as an investment adviser under the
Investment Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage,
assign or dispose of assets of pension plans.
1.28 "Leased Employee" shall mean any person who pursuant
to an agreement between the Employer and any other person has
performed services for the Employer or any related person as
defined in Code Section 414(n)(6) under the primary direction and
control of the Employer or such related person on a substantially
full time basis for a period of at least one year.
1.29 "Leave of Absence" means an absence or interruption of
service approved by the Committee under uniform and nondiscrim-inatory
rules and procedures. Members on leave of absence for
service in the Armed Forces of the United States, however, shall
be deemed to have been on a Leave of Absence, provided they
return to service with an Employer within the required time
limitations set forth in the then applicable laws governing
reemployment rights of persons inducted, or who have enlisted, in
the Armed Forces.
1.30 "Member" means an Eligible Employee who has become a
member of the Plan in accordance with Article II (Eligibility and
Membership). Each Member shall continue to be such until the
later of the date such Member ceases to be an Eligible Employee
or such Member's Accounts have been completely distributed.
1.31 "Parental Leave" means a period not in excess of two
(2) years commencing after December 31, 1984 during which an
individual is absent from work for any period:
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the
individual,
(c) by reason of the placement of a child with
the individual in connection with the adoption of such
child by such individual, or
(d) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless the
Employee furnishes the Plan Administrator such timely information
as may reasonably be required to establish that the absence from
work was for one of the reasons specified in this Section 1.32
and the number of days for which there was such an absence.
Nothing contained herein shall be construed to establish an
Employer policy of treating a Parental Leave as a Leave of
Absence.
1.32 "Plan" means the USI Corporate Office Retirement
Savings & Investment Plan as set forth herein or as amended from
time to time.
1.33 "Plan Year" means the calendar year.
1.34 "Prior Plan" means the Hanson Industries Retirement
Savings & Investment Plan and any employee benefit plan qualified
under Section 401(a) of the Code the assets of which are trans-
ferred to the Plan or merged into the Plan in a transaction which
meets the requirements of Regulation 1.414(1) of the Code and in
which the Plan is the Survivor Plan.
1.35 "Prior Plan Account" means the separate account main-
tained for a Member to record such Member's share of the Trust
Fund attributable to employer contributions to the plans de-
scribed herein as Prior Plans.
1.36 "Required Beginning Date" means April 1 of the year
following the Plan Year in which occurs the later of the date
that the Member terminates employment or the date on which the
Member attains the age of 70-1/2 years.
1.37 "Retirement" means a Member's normal, early or de-
ferred retirement whichever shall apply to the Member under the
provisions of an Employer's pension plan applicable to such
Member, or the termination of employment of a Member on or after
such Member's attainment of age 65.
1.38 "Rollover Contribution" means an amount which is
transferred from another plan to this Plan, in accordance with
the provisions of Section 2.7 (Rollover Contributions From Other
Plans).
1.39 "Rollover Contribution Account" means the separate
Account maintained for a Member to record such Member's share of
the Trust Fund attributable to any Rollover Contributions made to
the Plan on his behalf.
1.40 "Service" means the period of employment beginning on
the first day the Eligible Employee performs duties for an
Employer or an Affiliate and ending on the day of quit, retire-
ment, discharge or death, two years after the commencement of
absence on account of Parental Leave, or one year after an
absence for any other reason. All prior periods of employment
with an Employer or an Affiliate, and breaks in employment of
less than one year shall be included in Service. If a break in
employment of not more than two years is on account of Parental
Leave no more than one year of Service shall be credited to an
Eligible Employee for a period of Parental Leave.
1.41 "Suspense Account" means the separate account main-
tained for a Member who had monies credited to such account
pursuant to Section 4.3 (Limitation on Annual Additions), re-
flecting the current dollar value of such credit.
1.42 "Total and Permanent Disability" means permanent
incapacity which results in a Member being unable to engage in
regular employment or occupation by reason of any medically
demonstrable physical or mental condition acceptable to the
Committee on a nondiscriminatory basis and which would entitle
the Member to benefits under an Employer's long-term disability
plan, if any, or to Social Security benefits as evidenced by a
disability award letter. However, no Member shall be deemed to
be disabled if such incapacity (a) resulted from or consists of
habitual drunkenness or addiction to narcotics, or (b) was
incurred, suffered or occurred while the Member was engaged in,
or resulted from having engaged in, a criminal enterprise, or (c)
was intentionally self-inflicted.
1.43 "Trustee" means the individual or corporate trustees
appointed from time to time by the Company to administer the
Trust Fund(s) in accordance with Section 12.2 (Trustee(s)).
1.44 "Trust Fund" means the trust fund or trust funds
established in accordance with Section 12.1 (Trust Fund(s)) from
which benefits provided under this Plan will be paid.
1.45 "Valuation Date" means the last business day of each
calendar month on which the New York Stock Exchange is open for
trading.
ARTICLE II
Eligibility and Membership
2.1 Members on the Effective Date. Each person who was a
member of a Prior Plan shall become a member of the Plan on the
Effective Date of the transaction referred to in Section 1.34.
2.2 Eligible Employees on and after the Effective Date. On
and after the Effective Date an Eligible Employee may elect to
become a Member on the Initial Enrollment Date or any Enrollment
Date thereafter. Notwithstanding the foregoing, a former employ-
ee who is reemployed as an Eligible Employee following a termina-
tion of employment and who, prior to termination, satisfied the
conditions for membership in the Plan, shall be eligible to
become a Member of the Plan immediately upon reemployment subject
to such advance notice procedures as the Committee may prescribe.
2.3 Completion of Appropriate Notice. In order to become a
Member on any Enrollment Date, an Eligible Employee must give the
Appropriate Notice to the Committee at least 30 days (or such
other period as the Committee may prescribe) prior to that
Enrollment Date.
2.4 Elections Upon Becoming A Member. An Eligible Employ-
ee, in giving the Appropriate Notice specified in Section 2.3,
shall (a) authorize the Employer to reduce current compensation
for Compensation Deferral Contributions pursuant to Section 3.1
(Compensation Deferral Contributions ), (b) make an investment
election from among those options enumerated in Section 8.1
(Investment of Accounts other Than Employer Matching Contribu-
tions Accounts), and (c) designate a Beneficiary in accordance
with Section 2.5 (Beneficiary Designation). Any such payroll
authorization, investment election or Beneficiary designation
shall remain in effect until changed by giving the Appropriate
Notice to the Committee subject to the provisions of the Plan.
2.5 Beneficiary Designation. Each Member shall designate a
Beneficiary by giving the Appropriate Notice to the Committee.
The designated Beneficiary may be an individual, estate or trust;
however, if the Member is married at the time of such Member's
death, such Member's surviving spouse shall automatically be such
Member's sole Beneficiary unless the spouse has consented in
writing in accordance with Section 10.9 (Spousal Consent) to a
designation of a different Beneficiary. If more than one indi-
vidual or trust is named, the Member shall indicate the shares
and/or precedence of each individual or trust so named. Any
Beneficiary so designated may be changed by the Member at any
time (subject to his spouse's consent, if applicable) by giving
the Appropriate Notice to the Committee.
In the event that no Beneficiary has been designated or that
no designated Beneficiary survives the Member, the following
Beneficiaries (if then living) shall be deemed to have been
designated in the following priority: (a) spouse, (b) children,
including adopted children, in equal shares, (c) parents, in
equal shares, or the Member's surviving parent, if only one
parent survives, and (d) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a Member
ceases to meet the definition of Eligible Employee as set forth
in Section 1.13 (Eligible Employee) but continues to be an
Employee or an employee of an Affiliate, such Member's right to
make or have contributions made on such Member's behalf to the
Plan shall be suspended. If during the period of suspension, a
Member's employment with an Employer or an Affiliate terminates
for any reason, there shall be a distribution of such Member's
Accounts in accordance with the provisions of Article X (Distri-
bution).
If and when the suspended Member again becomes an Eligible
Employee, such Member may resume having Compensation Deferral
Contributions made on such Member's behalf as of any payroll date
thereafter by giving the Appropriate Notice notice to the Commit-
tee not less than 30 days (or such other period as the Committee
may prescribe) prior to such payroll date.
2.7 Rollover Contributions From Other Plans. An Eligible
Employee or an individual who meets the definition of Eligible
Employee in Section 1.13 except for the age or service require-
ments, who is in receipt of a distribution of cash or Employer
Securities which is eligible to be "rolled over" to a qualified
plan in accordance with applicable Code sections may, in accor-
dance with and subject to such rules and procedures approved by
the Committee, transfer all or part of such distribution into the
Plan; provided, that the transfer is in conformity with require-
ments set forth in the Code.
Upon approval by the Committee, the amount transferred to
the Plan shall be deposited in the Trust Fund in cash or in
Employer Securities and shall be credited to a Rollover Contribu-
tion Account.
If a Rollover Contribution is made on behalf of an individu-
al who has not yet become a Member, such individual shall be
deemed a Member upon the establishment of the Rollover Contribu-
tion Account; however, participation in the Plan shall be limited
to the Rollover Contribution Account until the other requirements
for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member who
is an Eligible Employee may elect to have the Employer make
Compensation Deferral Contributions not to exceed $9,500 per year
(subject to adjustment for inflation in accordance with Section
415(d) of the Code) to the Plan on such Member's behalf to be
credited to such Member's Compensation Deferral Contributions
Account, in which case the cash compensation otherwise payable by
the Employer to the Member shall be reduced by an amount equal to
the Compensation Deferral Contributions so made. Subject to the
limitations prescribed in Article IV, the amount of Compensation
Deferral Contributions in any payroll period shall be in whole
percentages from 1% to 17% of the Member's Compensation as the
Member shall designate (or such greater or lesser percentages as
the Committee may from time to time prescribe for the Plan).
The foregoing notwithstanding during the 'make up period,'
as defined below, a former Member (a 'Veteran') who is reemployed
after a period of military service may elect to have the Employer
make additional Compensation Deferral Contributions to the Plan
on such Veteran's behalf, the total of which may not exceed the
maximum Compensation Deferral Contributions that the Veteran
could have elected to have made if no military leave had oc-
curred. For the purposes of calculating the amount of such
additional Compensation Deferral Contributions the Veteran's
Compensation during such leave of absence shall be deemed to have
been the Veteran's annual rate of compensation at the time the
military leave of absence commenced (the 'Deemed Compensation
Rate') and the 'make up period' during which such additional
Compensation Deferral Contributions may be elected shall be equal
to the lesser of five years or three times the period of the
military leave of absence. Such additional Compensation Deferral
Contributions in any payroll period shall be in whole percentages
of the Veteran's current payroll and shall not exceed the maximum
amount that could have been deferred at the Deemed Compensation
Rate. In the event that the additional Compensation Deferral
Contributions to the Plan on a Veteran's behalf that are autho-
rized by this paragraph exceed the limitations set forth in
Article IV of the Plan or otherwise conflict with provisions of
the Code or ERISA, such limitations or conflicts shall be ignored
to the extent permitted by Code Section 414(u).
3.2 Changes and Suspension of Contributions. Compensation
Deferral Contributions made on a Member's behalf may be increased
or decreased or suspended and suspended Compensation Deferral
Contributions may be renewed effective on the first Enrollment
Date following the month in which the Appropriate Notice is given
to the Committee not later than the close of business on the
tenth day of the month.
3.3 Transfer of Contributions to Trustee. Contributions
made under this Article III will be transferred to the Trustee by
the 15th day of the month following the month in which the
contributions are withheld from the Member's Compensation and/or
in which the Member's cash compensation is reduced; provided that
all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 30 days after the end
of the Plan Year.
ARTICLE IV
Limitations on, and Distribution of, Excess Compensation
Deferral Contributions and Excess Employer Matching Contri-
butions of Highly Compensated Employees
4.1 Limitations. The Committee in its sole discretion shall
separately limit the amount of Compensation Deferral Contribu-
tions and Employer Matching Contributions made on behalf of each
"Highly Compensated Employee" (as defined below) for each Plan
Year to insure that neither the Deferral Percentage nor the
Contributions Percentage (each as defined below and referred to
herein as the "Percentage") exceed the greater of (X) 125 percent
of the Percentage in the preceding Plan Year of all other eligi-
ble employees or, alternatively, (Y) the Percentage in the
preceding Plan Year of all other eligible employees plus 2
percentage points and the actual Percentage for the Highly
Compensated Employees is not more than two times the actual
Percentage in the preceding Plan Year of all other eligible
employees.
Additionally, Employer Matching Contributions shall not in
any event discriminate in favor of Highly Compensated Employees.
For purposes of this Section, the term "Deferral Percentage"
with respect to any Plan Year means the Compensation Deferral
Contributions for the Plan Year divided by Compensation.
For purposes of this Section, the term "Contributions
Percentage" with respect to any Plan Year means the Employer
Matching Contributions for the Plan Year divided by Compensation.
For the purposes of this Section, the term "Highly Compen-
sated Employee" with respect to any Plan Year means an Eligible
Employee or former Eligible Employee who performed services
during the Plan Year for which the determination is being made
and:
(a) at any time during such Plan Year or preceding Plan
Year was a 5-percent owner of the Employer (as defined for
top-heavy plans under Code Sec. 416(1); or
(b) earned $80,000 or more in the preceding Plan Year
(subject to adjustment for inflation in accordance with
Section 415(d) of the Code) in annual Compensation from the
Employer.
(1) For the purposes of this Section, the term "Compensation"
means Compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax sheltered annu-
ity.
(2) For the purpose of this Section the term "Employer" shall
also include all other entities aggregated with the Employer
under the requirements of Code Section 414(b), (c), (m) and (o).
For purposes of this Section, the Employer is permitted to
determine whether Members are in the category of Highly Compen-
sated Employees or other Eligible Employees based on the Member's
Compensation for the immediately preceding Plan Year or on
estimated Compensation for the Current Plan Year in accordance
with uniform and nondiscriminatory rules whenever information
regarding actual Compensation for the Plan Year is not reasonably
available at the time the amount of a contribution hereunder is
determined or limited.
For purposes of this Section the definition of "Compensation
Deferral Contributions" and "Employer Matching Contributions"
shall include Compensation Deferral Contributions and Employer
Matching Contributions made under any other plan that is aggre-
gated with this Plan for purposes of Sections 401(a)(4) or 410(b)
(other than Section 410(b)(2)(A)(ii)) of the Code and if any such
plan is permissively aggregated with this Plan for the purposes
of Section 401(k) of the Code, the plans so aggregated must also
satisfy Section 401(a)(4) and 410(b) as if they were a single
plan. Further, for the purposes of this Section, Compensation
Deferral Contributions made on behalf of each Highly Compensated
Employee shall be determined by treating all cash or deferred
arrangements under which each such Highly Compensated Employee is
eligible as a single arrangement.
4.2 Control of Contributions and Distribution of Excess.
(a) Rules For Compensation Deferral Contributions.The
Committee may, in accordance with uniform and nondiscriminatory
rules it establishes from time to time, require that Members who
are among the Highly Compensated Employees for the Plan Year make
Compensation Deferral elections following and/or preceding the
completion of such elections by all other Eligible Employees and
the Committee may (X) limit the amount by which each Member who
is among the Highly Compensated Employees may elect to reduce his
or her Compensation, and (Y) subject to Section 402(g) of the
Code permit each other Eligible Employee to elect to reduce his
or her Compensation within higher limits than those for Highly
Compensated Employees.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Compensation Deferral
Contributions to be made with respect to such Enrollment Period
or Employer Matching Contributions in respect thereof would cause
the limitation contained in this Section to be exceeded for the
Plan Year in which such Enrollment Period occurs, the amount of
Compensation Deferral Contributions allowed to be made on behalf
of Highly Compensated Employees for such Enrollment Period shall
be reduced. The Highly Compensated Employees to whom the reduc-
tion is applicable, and the amount of the excess Compensation
Deferral Contributions, shall be determined by reducing the
actual Deferral Contributions of the Highly Compensated Employee
or Employees with the highest actual Deferral Contributions to
the extent required to--
(i) enable the arrangement to satisfy the limita-
tion set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or
Employees' actual Deferral Compensation to equal the
Deferral Compensation of the Highly Compensated Employ-
ee or Employees with the next highest actual Deferral
Compensation.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
If the Committee determines that the limitations contained
in this Section have not been met for any Plan Year, the Commit-
tee may return the excess Compensation Deferral Contributions of
Members who are Highly Compensated Employees (calculated in the
manner set forth above) to such Members within the 12-month
period beginning after the last day of the Plan Year for which
such contributions were made. The amount of such excess Compen-
sation Deferral Contributions shall be adjusted to reflect any
income or loss allocable to such excess during the Plan Year
determined in accordance with the alternative method set forth in
Reg. Section 1.401(k)-1(f)(4)(ii)(c) and also from the end of the
Plan Year to the date of distribution determined in accordance
with the safe harbor method set forth in Reg. Section 1.401(k)-1(f)(4)(2)(d).
(b) Rules for Company Matching Contributions.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Company Matching Contribu-
tions to be made with respect to such Enrollment Period would
cause the limitation contained in this Section to be exceeded for
the Plan Year in which such Enrollment Period occurs, the amount
of Company Matching Contributions allowed to be made on behalf of
Highly Compensated Employees for such Enrollment Period shall be
reduced. The Highly Compensated Employees to whom the reduction
is applicable, and the amount of the excess shall be determined
by reducing the Company Matching Contributions of the Highly
Compensated Employee or Employees with the highest actual Match-
ing Contributions to the extent required to--
(i) enable the arrangement to satisfy the limitation
set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or Emplo-
yees' actual Matching Contributions to equal the Match-
ing Contributions of the Highly Compensated Employee or
Employees with the next highest actual Matching Contri-
butions.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
Excess Aggregate Contributions plus any income and minus any
losses allocable thereto, shall be forfeited, if not vested, or
if not forfeitable, distributed, no later than the last day of
each Plan Year to those Participants to whose Individual Accounts
such Excess Aggregate Contributions were allocated for the
preceding Plan Year. Company Matching Contributions which are
forfeited shall be credited against Company Matching Contribu-
tions required to be made to Participant's accounts in the Plan
Year following the Plan Year that the excess Company Matching
contributions were allocated to Participant's accounts provided,
however, any excess which has not been so credited within two and
one half months after the end of the Plan Year shall be immedi-
ately refunded to the Employer.
(c) Multiple Use Limitations. If the actual Deferral
Percentage, the actual Contribution Percentage, and the sum of
the two percentages for the group of Highly Compensated Employees
in the Plan exceed the limits set forth in Regs.1.401(m)-2(b)
then in such case the required reduction of multiple use of the
alternate limitation shall be accomplished through reduction of
the actual Deferral Percentage for all Highly Compensated Employ-
ees eligible to participate in the Plan in accordance with the
procedures prescribed in Regs. 1.401(m)-2(b) which are incorpo-
rated herein by reference.
4.3 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the con-
trary, in no event shall the Annual Additions (as here-
inafter defined) with respect to any Member in any Plan
Year exceed the Maximum Annual Addition. A Member's
"Maximum Annual Additions" means the lesser of (i) 25%
of the Member's compensation reported on Form W-2
(after December 31, 1997, compensation for the purposes
of Annual Additions shall also include elective or
salary reduction contributions to a cafeteria plan,
cash or deferred compensation arrangement or tax shel-
tered annuity) or (ii) the dollar limit in effect for
such Plan Year in accordance with Section 415(c)(1)(A)
of the Code ($30,000 as hereafter adjusted for infla-
tion in accordance with Section 415(d) of the Code),
(b) For purposes of this Section 4.3 the term
"Annual Additions" means the sum for any Plan Year of
(i) Compensation Deferral Contributions
made in accordance with Section 3.1 (Compen-
sation Deferral Contributions),
(ii) Employer Matching Contributions
including forfeitures as applied in accor-
dance with Section 5.1 (Amount of Employer
Matching Contributions) and Section 5.2
(Treatment of Forfeitures).
(iii) The amount of annual additions (within
the meaning of Section 415(c)(2) of the Code)
under all other qualified defined contribution
plans of the Employer or an Affiliate.
(c) If the Member's Annual Additions exceed the
Maximum Annual Additions limitations in accordance with
this Section 4.3, such amounts shall not be contributed
to the Trust or, if contributed by or on behalf of a
Member under the Plan shall be reduced in the following
order, but only to the extent necessary to meet the
limitations: (i) Compensation Deferral Contributions
and (ii) Employer Matching Contributions in respect of
such reduced Compensation Deferral Contributions.
(d) Combined Fraction.
(i) Notwithstanding the foregoing, for any Plan
Year beginning before January 1, 2000, if a Member is a
participant in any qualified defined benefit plan main-
tained by an Employer or an Affiliate, the sum of the
"Defined Benefit Plan Fraction" (as defined below) and
the "Defined Contribution Plan Fraction" (as defined
below) for such Member shall not exceed 1.0 (called
"Combined Fraction"). If for any Plan Year the Com-
bined Fraction of a Member exceeds 1.0 after applica-
tion of provisions for limitation of benefits under all
such qualified defined benefit plans, the Maximum
Annual Additions of such Member shall be reduced as
provided in Section 4.3(c) to the extent necessary to
reduce the Combined Fraction of such Member to 1.0.
(ii) The "Defined Benefit Plan Fraction" applica-
ble to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all of the qualified de-
fined benefit Plans maintained by the Employer or an
Affiliate, (whether or not terminated) in which such
Member participates (determined as of the close of the
Plan Year) and the denominator of which is the lesser
of (A) the product of 1.25 multiplied by the maximum
dollar limitation on a Member's Projected Annual Bene-
fit if the plan provided the maximum benefit allowable
under Section 415(b) of the Code for such Plan Year, or
(B) the product of 1.4 multiplied by 100% of the
Member's Highest Average Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefit plans main-
tained by the Employer which were in existence on July
1, 1982, the denominator of this fraction will not be
less than 1.25 multiplied by the sum of the annual
benefits under such plans which the Member had accrued
as of the later of September 30, 1983, or the last
limitation year beginning before January 1, 1983. The
preceding sentence applies only if defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at
the end of the 1982 limitation year.
(iii) The "Defined Contribution Plan Fraction"
applicable to a Member for any Limitation Year is a
fraction, the numerator of which is the sum of the
Member's Annual Additions as of the close of such Plan
Year for that Plan Year and for all prior Plan Years
under all of the defined contribution plans maintained
by an Employer or an Affiliate in which Member partici-
pates, and the denominator of which is the lesser of
the following amounts (determined for such Plan Year
and for each prior Plan Year of service with the Em-
ployer or any Affiliate regardless of whether a plan
was in existence during those years): (A) the product
of 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for the Plan Year
(determined without regard to the special dollar limi-
tation for employee stock ownership plans), or (B) the
product of 1.4 multiplied by twenty-five percent of the
Member's Compensation for the Plan Year.
(e) Definitions.
(i) "Highest Average Compensation" means the
average of a Member's high three consecutive Plan Years
(determined as of the close of the Plan Year) of em-
ployment with the Employer or the actual number of
years of employment for those Members who are employed
for less than three consecutive years with the Employ-
er.
(ii) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contribu-
tions under a defined benefit plan, adjusted, in the
case of any benefit payable in a form other than a
single life annuity or a qualified joint and survivor
annuity, to the actuarial equivalent of a single life
annuity, assuming (A) the Member continues employment
until reaching the plan's normal retirement age (or the
Member's current age, if later), (B) compensation
remains unchanged and (C) all other relevant factors
used to determine benefits under the plan remain con-
stant in the future.
(f) In the event that, notwithstanding the foregoing
provisions of this Section 4.3, the limitations with respect
to Annual Additions prescribed hereunder are exceeded with
respect to any Member and such excess arises as a conse-
quence of reasonable error in estimating a Member's compen-
sation or such other circumstances as the Secretary of
Treasury shall permit, the Employer Matching Contributions
portion of such excess shall be held in a Suspense Account
and, if such Member remains a Member, shall be used to
reduce Employer Matching Contributions for such Member for
the succeeding Plan Years, and, if such Member ceases par-
ticipating in the Plan, shall be used to reduce Employer
Matching Contributions for all Members in the Plan Year of
cessation and succeeding Plan Years, as necessary. Compen-
sation Deferral Contributions which have been made to the
Trust and are reduced under Section 4.3(c) shall be refunded
to the Member as soon as administratively convenient. Any
Employer Matching Contributions including Forfeitures re-
maining upon Plan Termination which cannot be allocated to
Members in accordance with the foregoing in the Plan Year of
termination of the Plan shall be returned to the Employer.
(g) For purposes of this Section 4.3, the standard of
control for determining if a company is an Affiliate under
Section 414(b) and 414(c) of the Internal Revenue Code shall
be deemed to be "more than 50%" rather than "at least 80%.
ARTICLE V
Employer Matching Contributions
5.1 Amount of Employer Matching Contributions. An Employer
shall make contributions to the Plan, with respect to each
payroll period on behalf of each Member who is an Eligible
Employee, equal to 50% (or such greater percentage, not exceeding
100%, as the Board of Directors may from time to time authorize)
of that portion of the Member's Compensation Deferral Contribu-
tions which do not exceed 6% (or such other percentage as the
Board may from time to time permit) of Compensation in such
payroll period. The Board of Directors may, in its discretion,
discontinue Employer Matching Contributions with respect to
Members' Compensation Deferral Contributions (which are Basic
Contributions) for Compensation not yet earned on the date such
Employer Matching Contributions are discontinued.
5.2 Treatment of Forfeitures. Any amounts forfeited in
accordance with Sections 7.4 (Forfeitures) and 14.6 (Unclaimed
Amounts) shall be applied as a credit towards the amount of
Employer Matching Contributions otherwise required under Section
5.1. However, if pursuant to Section 5.1, Employer Matching
Contributions are discontinued, for Plan Years following the Plan
Year in which such discontinuance occurs, any such forfeited
amounts in excess of the amounts required to restore forfeited
amounts to the Employer Matching Contributions Accounts of
Members who are reemployed in accordance with Section 7.4 shall
be allocated as of the last day of the Plan Year to the Member's
Employer Matching Contributions Accounts in an amount equal to
the amount of such forfeited amounts available for allocation
multiplied by a fraction the numerator of which is the Member's
Compensation Deferral Contributions for the Plan Year not in
excess of six percent of such Member's Compensation and the
denominator of which is the aggregate of all Members' Compensa-
tion Deferral Contributions not in excess of six percent of all
such Members' Compensation.
5.3 Transfer of Contributions to Trustee. Employer Match-
ing Contributions under this Article V with respect to each
payroll period shall be paid to the Trustee as soon as practica-
ble after the close of the month in which such payroll period
ends (but in no event later than 15 days after the last day of
such month) and such Employer Matching Contributions (inclusive
of the credit for forfeitures as provided in Section 5.2) shall
be credited as of the last day of such month to each Member's
Employer Matching Contributions Account.
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. For each Member the Committee
shall, where applicable, cause a separate Compensation Deferral
Contributions Account, an Employer Matching Contributions Ac-
count, a Rollover Contribution Account and a Prior Plan Account
to be maintained. For Employee contributions made to a Prior
Plan which were not Compensation Deferral Contributions the
Committee shall continue to maintain a separate Employee Contri-
butions Account.
6.2 Valuations. As of each Valuation Date, the Committee
shall adjust the Employee Contributions Account, the Compensation
Deferral Contributions Account, the Employer Matching Contribu-
tions Account, the Rollover Contribution Account and Prior Plan
Account, as applicable, for each Member to reflect his share of
contributions (including for this purpose contributions made
after such Valuation Date but credited as of such Valuation
Date), amounts of interest paid or accrued in respect of a loan
made to such Member pursuant to Section 9.5, withdrawals, distri-
butions, forfeitures, income, expenses payable from the Trust
Fund and any increase or decrease in the value of Trust Fund
assets since the preceding Valuation Date. Each separate account
maintained for each loan made to a Member pursuant to Section 9.5
shall be valued as of each Valuation Date by adjusting the
balance of the loan for the payments of principal thereunder.
All determinations made with respect to the valuation of accounts
shall be made in dollars in accordance with generally accepted
principles of trust accounting and action by the Committee in
reliance thereon shall be conclusive and binding upon all persons
having an interest under the Plan.
If a Suspense Account created in accordance with Section
5.3(f) is in existence on a Valuation Date, such account shall
not participate in the Trust's investment gains or losses.
ARTICLE VII
Vesting of Accounts
7.1 Employer Matching Contributions Account. A Member's
interest in the Member's Employer Matching Contributions Account
shall become 100% vested after completion of at least five years
of service provided, however, that (a) Employer Matching Contri-
butions to accounts of Highly Compensated Employees shall not be
deemed to vest until the Deferral Percentage and Contributions
Percentage limitations set forth in Article IV have been satis-
fied and (b) nothing herein shall delay vesting pursuant to the
provisions of a Prior Plan.
7.2 Other Accounts. Interests in Compensation Deferral
Contributions Accounts, Prior Plan Accounts, Rollover Contribu-
tion Accounts and Employee Contributions Accounts shall be fully
vested at all times.
7.3 Earlier Vesting in Employer Matching Contributions
Accounts. Notwithstanding the foregoing, a Member's interest in
his or her Employer Matching Contributions Account shall be fully
vested (a) on the date of termination of employment by reason of
death, Retirement or Total and Permanent Disability, (b) when and
if this Plan shall at any time be terminated for any reason, (c)
upon the complete discontinuance of contributions by the Employer
hereunder, or (d) upon partial termination of this Plan if such
Member is a member affected by such partial termination.
7.4 Forfeitures. A Member's Employer Matching Contribu-
tions Account which is not vested in accordance with this Article
VII at the time of such Member's termination of employment shall
be forfeited as of the last day of the Valuation Period following
the Valuation Period in which the Member has a termination of
employment. However, if a Member who has a termination of
employment is reemployed before the end of a period of five
consecutive Plan Years beginning with the Plan Year in which the
Member has a termination of employment and during which the
Member is not an Employee on the last day of each Plan Year, any
forfeited amounts shall be restored to the Member's Employer
Matching Contributions Account provided, however, that any
termination distribution from the Employee's Compensation Defer-
ral Contribution Account be first returned to the Plan. For
purposes of the preceding sentence, any Plan Year in which a
Member is absent from work on the last day of the Plan Year by
reason of a Parental Leave shall not be counted as one of the
Plan Years in such a period of five consecutive Plan Years and
the Plan Year immediately preceding the Plan Year immediately
following a Plan Year in which such Member is absent from work on
the last day of the Plan Year by reason of Parental Leave shall
be deemed to be consecutive.
Amounts required to be restored to the Employer Matching
Contributions Accounts of a Member shall be reinstated, to the
extent not contributed by an Employer, out of amounts forfeited
under this Section 7.4 or 14.6 (Unclaimed Amounts) for the Plan
Year and, to the extent such forfeitures are not sufficient,
shall be charged ratably against income of the Trust Fund.
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts Other Than Employer Contribu-
tions Accounts. Upon becoming a Member, the Member shall direct
that Compensation Deferral Contributions and Rollover Contribu-
tions be invested in increments of 5% in a broad range of invest-
ment alternatives which are administratively feasible for the
Plan to hold and the acquisition of which would not result in
disqualification of the Plan under the Code including Employer
Securities through The Company Stock Fund (para. (c)), common
trust funds (which are designated by a fiduciary that is not
affiliated with such funds and are designated herein for the
information and convenience of Members and not to limit their
choices of investment vehicles) such as the Balanced Fund (para.
(a)), The Emerging Growth Fund (para. (b)), or The Fixed Income
Fund (para. (d)), and the numerous other investment alternatives
including any other available look-through investment vehicles
chosen by individual Members under The Individually Directed Fund
(para. (e)), all as more fully described below:
(a) The Balanced Fund, which is invested in a diversi-
fied portfolio of equity and fixed income securities select-
ed with the object of providing long-term capital appreci-
ation and moderate investment risk.
(b) The Emerging Growth Fund, which is primarily
invested in a diversified portfolio of equity securities
(including preferred stock, bonds or debentures convertible
into common stock) of relatively small emerging growth
companies with adequate financial strength and unique com-
petitive marketing advantages.
(c) The Company Stock Fund, which is invested in
Employer Securities. Members will not be permitted to
direct that an investment be made in the Company Stock Fund
unless and until the Member has received a prospectus in
respect of Employer Securities in the Company Stock Fund
which meets the requirements of the Securities Act of 1933
or in the opinion of counsel for the Company such investment
may be otherwise permitted.
(d) The Fixed Income Fund, which is invested primarily
in guaranteed investment contracts, units of bank collective
trust funds and short-term interest bearing instruments
selected to provide security of principal.
(e) The Individually Directed Fund, which will be
invested in any tradeable securities which can be maintained
by the Investment Manager as each Member may direct from
time to time in respect of contributions other than Employer
Matching Contributions.
(f) The International Equity Fund, which typically
consists of long-term investments in stocks of foreign
companies but with no more than 5% invested in any one
company and no more than 20% in any one industry or country.
8.2 Redirection of Future Contributions. A Member's
investment direction under Section 8.1 may be changed at any time
and will be effective for contributions received for the current
month provided that the Appropriate Notice is received by the
Committee before the close of business on the tenth day of the
preceding month. Such change in direction will not be effective
as to amounts previously contributed or invested.
8.3 Reinvestment of Prior Contributions.
(a) Effective on the Enrollment Date following the
month in which the Appropriate Notice is received by the
Committee (not later than 2 P.M. Eastern Time on the last
business day of the month) a Member may direct that up to
the total value in any Investment Fund holding investments
from the Member's Compensation Deferral Contributions Acc-
ount, Prior Plan Account, Rollover Contribution Account or
Employee Contributions Account be transferred from such
Investment Fund to any other Investment Fund in increments
of 5%.
(b) The Committee may, in its sole discretion, impose
at any time or from time to time such restrictions on the
transfers of monies from one Investment Fund to another as
it deems necessary or appropriate.
8.4 Investment of Employer Matching Contributions Accounts.
Employer Matching Contributions shall be invested only in Employ-
er Securities through the Company Stock Fund.
8.5 Statements of Accounts And Confirmation of Investment
Directions.
(a) Statements of Accounts. Each Member shall be
furnished a quarterly statement of accounts. A like
statement shall be furnished to a Member upon any
distribution being made under the Plan.
(b) Confirmations of Investment Directions. All
investment directions given by Members under the Plan
shall be confirmed in writing.
8.6 Correction of Errors. In the event of an error in the
adjustment of a Member's Account, the Committee, in its sole
discretion, may correct such error by either crediting or charg-
ing the adjustment required to make such correction to or against
Forfeitures for the Plan Year or to or against income as an
expense of the Trust for the Plan Year in which the correction is
made, or if an Employer contributes an amount to correct any such
error, from such amount. Except as provided in this Section, the
Accounts of other Members shall not be readjusted on account of
such error.
8.7 Investment of Deferred Distributions. Former Members
of the Plan shall have the same investment options for their
Accounts as are available for the Accounts of current Members of
the Plan.
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options.
(a) Any Member may withdraw all or part of his or her Employee
Contributions Account at any time once in any twelve-month period.
(b) Hardship. In the event of Hardship (as defined in
Section 9.2), a Member may, by giving the Appropriate Notice
to the Committee, elect to withdraw the balance of such
Member's Rollover Contribution Account, if any, and the
cumulative Compensation Deferral Contributions held in the
Member's Compensation Deferral Contributions Account togeth-
er with any income allocable to such contributions as of
December 31, 1988 as of the next succeeding Valuation Date.
(c) Age 59-1/2. After a Member's attainment of age
59-1/2, in any twelve-month period a Member may make one
withdrawal of all or any portion of the value of the
Member's Compensation Deferral Contributions Account the
Member's Rollover Contribution Account and the vested por-
tion of such Member's Employer Contributions Account.
(d) A withdrawal shall be not less than the lesser of
$500 or the combined total in the Member's Accounts that is
eligible for withdrawal.
9.2 Hardship Withdrawals.
(a) Frequency. Hardship withdrawals (including
amounts necessary to pay any federal, state or local taxes
on such withdrawals) may be made once in any twelve-month
period.
(b) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed by the
Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets (in-
cluding those assets of the Member's spouse and minor
children that are reasonably available to the Member)
to the extent such liquidation will not cause immediate
and heavy financial need,
(iii) By ceasing Compensation Deferral Contribu-
tions under the Plan, or
(iv) By other distribution or nontaxable (at the
time of the loan) loans from any plan maintained
by an Employer or any other employer, or by bor-
rowing from commercial sources on reasonable com-
mercial terms.
The Committee shall be entitled to rely on the Member's
statement of need without inquiry into the Member's finan-
cial circumstances.
(c) Determination of Hardship. A withdrawal will be
deemed to be a hardship withdrawal if made on account of:
(i) Medical expenses incurred, or to be incurred,
by the Member, the Member's spouse, or any dependent,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
(iii) Payment of tuition for the next year,
semester or quarter of post-secondary education for the
Member, the Member's spouse or any dependent,
(iv) The need to prevent the eviction of the
Member from the Member's principal residence or fore-
closure on the mortgage of the Member's principal
residence,
(v) Such other immediate and heavy financial need
as the Commissioner of Internal Revenue may from time
to time publish by revenue rulings, notices and other
documents of general applicability, or
(vi) Any other immediate and heavy financial need
as determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the re-
quirements of the Code and the applicable regulations
and in accordance with the following standards and
principles:
(A) the need shall be due to an extra-ordi-
nary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of hard-
ship as commonly understood such as financial
expenses and not for entertainment or pleasure,
and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
9.3 Values. All withdrawals under Section 9.1 shall be
based on the values of Accounts as of the Valuation Date next
following the giving of the Appropriate Notice, or such other
Valuation Date as the Committee shall prescribe. Any withdrawal
from an Account (or Subaccount thereof) under Section 9.1 shall
be charged proportionately against each Investment Fund described
in Article VIII (Investment of Accounts) in which such Account
(or Subaccount thereof) is invested.
9.4 Payment of Withdrawals. Any amount withdrawn under
Section 9.1 shall be paid to a Member in a lump sum in cash, as
soon as practicable after the Valuation Date as of which the
withdrawal election is effective provided, however, that at the
Member's request whole numbers of Employer Securities contained
in the Member's Account may be distributed in kind.
9.5 Loans. A Member who is a "party in interest" as de-
fined in Section 3(14) of ERISA (a "Party in Interest") may
borrow for any purpose from his or her Employee Contributions
Account, Compensation Deferral Contributions Account, Prior Plan
Accounts and Rollover Contribution Account in increments of not
less than $1,000 once in any twelve-month period an amount
(inclusive of current loans) of up to one half of the total of
such accounts, but in any event not more than $50,000 reduced by
the excess (if any) of the highest balance of existing loans
during the preceding 12 months over the current loan.
For the purposes of the foregoing, any outstanding balance
of an existing loan shall be aggregated with any additional funds
being borrowed in order to calculate a Member's borrowing limit.
Transactions for additional funds shall be booked and documented
at then current interest rates as a new loan.
All loans shall be made pursuant to such other procedures
and terms as shall be adopted by the Committee, subject to the
following:
(a) A loan may remain outstanding so long as the
borrower remains a Party in Interest and shall be repayable
within five years from the date of borrowing upon such terms
as may be determined by the Committee; provided, however,
that any loan of more than $15,000 used to acquire the
primary residence of a Member shall be repayable over a
period of up to ten years as determined by the Committee. A
Member may have no more than one primary residence loan and
one loan for any other purpose outstanding at any time.
The Committee may in its absolute discretion grant such loan
in accordance with such uniform and nondiscriminatory rules
as it may from time to time establish. Any such loan shall
be made at a then prevailing commercial rate of interest for
similar credits on such terms of repayment (in level pay-ments
not less frequent than monthly) and subject to such
rules and restrictions as the Committee shall determine,
provided that any such loans shall be available to all
Members on a reasonably equivalent basis and that any loan
may be repaid at any time without penalty.
All Member loans shall be secured on a dollar for dollar
basis by up to 50% of the balance of the Accounts from which
the loan is made. To the extent a loan is unpaid, it shall
be deducted from the amount payable to such Member or such
Member's beneficiary at the time of distribution of the
Accounts from which the loan was made;
(b) In the event that a Member fails to repay a loan
according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Member's Accounts for which
a distributable event has occurred. In the event of fore-
closure, a distributable event shall be deemed to occur
immediately following the next Valuation Date for any por-
tion of an Account with respect to which the Member or the
Member's Beneficiary would be permitted in accordance with
Sections 9.1 or 10.1 to elect an immediate distribution;
(c) The receivable representing the loan (and other
loans to the same Member) will be accounted for by the
Trustee as a separate earmarked investment solely for the
individual account of the Member. A Member's payments to
the Trust of principal and interest on the loan shall be
invested by the Trustee as elected by the Member in accor-
dance with the Member's investment directions for future
contributions in accordance with Section 8.2, as soon as
reasonably practical;
(d) Loan applications may be obtained from the Commit-
tee or its designee at any time by any Member and completed
applications may be submitted to the Committee or its
designee at any time.
(e) No loan shall remain outstanding after a Member is
no longer a Party in Interest. If a Member who is no longer
a Party in Interest elects under Section 10.7 not to file a
claim for the commencement of benefits when the Member's
employment is terminated, the balance of any outstanding
loan must be repaid in full within sixty (60) days.
(f) Loan Origination Fee. From time to time the
Committee may set a reasonable loan origination fee for each
loan application. Such fees shall be deducted from loan
proceeds paid to loan applicants.
ARTICLE X
Distribution
10.1 Amount of Distribution. The Member or the Member's
beneficiary, as the case may be, shall not be entitled to elect
to receive a distribution of the vested value of the Member's
account until:
(a) the Member's Retirement, termination of employ-
ment, death or Permanent Disability, or
(b) termination of the Plan without establishment or
maintenance of a successor plan, or
(c) the date of sale of substantially all of the
assets of the Employer to an acquiring corporation which
continues the employment of the Member without the estab-
lishment of a successor plan.
The vested value of the Member's Account shall be determined
in accordance with Article VII (Vesting of Accounts) as of the
Valuation Date next following such election except that in the
case of the Member's Total and Permanent disability the vested
value of the Member's account shall be determined as of the
Valuation Date next following the date the committee determines
that the Member has a Total and Permanent Disability. In any
event, such Valuation Date shall be no later than the Valuation
Date which immediately precedes the Member's Required Beginning
Date (or the date which would have been the Member's Required
beginning Date had the Member survived). However, if the Membe-
r's Beneficiary is not the Member's spouse, distributions under
the Plan shall commence not later than (a) one year after the
Member's death if benefits are paid in the form of an annuity and
shall be paid over the Beneficiary's life or a period not in
excess of the Beneficiary's life expectancy or (b) five years
after the Member's death if benefits are paid in a lump sum.
10.2 Notice of Options and Normal Form of Distribution.
(a) No less than thirty (30) nor more than ninety
(90) days prior to the date of any distribution hereunder
the Plan Administrator shall provide the Member or the
Member's Beneficiary, as the case may be, with a general
description of the material features and an explanation of
the relative values of the optional forms of benefits avail-
able under the Plan.
(b) Unless otherwise elected in accordance with Sec-
tion 10.3 and subject to Section 10.7, distributions shall
be made by the Trustee as soon as practicable after the
Valuation Date next following the Member's (or the Member's
Beneficiary's as the case may be) election and written
consent to receive a distribution of the vested value of
such Member's Account, in a single sum in cash except that
(i) at the Member's option Employer Securities held in the
Member's Account and any of the tradeable securities held in
the Individually Directed Fund pursuant to Section 8.1(e)
may be distributed in kind and (ii) in the discretion of the
Committee, a note with respect to a Participant's loan from
such Member's Compensation Deferral Account may be distrib-
uted in kind.
(c) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribu-
tion may commence less than thirty (30) days after the
notice required under Reg. Section 1.411(a)-11(c) is given,
provided that:
(i) the Plan Administrator clearly informs the Member
that the Member has a right to a period of at least thirty
(30) days after receiving the notice to consider the deci-
sion of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(ii) the Member, after receiving the notice,
affirmatively elects a distribution.
10.3 Alternate Form of Distribution. A Member may request
to have the value of the Member's Accounts distributed in period-
ic installments at such time as the Member shall elect in accor-
dance with the Plan over a fixed period not to exceed the lesser
of ten years or the life expectancy of the Member at the time
payments commence. Payment of any interest in the Company Stock
Fund in a Member's Accounts, if any, to which the Member has a
nonforfeitable interest may be made in cash solely for the
purpose of effecting such an alternate form of distribution.
Distributions will be made in accordance with the require-
ments of the regulations under Code Section 401(a)9, including
the minimum distribution incidental benefit requirements of
Proposed Regulations Section 1.401(a)(9)-2. Such minimum distri-
bution requirements shall supersede any distribution options in
the Plan that are inconsistent therewith.
10.4 Identity of Payee. The determination of the Committee
as to the identity of the proper payee of any benefit under the
Plan and the amount of such benefit properly payable shall be
conclusive, and payment in accordance with such determination
shall constitute a complete discharge of all obligations on
account of such benefit.
10.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this Plan
shall be subject in any manner to alienation, sale, trans-
fer, assignment, pledge, attachment, or other legal process-
es, or encumbrance of any kind. Any attempt to alienate,
sell, transfer, assign, pledge or otherwise encumber any
such benefits, whether currently or thereafter payable,
shall be void. No benefit, nor any fund which may be estab-
lished for the payment of such benefits, shall, in any
manner, be liable for or subject to the debts or liabilities
of any person entitled to such benefits. If any person
shall attempt to, or shall alienate, sell, transfer, assign,
pledge or otherwise encumber benefits to which such person
may become entitled under this Plan, or if by reason of such
person's bankruptcy or other event happening at any time,
such benefits would devolve upon any other person or would
not be enjoyed by the person entitled thereto under the
Plan, then the Committee, in its discretion, may terminate
the interest in any such benefits of the person entitled
thereto under the Plan and hold or apply them to or for the
benefit of such person entitled thereto under the Plan or
such person's spouse, children or other dependents, or any
of them, in such manner as the Committee may deem proper.
(b) Notwithstanding Section 10.5(a), the Trustee
(i) shall comply with an order entered on or
after January 1, 1985, determined by the Committee to
be a Qualified Domestic Relations Order as provided in
Section 10.6 and
(ii) shall comply with a domestic relations order
entered before January 1, 1985, if benefits are already
being paid under such order, and
(iii) may treat an order entered before January
1, 1985, as a Qualified Domestic Relations Order even
if it does not meet the requirements of Section 10.6
(iv) shall comply with a Federal tax levy made
pursuant to Code Section 6331 and with collection
proceedings by the United States on a judgment result-
ing from an unpaid tax assessment.
10.6 Qualified Domestic Relations Order.
(a) The Plan shall comply with the provisions of Code
Section 414(p) relating to qualified domestic relations
orders and all regulations pertaining thereto.
(b) An alternate payee's interest in the Plan will be
distributed in the form of a single sum as soon as practica-
ble after a proposed order is determined to be a qualified
domestic relations order.
10.7 Commencement of Benefits. Unless a Member elects
otherwise, the payment of benefits under the Plan shall begin not
later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Member attains age 65;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an
Affiliate is terminated.
provided that, except as provided in Section 10.9, no benefits
shall be distributed unless the Member has filed a claim for
benefits until the Valuation Date immediately preceding the
Required Beginning Date and further provided that benefits shall
commence to be distributed to the Member not later than the
Member's Required Beginning Date.
10.8 Spousal Consent. A valid spousal consent to the
Member's naming of a Beneficiary other than the Member's spouse
shall be designated:
(a) in a writing acknowledging the effect of the
consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises the
consent;
provided that, notwithstanding the provisions of this Article X,
the consent of a Member's spouse shall not be required if it is
established to the satisfaction of the Plan Administrator that
such consent may not be obtained because there is no spouse,
because the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe.
10.9 Lump Sum Payment Without Election. Notwithstanding any
other provision of this Article X, if a Member or a Beneficiary
is entitled to a distribution and if the vested value of a
Member's Account or the vested value of the Beneficiary's share
of the Member's Account before benefits are paid or commence to
be paid hereunder does not exceed (and at the time of any previ-
ous distribution did not exceed) $3,500 ($5,000 after
December 31, 1997), the Committee may in accordance with uniform
and nondiscriminatory rules direct the immediate cash distribu-
tion of such benefit to the person entitled thereto regardless of
any election or consent of the Member, the Member's spouse or
other Beneficiary.
10.10 Trustee to Trustee Transfers.
(a) A Member who receives an Eligible Rollover
Distribution after December 31, 1992 may elect to have
such distribution paid directly to an Eligible Retire-
ment Plan by specifying in the Appropriate Notice the
Eligible Retirement Plan to which such distribution is
to be paid in a direct trustee to trustee transfer
pursuant to such uniform rules as to the form and time
of transfer as the Committee shall prescribe.
(b) (i) Eligible Rollover Distribution. An Eligible
Rollover Distribution is any distribution of all or a
portion of the balance to the credit of the Member
distributee, except that an Eligible Rollover Distribu-
tion 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 Member distributee or the joint
lives (or joint life expectancies) of the Member dis-
tributee and the Member's designated beneficiary, or
for a specified period of ten years or more; any dis-
tribution to the extent such distribution is required
under section 401(a) (9) of the Code; and the portion
of any distribution that is not includible in gross
income (determined without regard to the exclusion for
net unrealized appreciation with respect to Employer
Securities).
(b) (ii) Eligible Retirement Plan. An Eligible
Retirement Plan is an individual retirement account
described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section
401(a) of the Code, that accepts the Member Distri-
butee's Eligible Rollover Distribution. However, in
the case of an Eligible Rollover Distribution to the
surviving spouse of a Member, an Eligible Retirement
Plan is an individual retirement account or an individ-
ual retirement annuity.
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. The Committee shall be the Plan
Administrator:
(a) The Committee shall administer, enforce and inter-
pret the Plan and the trust agreement established hereunder
and shall have the powers necessary thereto, including but
not by way of limitation the powers to exercise its respon-
sibilities in accordance with Sections 1.3 (Appropriate
Notice), 1.11 (Compensation), 1.23 (Enrollment Date), 1.30
(Leave of Absence), 1.44 (Total and Permanent Disability),
Article II (Eligibility and Membership), 3.1 (Compensation
Deferral Contributions), 3.2 (Changes and Suspension of
Contributions), 6.1 (Maintenance of Accounts), 6.2 (Valua-
tions), Article VIII (Investment of Accounts), Article IX
(Withdrawals and Loans During Employment), 12.6 (Disburse-
ment of Funds), Article XIV (Miscellaneous), and the remain-
der of this Article XI and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 12.2
(Trustee), and
(c) Authority to direct the investment of the Plan's
funds shall be delegated to an Investment Manager in accor-
dance with Section 12.3 (Investment Manager).
With respect to all other responsibilities of the Plan
Administrator the Committee shall act through its duly authorized
officers and agents.
11.2 Board of Directors. With respect to Sections 4.1
(Employer Matching Contributions), 11.8 (Personal Liability),
13.1 (Right to Amend) and 13.2 (Suspension or Termination) the
Company or, as the case may be, an Employer shall act only by or
pursuant to, a resolution of its board of directors.
11.3 Appointment of Committee. The Committee shall be
appointed from time to time by the Board or any person authorized
by Board resolutions or by-laws of the Company to act on behalf
of the Company.
11.4 Compensation, expenses. All proper expenses incurred
by the Committee, an Employer, the Investment Manager or the
Trustee for accounting, legal and other professional, consulting
or technical services, including fees and expenses of the
Recordkeeper, required for the administration of the Plan, shall
be paid by the Employers. However, the normal investment and
custodial fees of the Investment Manager and of the Trustee shall
be paid by the Trust. Commissions for transactions in the
Individually Directed Fund shall be paid from such fund.
11.5 Committee Actions, Agents. The Committee may appoint
such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties and
may delegate to such agents such powers and duties as the Commit-
tee may deem expedient or appropriate.
Any action of the Committee, including but not by way of
limitation, instructions to the Trustee, shall be evidenced by
the signature of a member who has been so authorized by the
Committee to sign for it, and the Trustee shall be fully protect-
ed in acting thereon. A certificate of the secretary or an
assistant secretary of the Committee setting forth the name of
the members thereof shall be sufficient evidence at all times as
to the persons then constituting the Committee.
11.6 Committee Meetings. The Committee shall hold meetings
upon such notice, at such time and place as they may determine.
The Committee shall act by a majority of its members at the time
in office and such action may be taken from time to time by a
vote at a meeting or in writing without a meeting. A majority of
the members of the Committee at the time in office shall consti-
tute a quorum for transaction of business.
11.7 Authority and Duties of the Committee. The Committee
may from time to time establish rules for the administration of
the Plan. The Committee shall have the exclusive right to
interpret the Plan and to decide any matters arising thereunder
in connection with the administration of the Plan. It shall
endeavor to act by general rules so as not to discriminate in
favor of any person. Its decisions and the records of the
Committee shall be conclusive and binding upon the Employers,
Members and all other persons having an interest under the Plan.
No member of the Committee shall be disqualified from exercising
the powers and discretion herein conferred by reason of the fact
that the exercise of any such power or discretion may affect the
payment of benefits to such member under the Plan; however, no
member may vote on a matter relating exclusively to such member.
To the extent that it is administratively feasible, the period of
notice required for Member's elections to commence, change or
suspend contributions hereunder or to make or change investment
elections for either future contributions or existing accounts
may be relaxed, reduced or eliminated by the Committee in accor-
dance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all records and
other data as may be necessary for the administration of the
Plan.
11.8 Personal Liability. To the extent not contrary to the
provisions of ERISA, no member of the Committee, officer, direc-
tor or employee of an Employer shall be personally liable for
acts done in good faith hereunder unless resulting from such
member's own negligence or willful misconduct. Each such member
of the Committee, officer and director shall be, and they hereby
are, indemnified by each Employer adopting this plan against
expenses reasonably incurred by such member in connection with
any action to which he may be a party by reason of such member's
responsibilities hereunder, except in relation to matters as to
which such member shall be adjudged in such action to be liable
for negligence or misconduct in the performance of such member's
duty. However, nothing in this Plan shall be deemed to relieve
any person who is a fiduciary under the Plan for purposes of
ERISA from any responsibility or liability which such Act shall
impose upon such member.
11.9 Dealings Between the Committee and Individual Members.
Any notice required to be given to, or any document required to
be filed with, the Committee will be properly given or filed if
mailed by registered or certified mail, postage prepaid, or
delivered to the Chairman of the Benefits Committee of U.S.
Industries, Inc., 101 Wood Avenue South, Iselin, New Jersey
08830, or to such other place as the Committee may hereafter from
time to time designate.
The Committee shall make available to such Member for
examination, such of its records as pertain to the benefits to
which such Member shall be entitled under the Plan.
11.10 Information to be Supplied by an Employer. Each
Employer shall provide the Committee or its delegate with such
information as it shall from time to time need in the discharge
of its duties.
11.11 Records. The regularly kept records of the Committee
and each Employer shall be conclusive evidence of the Credited
Service and Service of an Employee, the Employee's Compensation,
age, marital status, status as an Employee, and all other matters
contained therein applicable to this Plan; provided that an
Employee may request a correction in the record of age or any
other disputed fact at any time prior to retirement. Such
correction shall be made if within 90 days after such request the
Employee furnishes the Committee in support thereof documentary
proof of age or the other disputed fact satisfactory to the
Committee.
11.12 Fiduciary Capacity. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the
Plan.
11.13 Fiduciary Responsibility. If a Plan fiduciary acts
in accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that a Member's spouse has consent-
ed to the naming of a Beneficiary other than the spouse or
that the consent of the Member's spouse may not be obtained
because there is no spouse, the spouse cannot be located or
other circumstances prescribed by the Secretary of the
Treasury by regulations, then to the extent of payments made
pursuant to such consent, revocation or determination, the
Plan and its fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or,
during any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in segregating in a separate
account in the Plan or in an escrow account the amounts
which would have been payable to the alternate payee during
such period if the order had been determined to be a Quali-
fied Domestic Relations Order in paying the amounts segre-
gated or held in escrow to the person entitled thereto if
within 18 months the domestic relations order (or a modifi-
cation thereof) is determined to be a Qualified Domestic
Relations Order, in paying such amounts to the person enti-
tled thereto if there had been no order if within 18 months
the domestic relations order is determined not to be quali-
fied or if the issue is not resolved within 18 months and in
prospectively applying a domestic relations order which is
determined to be qualified after the close of the 18-month
period, then the obligation of the Plan and its fiduciaries
to the Member and each alternate payee shall be discharged
to the extend of any payment made pursuant to such acts.
11.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit
application for benefits ("Claim") to the Committee (or to
such other person as may be designated by the Committee) in
writing in such form as is provided or approved by the
Committee. A Claimant shall have no right to seek review of
a denial of benefits, or to bring any action in any court to
enforce a Claim prior to filing a Claim and exhausting all
rights to review in accordance with this Section.
When a Claim has been filed properly, such Claim shall
be evaluated and the Claimant shall be notified of the
approval or the denial of the Claim within ninety (90) days
after the receipt of such Claim unless special circumstances
require an extension of time for processing the claim. If
such an extension of time for processing is required, writ-
ten notice of the extension shall be furnished to the Claim-
ant prior to the termination of the initial ninety (90) day
period, which notice shall specify the special circumstances
requiring an extension and the date by which a final deci-
sion will be reached (which date shall not be later than one
hundred and eighty (180) days after the date on which the
Claim was filed). A Claimant shall be given a written
notice in which the Claimant shall be advised as to whether
the Claim is granted or denied, in whole or in part. If a
Claim is denied, in whole or in part, the notice shall
contain (1) the specific reasons for the denial, (2) refer-
ences to pertinent Plan provisions upon which the denial is
based, (3) a description of any additional material or
information necessary to perfect the Claim and an explana-
tion of why such material or information is necessary, and
(4) the Claimant's rights to seek review of the denial.
(b) If a Claim is denied, in whole or in part, the
Claimant shall have the right to (i) request that the Com-
mittee (or such other person as shall be designated in
writing by the Committee) review the denial, (ii) review
pertinent documents, and (iii) submit issues and comments in
writing, provided that the Claimant files a written request
for review with the Committee within sixty (60) days after
the date on which the Claimant received written notification
of the denial. Within sixty (60) days after a request for
review is received, the review shall be made and the Claim-
ant shall be advised in writing of the decision on review,
unless special circumstances require an extension of time
for processing the review, in which case the Claimant shall
be given a written notification within such initial sixty
(60) day period specifying the reasons for the extension and
when such review shall be completed within one hundred and
twenty (120) days after the date on which the request for
review was filed. The decision on review shall be forwarded
to the Claimant in writing and shall include specific rea-
sons for the decision and references to Plan provisions upon
which the decision is based. A decision on review shall be
final and binding on all persons for all purposes. If a
Claimant shall fail to file a request for review in accor-
dance with the procedures herein outlined, such Claimant
shall have no rights to review and shall have no right to
bring action in any court and the denial of the Claim shall
become final and binding on all persons for all purposes.
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund(s). All assets of the Plan shall be held
in trust in one or more Trust Funds for the exclusive benefit of
Members and their Beneficiaries, and no part of the corpus or
income shall be used for or diverted to any other purpose. No
person shall have any interest in or right to any part of the
Trust Fund, except to the extent provided in the Plan.
12.2 Trustee(s). All contributions to the Plan shall be
paid to a Trustee or Trustees which shall be appointed from time
to time by the Company by appropriate instrument with such powers
in the Trustee or Trustees as to control and disbursement of the
funds as the Company shall approve and as shall be in accordance
with the Plan. The Company may remove any Trustee at any time,
upon reasonable notice and upon such removal or upon the resigna-
tion of any Trustee the Company shall designate a successor
Trustee.
12.3 Investment Manager. In accordance with the terms of
the trust agreement, the Company may appoint one or more Invest-
ment Managers (individuals and/or other entities), who may
include the Trustee and who are collectively referred to herein
as the Investment Manager, to direct the investment and reinvest-
ment of part or all of the Plan's funds that are not invested in
Employer Securities. The Company may change the appointment of
an Investment Manager from time to time.
12.4 Recordkeeper. The Company may appoint a Recordkeeper
(an individual or other business entity) to keep and maintain the
Member's Accounts and to perform such duties as shall be assigned
to such Recordkeeper by the Company including, but not limited
to, the Valuation of Accounts and the issuance of reports to
Members as required by the Plan. The Company may change the
appointment of the Recordkeeper from time to time.
12.5 Purchase and Holding of Securities. As soon as
convenient after receiving contributions, the Trustee or the
Investment Manager, as the case may be, shall:
(a) in the case of contributions to be invested in the
Company Stock Fund purchase Employer Securities in the open
market, and register and hold such securities in the name of
the Trustee or its nominee;
(b) in the case of contributions to the Balanced Fund,
The International Fund or the Emerging Growth Fund, purchase
or direct the purchase of such securities as it deems advis-
able to meet the objectives of the funds, and register such
investments in the name of the Trustee or its nominee;
(c) in the case of contributions to the Fixed Income
Fund, purchase guaranteed investment contracts, units of
bank collective trusts funds or short term interest bearing
instruments secure as to principal as it deems advisable and
register such investments in the name of the Trustee or its
nominee.
(d) in the case of the Individually Directed Fund,
invest as directed by the individual Member, and register
such investments in the name of the Trustee or its nominee
for the account of such Member.
12.6 Voting of Trust Fund Securities. For shareholders'
meetings Members shall be furnished proxy material and a form for
instructing the Trustee(s) how to vote the Employer Securities
represented by share equivalents credited to their Accounts and
the individual shares of voting stock held for their Accounts in
the Individually Directed Fund, and the Trustee(s) shall vote or
otherwise exercise shareholder rights with respect to such
securities as instructed. The Trustee(s) shall hold such in-
structions in confidence and shall not divulge them to anyone,
including, but not limited to, the Employers, their officers or
their employees.
Shares of Employer Securities for which no instructions are
received shall be voted by the Trustee in the same proportion as
those shares for which instructions have been received. With
respect to the exercise of shareholder's rights to sell or retain
the Employer Securities represented by share equivalents credited
to a Member's Accounts in extraordinary instances involving an
unusual price and terms and conditions for such securities such
as a tender offer, the Trustee shall act in accordance with the
Committee's instructions.
Shares of stock held for a Member in the Individually
Directed Fund for which no instructions are received shall be
voted at the discretion of the Trustee(s). With respect to
shareholder's rights to sell or retain securities held for the
account of a Member in the Individually Directed Fund in all
cases the Trustee(s) shall act in accordance with the instruc-
tions of the individual account holder.
12.7 Disbursement of Funds. The funds held by the Trust-
ee(s) shall be applied, in the manner determined by the Commit-
tee, to the payment of benefits to such persons as are entitled
thereto in accordance with the Plan.
The Committee shall determine the manner in which the funds
of the Plan shall be disbursed in accordance with the Plan,
including the form of voucher or warrant to be used in authoriz-
ing disbursements and the qualification of persons authorized to
approve and sign the same and any other matters incident to the
disbursement of such funds.
12.8 Exclusive Benefit of Members. All contributions under
the Plan shall be paid to the Trustee(s) and deposited in the
Trust Fund or Trust Funds and shall be held, managed and distrib-
uted solely in the interest of the Members and beneficiaries for
the exclusive purpose of providing benefits to Members and
beneficiaries and defraying reasonable administrative expenses of
the Plan and the Trust(s), to the extent such expenses are not
paid by the Company and Affiliates provided that:
(a) if the Plan is denied qualification under Section
401(a) of the Code, contributions conditioned upon the
initial qualification of the Plan shall be returned to the
Employer making such contributions within one year of the
denial of qualification;
(b) if, and to the extent, deduction for a contribu-
tion under Section 404 of the Code is disallowed, contribu-
tions conditioned upon deductibility shall be returned to
the Company or Affiliate within one year after the disallow-
ance of the deduction; and
(c) if, and to the extent, a contribution is made
through mistake of fact, such contribution shall be returned
to the Employer making such contribution within one year of
the payment of the contribution.
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. The Company reserves the right at
any time, and from time to time, to modify or amend in whole or
in part the provisions of the Plan, but no such amendment shall
divest any Member or any amount previously credited to a Member's
Accounts or, except to the extent permitted by the Secretary of
the Treasury by regulation, shall eliminate with respect to a
Member's Account balance at the time of such amendment an option-
al form of benefit, and further provided that no part of the
assets of the Trust Fund shall, by reason of any modification or
amendment, be used for or diverted to, purposes other than for
the exclusive benefit of Members and their Beneficiaries, under
the Plan.
13.2 Suspension or Termination. The Company may at any
time suspend Employer Matching Contributions and Compensation
Deferral Contributions in whole or in part. The suspension of
Employer Matching Contributions and Compensation Deferral Contri-
butions shall not in itself constitute a termination of the Plan.
The Company may at any time terminate or discontinue the Plan by
filing with the Committee a certified copy of the resolution of
the Board of Directors authorizing the termination or discontinu-
ance.
If the Plan is terminated, no further contributions shall be
made by any Employer and the Account of each Member shall be
applied for the Member's (or the Member's Beneficiary's) benefit
either by payment in cash or in kind, or by the continuation of
the Trust Fund in accordance with the trust instrument and the
provisions of the Plan as though the Plan were otherwise in full
force and effect.
13.3 Merger, Consolidation or Transfer. In the case of any
merger, or consolidation with, or transfer of assets or liabili-
ties to any other plan, each Member in the Plan would (if the
Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the
Plan had then terminated).
ARTICLE XIV
Miscellaneous
14.1 Uniform Administration. Whenever, in the administra-
tion of the Plan, any action is required by the Company, an
Employer or the Committee, including, but not by way of limita-
tion, action with respect to eligibility or classification of
employees, contributions or benefits, such action shall be
uniform in nature as applied to all persons similarly situated
and no such action shall be taken which will discriminate in
favor of Members who are officers or significant shareholders of
the Company, an Employer or persons whose principal duties
consist of supervising the work of other employees or highly
compensated Members.
14.2 Payment Due an Incompetent. If the Committee deter-
mines that any person to whom a payment is due hereunder is
incompetent by reason of physical or mental disability, the
Committee shall have power to cause the payments becoming due to
such person to be made to another for the benefit of the incompe-
tent, without responsibility of the Committee or the Trustee to
see to the application of such payment. Payments made in accor-
dance with such power shall operate as a complete discharge of
all obligations on account of such payment of the Committee, the
Trustee and the Trust Fund.
14.3 Source of Payments. All benefits under the Plan shall
be paid or provided solely from the Trust Fund and an Employer
assumes no liability or responsibility therefor, except to the
extent required by law.
14.4 Plan Not a Contract of Employment. Nothing herein
contained shall be deemed to give any Eligible Employee or Member
the right to be retained in the employ of an Employer or to
interfere with the right of an Employer to discharge any Eligible
Employee or Member at any time.
14.5 Applicable Law. Except to the extent governed by
Federal law the Plan shall be administered and interpreted in
accordance with the laws of the State of New York.
14.6 Unclaimed Amounts. It shall be the duty and responsi-
bility of a Member or a Beneficiary to keep the Committee ap-
prised of such Member's whereabouts and of such Member's current
mailing address. Unclaimed amounts shall consist of the amounts
of the Accounts of a retired, deceased or terminated Member which
cannot be distributed because of the Committee's inability, after
a reasonable search, to locate a Member or a Member's Beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be added to
the Suspense Account created pursuant to Section 4.3(f).
If an unclaimed amount is subsequently property claimed by
the Member or the Member's Beneficiary ("Reclaimed Amount") and
unless an Employer in its discretion makes a contribution to the
Plan for such year in an amount sufficient to pay such Reclaimed
Amount to the extent that the Reclaimed Amount originated as an
unclaimed amount, it shall be charged against other unclaimed
amounts placed in the Suspense Account for the Plan Year and, to
the extent such amounts are not sufficient, shall be treated as
an expense of the Trust Fund.
ARTICLE XV
Top Heavy Provisions
15.1 Application. The definitions in Section 15.2 shall
apply under this Article XIV and the special rules in Section
15.3 shall apply in accordance with Code Section 416, notwith-
standing any other provisions of the Plan, for any Plan Year in
which the Plan is a Top Heavy Plan and for such other Plan Years
as may be specified herein. This Article XIV shall have no
effect on the amount of or eligibility for benefits under the
Plan of a Member unless and until the Plan becomes a Top Heavy
Plan.
15.2 Special Top Heavy Definitions. The following special
definitions shall apply under this Article XIV.
(a) "Aggregate Employer Contributions means the sum of
all Employer Matching Contributions including amounts con-
tributed as a result of a salary reduction agreement and
Forfeitures under this Plan allocated to a Member in the
Plan and employer contributions and forfeitures allocated to
such Member in all Related Defined Contribution Plans in the
Aggregation Group; provided, however, that for Plan Years
beginning before January 1, 1985, Compensation Defined
Contributions under this Plan and employer contributions
attributable to compensation reduction or similar arrange-
ment under Related Defined Contribution Plans shall not be
included in Aggregate Employer Contributions.
(b) "Aggregation Group" means the group of plans in a
Mandatory Aggregation Group, if any, that includes the Plan,
unless inclusion of Related Plans in the Permissive Aggrega-
tion Group in the Aggregation Group would prevent the Plan
from being a Top Heavy Plan, in which case "Aggregation
Group" means the group of plans consisting of the Plan and
each other Related Plan in a Permissive Aggregation Group
with the Plan.
(i) "Mandatory Aggregation Group" means each plan
(considering the Plan and Related Plans) that, during
the Plan Year that contains the Determination Date or
any of the four preceding Plan Years,
(A) had a Member who was a Key Employee, or
(B) was necessary to be considered with a
plan in which a Key Employee participated in order
to enable the plan in which the Key Employee par-
ticipated to meet the requirements of Section
401(a)(A) and Section 410 of the Internal Revenue
Code.
If the Plan is not described in (A) or (B)
above, it shall not be part of a Mandatory Aggre-
gation Group.
(ii) "Permissive Aggregation Group" means the
group of plans consisting of (A) the plans, if any, in
a Mandatory Aggregation Group with the Plan, and (B)
any other Related Plan, that, when considered as a part
of the Aggregation Group, does not cause the Aggrega-
tion Group to fail to satisfy the requirements of
Section 401(a) and Section 410 of the Code. A Related
Plan in (B) of the preceding sentence may include a
simplified employee pension plan, as defined in Code
Section 408(k), and a collectively bargained plan, if
when considered as a part of the Aggregation Group such
plan does not cause the Aggregation Group to fail to
satisfy the requirements of Section 401(a)(4) and
Section 410 of the Code considering, if the plan is a
multi-employer plan as described in Code Section 414(f)
or a multiple employer plan as described in Code Sec-
tion 413(c), benefits under the plan only to the extent
provided as employees of the employer because of ser-
vice with the employer, and, if the plan is a simpli-
fied employee pension plan, only the employer's contri-
bution to the plan.
(c) "Determination Date" means, with respect to a
Plan Year, the last day of the preceding Plan Year or, in
the case of the first Plan Year, the last day of such Plan
Year. If the Plan is aggregated with other plans in the
Aggregation Group, the Determination Date for each other
plan shall be, with respect to any Plan Year, the Determina-
tion Date for each such other plan which falls in the same
calendar year as the Determination Date for the Plan.
(d) "Key Employee" means, for the Plan Year containing
the Determination Date, any person or the beneficiary of any
person who is an employee or former employee of an Employer
or an Affiliate as determined under Code Section 416(i) and
who, at any time during the Plan Year containing the Deter-
mination Date or any of the four (4) preceding Plan Years
(the "Measurement Period"), is a person described in para-
graph (1), (2), (3) or (4), subject to paragraph (5).
(i) An officer of an Employer or an Affiliate
who:
(A) In any Measurement Period, in the case
of a Plan Year beginning after December 31, 1983,
is an officer during the Plan Year and has annual
Compensation for the Plan Year in an amount great-
er than one hundred and fifty percent (150%) of
the amount in effect under Section 415(c)(1)(A) of
the Code for the calendar year in which such Plan
Year ends ($30,000 in 1984, adjusted in subsequent
years as determined in accordance with regulations
prescribed by the Secretary of the Treasury or his
delegate pursuant to the provisions of Section
415(d) of the Code); and
(B) In any Measurement Period, in the case
of a Plan Year beginning on or before January 1,
1984, is an officer during the Plan Year, regard-
less of his Compensation (except to the extent
that applicable law, regulations and rulings indi-
cate that the one hundred and fifty percent (150%)
requirement set forth in subparagraph (A) above is
applicable).
No more than a total of fifty (50) persons (or, if
lesser, the greater of three (3) persons or ten percent
(10%) of all persons or beneficiaries of persons who
are employees or former employees) shall be treated as
Key Employees under this paragraph (1) for any Measure-
ment Period. In the case of an Employer or an Affili-
ate which is not a corporation (I) in any Measurement
Period, in the case of a Plan Year beginning on or
before February 28, 1985, no persons shall be treated
as Key Employees under this paragraph (1); and (II) in
any Measurement Period, in the case of a Plan Year
beginning after February 28, 1985, the term "officer"
as used in this subsection (d) shall include adminis-
trative executives as described in Section 1.416-1(T-13) of the
Treasury Regulations.
(ii) one (1) of the ten (10) persons who, during
a Plan Year in the Measurement Period:
(A) have annual Compensation from an Employ-
er or Affiliate for such Plan Year greater than
the amount in effect under Section 415(c)(1)(A) of
the Code for the calendar year in which such Plan
Year ends ($30,000 in 1984, adjusted in subsequent
years as determined in accordance with regulations
prescribed by the Secretary of the Treasury or his
delegate pursuant to the provisions of Section
415(d) of the Code); and
(B) own (or are considered as owning within
the meaning of Code Section 318) in such Plan
Year, the largest percentage interests in the
Company or a Corporate Group, in such Plan Year,
provided that no person shall be treated as a Key
Employee under this paragraph unless he owns more
than one-half of one percent (0.5%) interest in
the Company or Corporate Group.
No more than a total of ten (10) persons or bene-
ficiaries of persons who are employees or former em-
ployees shall be treated as Key Employees under this
paragraph (2) for any Measurement Period.
(iii) A person who, for a Plan Year in the Mea-
surement Period, is a more than five percent (5%) owner
(or is considered as owning more than five percent (5%)
within the meaning of Code Section 318) of an Employer
or Affiliate.
(iv) A person who, for a Plan Year in the Mea-
surement Period, is a more than one percent (1%) owner
(or is considered as owning more than one percent (1%)
within the meaning of Code Section 318) of an Employer
or Affiliate and has a annual Compensation for such
Plan Year of more than $150,000.
(v) If the number of persons who meet the re-
quirements to be treated as Key Employees under para-
graph (i) or (ii) exceed the limitation on the number
of Key Employees to be counted under paragraph (i) or
(ii), those persons with the highest annual Compensa-
tion in a Plan Year in the Measurement Period for which
the requirements are met and who are within the limita-
tion on the number of Key Employees will be treated as
Key Employees.
Under paragraph (i), the Plan Year in the
Measurement Period in which a person who was an
officer and had the highest annual Compensation
shall be used to determine whether the person will
be treated as a Key Employee under the preceding
sentence.
Under paragraph (ii), the Plan Year in the
Measurement Period in which the ownership percent-
age interest is the greatest shall be used to
determine whether the person will be treated as a
Key Employee under the preceding sentence.
Notwithstanding the above provisions of para-
graph (iv), a person may be counted in determining
the limitation under both paragraphs (i) and (ii).
In determining the sum of the Present Value of
Accrued Benefits for Key Employees under subsec-
tion (f) of this Section, the Present Value of
Accrued Benefits for any person shall be counted
only once.
(e) "Non-Key Employee" means for the Plan Year
containing the Determination Date a person or the
beneficiary of a person who had an account balance in
the Plan or an account balance in any Related Plan in
the Aggregation Group during the Plan Year containing
the Determination Date or any of the four (4) preceding
Plan Years and who is not a Key Employee.
(f) "Present Value of Accrued Benefits" means,
for any Plan Year, an amount equal to the sum of (i),
(ii) and (iii) for each person, who in the Plan Year
containing the Determination Date, was a Key Employee
or a Non-Key Employee.
(i) Subject to (iv) below, the value of a
Member's Accounts under the Plan and each Related
Defined Contribution Plan in the Aggregation
Group, determined as of the valuation date coinci-
dent with or immediately preceding the Determina-
tion Date, adjusted for contributions due as of
the Determination Date, as follow:
(A) in the case of a plan not subject
to the minimum funding requirements of Sec-
tion 412 of the Code, by including the amount
of any contributions actually made after the
valuation date but on or before the Determi-
nation Date, and, in the first plan year of a
plan, by including contributions made after
the Determination Date that are allocated as
of a date in that first plan year; and
(B) in the case of a plan that is sub-
ject to the minimum funding requirements, by
including the amount of any contributions
that would be allocated as of a date not
later than the Determination Date, plus ad-
justments to those amounts as required under
applicable rulings, even though those amounts
are not yet required to be contributed or
allocated (e.g., because they have been
waived) and by including the amount of any
contributions actually made (or due to be
made) after the valuation date but before the
expiration of the extended payment period in
Section 412(c)(10) of the Code.
(ii) Subject to (iv) below, the sum of the
actuarial present values of a person's accrued
benefits under each Related Defined Benefit Plan
in the Aggregation Group, expressed as a benefit
commencing at normal retirement date (or the
person's attained age, if later) determined based
on the following actuarial assumptions:
(A) Interest rate 5% compounded; and
(B) 80% of the rates underlying the
1984 Unisex Pension Mortality Table, adjusted
by applying a 3-year age setback for the
Member's spouse, where applicable;
and determined in accordance with Code Section
416(g).
The present value of an accrued benefit for
any person who is employed by an Employer main-
taining a plan on the Determination Date is deter-
mined as of the most recent valuation date which
is within a 12-month period ending on the Determi-
nation Date, provided however that:
(C) for the first plan year of the
plan, the present value for an employee is
determined as if the employee had a termina-
tion of employment (X) on the Determination
Date or (Y) on such valuation date but taking
into account the estimated accrued benefits
as of the Determination Date; and
(D) for the second and subsequent plan
years of the plan, the accrued benefit taken
into account for an employee is not less than
the accrued benefit taken into account for
the first plan year unless the difference is
attributable to using an estimate of the
accrued benefit as of the Determination Date
for the first plan year and using the actual
accrued benefit as of the Determination Date
for the second plan year.
For purposes of this paragraph (ii), the
valuation date is the valuation date used by the
plan for computing plan costs for minimum funding,
regardless of whether a valuation is performed
that year.
If the plan provides for a nonproportional
subsidy as described in Treasury Regulations Sec-
tion 1.416-1(T-26), the present value of accrued
benefits shall be determined taking into account
the value of nonproportional subsidized early
retirement benefits and nonproportional subsidized
benefit options.
(iii) Subject to (iv) below, the aggregate
value of amounts distributed from the Plan and
each Related Plan in the Aggregation Group during
the plan year that includes the Determination Date
or any of the four preceding plan years including
amounts distributed under a termination plan
which, if it had not been terminated, would have
been in the Aggregation Group.
(iv) The following rules shall apply in
determining the Present Value of Accrued Benefits:
(A) Amounts attributable to qualified
voluntary employee contributions, as defined
in Section 219(e) of the Internal Revenue
Code, shall be excluded;
(B) In computing the Present Value of
Accrued Benefits with respect to rollovers or
plan-to-plan transfers, the following rules
shall be applied to determine whether amounts
which have been distributed during the five
(5) year period ending on the Determination
Date from or accepted into this Plan or any
plan in the Aggregation Group shall be in-
cluded in determining the Present Value of
Accrued Benefits:
(1) Unrelated Transfers accepted
into the Plan or any plan in the Aggre-
gation Group after December 31, 1983
shall not be included.
(2) Unrelated Transfers accepted
on or before December 31, 1983 and all
Related Transfers accepted at any time
into the Plan or any plan in the Aggre-
gation Group shall be included.
(3) Unrelated Transfers made from
the Plan or any plan in the Aggregation
Group shall be included.
(4) Related Transfers made from
the Plan or any plan in the Aggregation
Group shall not be included by the
transferor plan (but shall be counted by
the accepting plan).
The accrued benefit of any individual who has
not received any Compensation from an Employer
participating in the Plan (or a business which
with the Employer is an Affiliate) at any time
during the five (5) year period ending on the
Determination Date shall be excluded in computing
the Present Value of Accrued Benefits.
(g) "Related Plan" means any other defined bene-
fit plan or a defined contribution plan (as defined in
Section 415(k) of the Code maintained by an Employer or
other Affiliate, respectively called a "Related Defined
Benefit Plan" and a "Related Defined Contribution
Plan".
(h) "Related Transfer" means rollover or a plan-to-plan
transfer which is either not initiated by the
Employee or is made between plans each of which is
maintained by an Employer or an Affiliate.
(i) A "Top Heavy Aggregation Group" means the
Aggregation Group in any Plan Year for which, as of the
Determination Date, the sum of the Present Values of
Accrued Benefits for Key Employees under all plans in
the Aggregation Group exceeds sixty percent (60%) of
the sum of the Present Values of Accrued Benefits for
all employees under all plans in the Aggregation Group;
provided that, for purposes of determining the sum of
Present Values of Accrued Benefits for all employees,
there shall be excluded the Present Values of Accrued
Benefits of any Non-Key Employee who was a Key Employee
for any Plan Year preceding the Plan Year that contains
the Determination Date. For purposes of applying the
special rules herein with respect to a Super Top Heavy
Plan, a Top Heavy Aggregation Group will also consti-
tute a "Super Top Heavy Aggregation Group' if in any
Plan Year as of the Determination Date, the sum of the
Present Values of Accrued Benefits for Key Employees
under all plans in the Aggregation Group exceeds ninety
percent (90%) of the sum of the Present Values of
Accrued Benefits for all employees under all plans in
the Aggregation Group.
(j) "Top Heavy Plan" means the Plan in any Plan
Year in which it is a member of a Top Heavy Aggregation
Group, including a Top Heavy Aggregation Group consist-
ing solely of the Plan. For purposes of applying the
rules herein with respect to a Super Top Heavy Plan, a
Top Heavy Plan will also constitute a "Super Top Heavy
Plan" if the Plan in any Plan Year is a member of a
Super Top Heavy Aggregation Group consisting solely of
the Plan.
(k) "Unrelated Transfer" means a rollover or a
plan-to-plan transfer which is both initiated by an
Employee and (a) made from a plan maintained by an
Affiliate to a plan maintained by an Employer which is
not an Affiliate or (b) made to a plan maintained by an
Affiliate from a plan maintained by an Employer which
is not an Affiliate.
15.3 Special Top Heavy Provisions. For each Plan Year in
which the Plan is a Top Heavy Plan, the following rules shall
apply, except that the special provisions of this Section 15.3
shall not apply with respect to any employee who is covered by a
collective bargaining agreement between employee representatives
and one or more Employers unless participation by such employee
in the Plan has been agreed to by the parties to such agreement.
(a) Minimum Employer Contributions.
(i) In any Plan Year in which the Plan is a Top
Heavy Plan, the Employers hall make additional Employer
Contributions to the Plan as necessary for each Member
who is employed on the last day of the Plan Year and
who is a Non-Key Employee to bring the amount of each
Member's Aggregate Employer Contributions for the Plan
Year up to at least three percent (3%) of each Member's
Compensation, or if the Plan is not required to be
included in an aggregation group in order to permit a
defined benefit plan in the Aggregation Group to satis-
fy the requirements of Section 401(a)(4) or Section 410
of the Internal Revenue Code, such lesser amount as is
equal to the largest percentage of a Key Employee's
Compensation (as limited in accordance with Section
15.3(c)) allocated to the Key Employee as Aggregate
Employer Contributions.
(ii) Notwithstanding Section 15.3(a)(1), if there
is a Related Defined Benefit Plan in the Aggregation
Group, if a Non-Key Employee participates in both the
Plan and a Related Defined Benefit Plan and
(A) if the Related Defined Benefit Plan
provides the minimum benefit required under Code
Section 416(c)(1) for the Non-Key Employee, then
no minimum Employer Contribution shall be required
under this Section 15.3(a),
(B) if the Related Defined Benefit Plan does
not provide the minimum benefit required under
Code Section 416(c)(1) for the Non-Key Employee,
then the minimum Aggregate Employer Contribution
under this Section 15.3(a) shall be five percent
(5%) of such Non-Key Employee's Compensation.
(iii) For purposes of determining whether a
Non-Key Employee is a Member entitled to have minimum
Employer Contributions made for such Member, a Non_Key
Employee will be treated as Member even if he is not
otherwise a Member (or accrues no benefit) under the
Plan because:
(A) such Member has failed to complete the
requisite number of Hours of Service (if any)
after becoming a Member in the Plan,
(B) such Member is excluded from participa-
tion in the Plan (or accrues no benefit) merely
because his compensation is less than a stated
amount, or
(C) such Member is excluded from participa-
tion in the Plan (or accrues no benefit) merely
because of a failure to make mandatory employee
contributions or, if the Plan is a Plan described
in Section 401(k) of the Code, because of a fail-
ure to make elective (401(k)) contributions.
(b) Vesting. For each Plan Year in which the Plan is
a Top Heavy Plan and for each Plan Year thereafter, the
vesting schedule under the Plan shall be three (3) year
cliff vesting under which each Member shall be zero percent
vested in the Employer Contribution Account until such
Member has three (3) years of Service after which a Member
shall be 100% vested in such Account; provided that this
vesting schedule shall not apply to the Accrued Benefit of
any Member who does not have an Hour of Service in or after
a Plan Year in which the Plan is Top Heavy.
(c) Compensation. For each Plan Year in which the
Plan is a Top Heavy Plan, Compensation taken into account
under the Plan shall not exceed $200,000 (as at 1984, ad-
justed in subsequent years for the cost of living adjust-
ments determined in accordance with regulations prescribed
by the Secretary of the Treasury or his delegate pursuant to
the provisions of Section 416(d)(2) of the Code); provided
that the $200,000 limitation of Compensation shall not apply
for purposes of Section 5.3 and the limitations on Employee
Contributions in Section 3.1(b). Notwithstanding the pre-
ceding sentence, Compensation in excess of $200,000 (adjust-
ed as provided in the preceding sentence) for years before
the Plan became a Top Heavy Plan shall be taken into account
(to the extent otherwise provided in the Plan) in determin-
ing a person's Accrued Benefit accrued in such years and
Compensation in excess of $200,000 (adjusted as provided in
the preceding sentence) for years after the Plan ceases to
be a Top Heavy Plan shall be taken into account (to the
extent otherwise provided in the Plan) in determining a
person's Accrued Benefit for all years, including years in
which the Plan was a Top Heavy Plan.
(d) Top Heavy Limitations.
(i) In computing the limitations under Section
5.3 hereof, if the Plan is a Top Heavy Plan and is not
a Super Top Heavy Plan, the special rules of Section
416(h) of the Internal Revenue Code shall be applied in
accordance with applicable regulations and rulings so
that
(A) in determining the denominator of the
Defined Contributions Plan Fraction and the De-
fined Benefit Plan Fraction, at each place at
which "1.25" would have been used, "1.00" shall be
substituted and
(B) in determining the numerator of the
transition fraction described in Section
415(e)(6)(B) of the Internal Revenue Code by sub-
stituting $41,500 for $51,875
unless the special requirements of Section 416(h)(2) of
the Internal Revenue Code have been satisfied.
(ii) In computing the limitations under Section
5.3 thereof, if the Plan is a Super Top Heavy Plan, the
special rules of Section 416(h) of the Code shall be
applied in accordance with applicable regulations and
rulings so that
(A) in determining the denominator of the
Defined Contribution Plan Fraction and the Defined
Benefit Plan Fraction, at each place at which
"1.25" would have been used, "1.00" shall be sub-
stituted and
(B) in determining the numerator of the
transitional fraction described in Section
415(e)(6)(B) of the Internal Revenue Code, $41,500
shall be substituted for $51,875.
(e) Terminated Plan. If the Plan becomes a Top Heavy
Plan after it has formally been terminated, has ceased
crediting for benefit accruals and vesting and has been or
is distributing all plan assets to Members and their benefi-
ciaries as soon as administratively feasible or if a termi-
nated plan has distributed all benefits to Members and their
beneficiaries, the provisions of Section 15.3 shall not
apply to the Plan.
(f) Frozen Plans. If the Plan becomes a Top Heavy
Plan after contributions have ceased under the Plan but all
assets have not been distributed to Members or their benefi-
ciaries, the provisions of Section 15.3 shall apply to the
Plan.
15.4 Effect of Change in Applicable Legislation or Regula-
tion. In the event that Congress should provide by statute or
the Secretary of the Treasury should provide by regulation a
ruling, that the provisions of this Article XIV are no longer
necessary for the Plan to meet the requirements of Section 401(a)
or other applicable provisions of the Code, such limitations
shall become void and shall no longer apply, without the necessi-
ty of further amendment to the Plan.
EXHIBIT 4(c)
THE HURON RETIREMENT SAVINGS & INVESTMENT PLAN FOR
EMPLOYEES REPRESENTED BY UAW LOCAL 213
(Effective June 1, 1998)<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Appropriate Notice" . . . . . . . . . . . . . . . . . . 1
1.4 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . 1
1.5 "Board" or "Board of Directors" . . . . . . . . . . . . . 1
1.6 "Code". . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 "Committee" . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 "Company" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 "Compensation" . . . . . . . . . . . . . . . . . . . . . 1
1.10 "Compensation Deferral Contributions". . . . . . . . . . 2
1.11 "Compensation Deferral Contributions Account". . . . . . 2
1.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
1.13 "Eligible Employee". . . . . . . . . . . . . . . . . . . 2
1.14 "Employee" . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 "Employee Contributions" . . . . . . . . . . . . . . . . 2
1.16 "Employee Contributions Account" . . . . . . . . . . . . 3
1.17 "Employer" . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 "Employer Securities". . . . . . . . . . . . . . . . . . 3
1.19 "Enrollment Date". . . . . . . . . . . . . . . . . . . . 3
1.20 "Enrollment Period". . . . . . . . . . . . . . . . . . . 3
1.21 "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 "Hour of Service". . . . . . . . . . . . . . . . . . . . 3
1.23 "Initial Enrollment Date". . . . . . . . . . . . . . . . 4
1.24 "Investment Fund". . . . . . . . . . . . . . . . . . . . 4
1.25 "Investment Manager" . . . . . . . . . . . . . . . . . . 4
1.26 "Leased Employee". . . . . . . . . . . . . . . . . . . . 4
1.27 "Leave of Absence" . . . . . . . . . . . . . . . . . . . 4
1.28 "Member" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 "Parental Leave" . . . . . . . . . . . . . . . . . . . . 5
1.30 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 "Plan Year". . . . . . . . . . . . . . . . . . . . . . . 5
1.32 "Prior Plan" . . . . . . . . . . . . . . . . . . . . . . 5
1.33 "Prior Plan Account" . . . . . . . . . . . . . . . . . . 6
1.34 "Required Beginning Date". . . . . . . . . . . . . . . . 6
1.35 "Retirement" . . . . . . . . . . . . . . . . . . . . . . 6
1.36 "Rollover Contribution". . . . . . . . . . . . . . . . . 6
1.37 "Rollover Contribution Account". . . . . . . . . . . . . 6
1.38 "Service". . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 "Suspense Account" . . . . . . . . . . . . . . . . . . . 6
1.40 "Total and Permanent Disability" . . . . . . . . . . . . 6
1.41 "Trustee". . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . 7
1.43 "Valuation Date" . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. . . . . . . . . . . . . . . . . . 7
2.2 Eligible Employees on and after the Effective Date. . . . 7
2.3 Completion of Appropriate Notice. . . . . . . . . . . . . 7
2.4 Elections Upon Becoming A Member. . . . . . . . . . . . . 7
2.5 Beneficiary Designation.. . . . . . . . . . . . . . . . . 8
2.6 Transfers to or from Non-Covered Status.. . . . . . . . . 8
2.7 Rollover Contributions From Other Plans.. . . . . . . . . 8
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions.. . . . . . . . . . . 9
3.2 Changes and Suspension of Contributions.. . . . . . . . . 10
3.3 Transfer of Contributions to Trustee. . . . . . . . . . . 10
ARTICLE IV
Limitations on, and Distribution of,
Excess Compensation Deferral
Contributions of Highly Compensated
Employees
4.1 Limitations.. . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Control of Contributions and Distribution of Excess.. . . 12
4.3 Limitation of Annual Additions. . . . . . . . . . . . . . 13
ARTICLE V
Miscellaneous
5.1 Uniform Administration. . . . . . . . . . . . . . . . . . 15
5.2 Payment Due an Incompetent. . . . . . . . . . . . . . . . 15
5.3 Source of Payments. . . . . . . . . . . . . . . . . . . . 16
5.4 Plan Not a Contract of Employment.. . . . . . . . . . . . 16
5.5 Applicable Law. . . . . . . . . . . . . . . . . . . . . . 16
5.6 Unclaimed Amounts.. . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI
Accounts
6.1 Maintenance of Accounts.. . . . . . . . . . . . . . . . . 16
6.2 Valuations. . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII
Vesting of Accounts
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts .. . . . . . . . . . . . . . . . . 17
8.2 Redirection of Future Contributions.. . . . . . . . . . . 19
8.3 Reinvestment of Prior Contributions.. . . . . . . . . . . 19
8.4 Statements of Accounts And Confirmation of Investment
Directions. . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Crediting of Accounts.. . . . . . . . . . . . . . . . . . 20
8.6 Correction of Errors. . . . . . . . . . . . . . . . . . . 21
8.7 Investment of Deferred Distributions. . . . . . . . . . . 21
8.8 The Self-Directed Window. . . . . . . . . . . . . . . . . 24
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. . . . . . . . . . . . . . . . . . . . 21
9.2 Hardship Withdrawals. . . . . . . . . . . . . . . . . . . 23
9.3 Values. . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.4 Payment of Withdrawals . . . . . . . . . . . . . . . . . 23
9.5 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X
Distribution
10.1 Amount of Distribution.. . . . . . . . . . . . . . . . . 25
10.2 Notice of Options and Normal Form of Distribution. . . . 25
10.3 Alternate Form of Distribution.. . . . . . . . . . . . . 26
10.4 Identity of Payee. . . . . . . . . . . . . . . . . . . . 27
10.5 Non-alienation of Benefits.. . . . . . . . . . . . . . . 27
10.6 Qualified Domestic Relations Order.. . . . . . . . . . . 28
10.7 Commencement of Benefits.. . . . . . . . . . . . . . . . 28
10.8 Annuities. . . . . . . . . . . . . . . . . . . . . . . . 28
10.9 Spousal Consent. . . . . . . . . . . . . . . . . . . . . 30
10.10 Payment Without Election . . . . . . . . . . . . . . . 31
10.11 Trustee to Trustee Transfers . . . . . . . . . . . . . 31
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator.. . . . . . . . . . . . . . . . . . . 32
11.2 Board of Directors.. . . . . . . . . . . . . . . . . . . 33
11.3 Appointment of the Committee.. . . . . . . . . . . . . . 33
11.4 Compensation, Expenses.. . . . . . . . . . . . . . . . . 33
11.5 Committee Actions, Agents. . . . . . . . . . . . . . . . 33
11.6 Committee Meetings.. . . . . . . . . . . . . . . . . . . 33
11.7 Authority and Duties of the Committee. . . . . . . . . . 33
11.8 Personal Liability.. . . . . . . . . . . . . . . . . . . 34
11.9 Dealings Between the Committee and Individual
Members. . . . . . . . . . . . . . . . . . . . . . . . . 34
11.10 Information To Be Supplied by the Employer. . . . . . . 34
11.11 Records.. . . . . . . . . . . . . . . . . . . . . . . . 35
11.12 Fiduciary Capacity. . . . . . . . . . . . . . . . . . . 35
11.13 Fiduciary Responsibility. . . . . . . . . . . . . . . . 35
11.14 Claim Procedure.. . . . . . . . . . . . . . . . . . . . 35
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund.. . . . . . . . . . . . . . . . . . . . . . . 37
12.2 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 37
12.3 Investment Manager.. . . . . . . . . . . . . . . . . . . 37
12.4 Purchase and Holding of Securities.. . . . . . . . . . . 37
12.5 Voting of Employer Securities. . . . . . . . . . . . . . 38
12.6 Disbursement of Funds. . . . . . . . . . . . . . . . . . 38
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend.. . . . . . . . . . . . . . . . . . . . . 39
13.2 Suspension or Termination. . . . . . . . . . . . . . . . 39
13.3 Merger, Consolidation of Transfer. . . . . . . . . . . . 40
<PAGE>
This document sets forth the provisions of the Huron
Retirement Savings & Investment Plan for Employees Represented by
UAW Local 213 (the "Plan"), effective as of June 1, 1998. The
Plan is established pursuant to a collective bargaining agreement
by and between Huron Inc. and UAW Local 213.
The Plan and its related Trust Fund are intended to qualify
as a profit-sharing plan and trust under Code Sections 401(a) and
501(a), and the cash or deferred arrangement forming part of the
Plan is intended to qualify under Section 401(k). The provisions
of the Plan and Trust Fund shall be construed and applied
accordingly. The purpose of this Plan is to provide benefits to
Members in a manner consistent and in compliance with such Code
Sections and Title I of ERISA.
<PAGE>
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by the
context, the following words and phrases shall have the meanings
indicated. Some of the words and phrases used in the Plan are
not defined in this Article I, but, for convenience are defined
as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions
Account, Compensation Deferral Contributions Account, Rollover
Contribution Account or Prior Plan Account as the context re-
quires.
1.2 "Affiliate" means any company which is related to the
Employer as a member of a controlled group of corporations in
accordance with Section 414(b) of the Code, as a trade or busi-
ness under common control in accordance with Section 414(c) of
the Code or members of an affiliated service group as defined
under Section 414(m) of the Code.
1.3 "Appropriate Notice" means the written form, electron-
ic procedure or other method prescribed by the Committee to
convey information for a particular purpose.
1.4 "Beneficiary" means the person or persons designated by
the Plan or by a Member under Section 2.5 (Beneficiary Designa-
tion) to receive benefits payable under the Plan as a result of
the Member's death.
1.5 "Board" or "Board of Directors" means the Board of
Directors of the Employer.
1.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time and references to sections thereof
shall be deemed to include any such sections as amended, modified
or renumbered.
1.7 "Committee" means the Benefits Administration Committee
appointed in accordance with Section 11.3 (Appointment
of Committee).
1.8 "Company" means the corporation that owns 100% of the
capital stock of the Employer or any person, firm, corporation or
partnership which may succeed to its business.
1.9 "Compensation" means with respect to a Plan Year, the
sum of the amount reported by the Employer to the Internal
Revenue Service on Form W-2 as the Member's compensation for such
calendar year, the amount of any Compensation Deferral Contribu-
tions made on such Member's behalf to the Plan and the amount, if
any, contributed to a cafeteria plan that is excluded from gross
income pursuant to Section 125 of the Code; but exclusive of
termination or severance pay, prizes, awards, grievance settle-
ments, overseas cost of living allowances, relocation allowances,
mortgage assistance, executive perquisites, stock options, and
such other extraordinary items or remuneration as the Committee
shall determine from time to time pursuant to such uniform and
nondiscriminatory rules as it shall adopt. On and after January
1, 1989 the Compensation of each Employee taken into account
under the Plan for any Plan Year shall not exceed $200,000 as
thereafter adjusted for inflation in accordance with Section
415(d) of the Code. For Plan Years beginning after 1993 the
Compensation of each Employee taken into account under the Plan
for any such Plan Year shall not exceed $150,000 as thereafter
adjusted for inflation in accordance with Section 401(a)(17)(B)
of the Code.
1.10 "Compensation Deferral Contributions" means contribu-
tions made by the Employer pursuant to an election by the Member
to reduce the cash compensation otherwise currently payable to
such Member by an equivalent amount, in accordance with the
provisions of Section 3.1 (Compensation Deferral Contributions).
1.11 "Compensation Deferral Contributions Account" means
the separate account maintained for a Member to record such
Member's share of the Trust Fund attributable to Compensation
Deferral Contributions made on such Member's behalf.
1.12 "Effective Date" means June 1, 1998, the date that the
Plan became effective.
1.13 "Eligible Employee" means an Employee of either the
Huron Inc. plant located in Lexington, Michigan, or the plant
located at Port Huron, Michigan, and who is employed on the
Effective Date or who (i) has attained age 21 and (ii) has
worked, at least 1,000 Hours of Service during a consecutive
twelve-month period and who is covered by a collective bargaining
agreement between the Employer and Local 213.
1.14 "Employee" means a person (but not including a person
acting only as a director) who is employed by the Employer.
Leased Employees shall also be treated as Employees for purposes
of this Plan unless: (i) such Leased Employees are covered by a
Plan described in Code Section 414(n)(5) and (ii) such Leased
Employees constitute less than Twenty Percent (20%) of the
Employer's non-highly compensated workforce as defined in Code
Section 414(n)(5)(c).
1.15 "Employee Contributions" means after tax contributions
that were made by a Member to a Prior Plan.
1.16 "Employee Contributions Account" means the separate
account maintained for a Member to record such Member's share of
the Trust Fund attributable to the Member's Employee Contribu-
tions.
1.17 "Employer" means Huron Inc.
1.18 "Employer Securities" means the Common Stock of
U.S. Industries, Inc., a Delaware Corporation.
1.19 "Enrollment Date" means the first day of each month in
the Plan Year.
1.20 "Enrollment Period" means the period commencing on an
Enrollment Date and ending on the next following Enrollment Date.
1.21 "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
1.22 "Hour of Service" means each hour for which an Employ-
ee is paid, or entitled to payment, or receives earned income
from an Employer or an Affiliate:
(a) for performance of duties;
(b) on account of a period of time which no duties
were performed, provided that except in the case of a Leave
of Absence, no more than 501 Hours of Service shall be
credited for any single continuous period during which an
Employee performs no duty, and provided that no Hours of
Service shall be credited for periods of time in respect of
which an Employee receives severance pay or for payments
made or due under a plan maintained solely for the purpose
of complying with applicable workers' compensation, unem-
ployment compensation or disability insurance laws, or for
reimbursement of medical expenses; and
(c) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Employer provided
that Hours of Service credited under (a) or (b) shall not be
credited under (c).
Hours of Service credited to an Employee for the performance
of duties will be credited to the computation period in which the
duties are performed. The determination of Hours of Service for
reasons other than the performance of duties shall be made in
accordance with the provisions of Labor Department Regulations
Section 2530.200b-2(b), and Hours of Service shall be credited to
the computation periods to which the award or agreement pertains.
Except in the case of a Leave of Absence, not more than 501 Hours
of Service shall be credited for any continuous period during
which an Employee performs no duty or, in the case of service
required to be credited for payments of back pay awarded or
agreed to, for a period during which an employee did not or would
not have performed duties.
To the extent not credited above, during a Leave of Absence
an Employee shall be credited with a number of Hours of Service
for each week of such Leave of Absence equal to the Employee's
weekly average number of Hours of Service scheduled for the six-week
period immediately preceding such Leave of Absence.
In any case in which an individual becomes an Employee upon
the acquisition of all or a portion of the business of his or her
former employer by the Employer or an Affiliate, whether by
merger, acquisition of assets or stock, or otherwise, his or her
service with his or her predecessor employer shall be included in
determining his or her Hours of Service if, and to the extent
that, such service is required to be credited hereunder (A) by
section 414(a) of the Code and any regulations promulgated
thereunder, (B) by the terms of the agreement pursuant to which
the business of such former employer was acquired by the Employer
or an Affiliate, or (C) by vote of the Board of Directors.
1.23 "Initial Enrollment Date" means the earliest date
following the Effective Date set by the Committee for Eligible
Employees to apply to become Members of the Plan.
1.24 "Investment Fund" means the investment choices de-
scribed in Section 8.1 (Investment of Accounts).
1.25 "Investment Manager" means the individual and/or other
entity appointed in accordance with Section 12.3 (Investment
Manager) who has acknowledged in writing that such individual is
a fiduciary with respect to the Plan and who is:
(a) registered as an investment adviser under the
Investment Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage,
assign or dispose of assets of pension plans.
1.26 "Leased Employee" shall mean any person who pursuant
to an agreement between the Employer and any other person has
performed services for the Employer or any related person as
defined in Code Section 414(n)(6) under the primary direction and
control of the Employer or such related person on a substantially
full time basis for a period of at least one year.
1.27 "Leave of Absence" means an absence or interruption of
service approved by the Committee under uniform and
nondiscriminatory rules and procedures. Members on leave of
absence for service in the Armed Forces of the United States,
however, shall be deemed to have been on Leave of Absence,
provided they return to service with an Employer within the
required time limitations set forth in the then applicable laws
governing reemployment rights of persons inducted, or who have
enlisted, in the Armed Forces.
1.28 "Member" means an Eligible Employee who has become a
member of the Plan in accordance with Article II (Eligibility and
Membership). Each Member shall continue to be such until the
later of the date such Member ceases to be an Eligible Employee
or such Member's Accounts have been completely distributed.
1.29 "Parental Leave" means a period not in excess of two
(2) years commencing after December 31, 1984 during which an
individual is absent from work for any period:
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the
individual,
(c) by reason of the placement of a child with
the individual in connection with the adoption of such
child by such individual, or
(d) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless the
Employee furnishes the Plan Administrator such timely information
as may reasonably be required to establish that the absence from
work was for one of the reasons specified in this Section 1.31
and the number of days for which there was such an absence.
Nothing contained herein shall be construed to establish an
Employer policy of treating a Parental Leave as a Leave of
Absence.
1.30 "Plan" means The Huron Retirement Savings & Investment
Plan for Employees Represented by UAW Local 213, as set forth
herein or as amended from time to time.
1.31 "Plan Year" means the calendar year.
1.32 "Prior Plan" means an employee benefit plan qualified
under Section 401(a) of the Code all or part of the assets of
which are transferred to the Plan in a transaction which meets
the requirements of Regulation 1.414(l) of the Code.
1.33 "Prior Plan Account" means the separate account main-
tained for a Member to record such Member's share of the Trust
Fund attributable to employer contributions to the plans de-
scribed herein as Prior Plans.
1.34 "Required Beginning Date" means April 1 of the year
following the Plan Year in which occurs the later of the date
that the Member terminates employment or the date on which the
Member attains the age of 70-1/2 years.
1.35 "Retirement" means a Member's normal, early or de-
ferred retirement whichever shall apply to the Member under the
provisions of the Employer's pension plan applicable to such
Member, or the termination of employment of a Member on or after
such Member's attainment of age 65.
1.36 "Rollover Contribution" means an amount which is
transferred from another plan to this Plan, in accordance with
the provisions of Section 2.7 (Rollover Contribution From Other
Plans).
1.37 "Rollover Contribution Account" means the separate
Account maintained for a Member to record such Member's share of
the Trust Fund attributable to any Rollover Contribution made to
the Plan on his behalf.
1.38 "Service" means the period of employment beginning on
the first day the Eligible Employee performs duties for the
Employer or an Affiliate and ending on the day of quit, retire-
ment, discharge or death, two years after the commencement of
absence on account of Parental Leave, or one year after an
absence for any other reason. All prior periods of employment
with the Employer or an Affiliate, and breaks in employment of
less than one year shall be included in Service. If a break in
employment of not more than two years is on account of Parental
Leave not more than one year of Service shall be credited to an
Eligible Employee for a period of Parental Leave.
1.39 "Suspense Account" means the separate account main-
tained for a Member who had monies credited to such account
pursuant to Section 4.3 (Limitation of Annual Additions), re-
flecting the current dollar value of such credit.
1.40 "Total and Permanent Disability" means permanent
incapacity which results in a Member being unable to engage in
regular employment or occupation by reason of any medically
demonstrable physical or mental condition acceptable to the
Committee on a nondiscriminatory basis and which would entitle
the Member to benefits under the Employer's long-term disability
plan, if any, or to Social Security benefits as evidenced by a
disability award letter. However, no Member shall be deemed to
be disabled if such incapacity (a) resulted from or consists of
habitual drunkenness or addiction to narcotics, or (b) was in-
curred, suffered or occurred while the Member was engaged in, or
resulted from having engaged in, a criminal enterprise, or (c)
was intentionally self-inflicted.
1.41 "Trustee" means the corporate trustee appointed from
time to time by the Company to administer the Trust Fund in
accordance with Section 12.2 (Trustee).
1.42 "Trust Fund" means the trust fund established in
accordance with Section 12.1 (Trust Fund) from which benefits
provided under this Plan will be paid.
1.43 "Valuation Date" means the last business day of each
calendar month on which the New York Stock Exchange is open for
trading.
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. Each person who was a member
of a Prior Plan shall become a member of the Plan on the effec-
tive date of the transaction referred to in Section 1.34.
2.2 Eligible Employees on and after the Effective Date. On
and after the Effective Date an Eligible Employee may elect to
become a Member on the Initial Enrollment Date or any Enrollment
Date thereafter. Notwithstanding the foregoing, a former employ-
ee who is reemployed following a termination of employment and
who, prior to termination, satisfied the conditions for member-
ship in the Plan, shall not be eligible to become a Member of the
Plan until the first anniversary of his or her reemployment.
2.3 Completion of Appropriate Notice. In order to become a
Member on any Enrollment Date, an Eligible Employee must give the
Appropriate Notice to the Committee at least 30 days (or such
other period as the Committee may prescribe) prior to that
Enrollment Date.
2.4 Elections Upon Becoming A Member. An Eligible Employ-
ee, in giving the Appropriate Notice specified in Section 2.3,
shall (a) authorize the Employer to reduce current compensation
for Compensation Deferral Contributions pursuant to Section 3.1
(Compensation Deferral Contributions), (b) make an investment
election from among those options enumerated in Section 8.1
(Investment of Accounts) and (c) designate a Beneficiary in
accordance with Section 2.5 (Beneficiary Designation). Any such
payroll authorization, investment election or Beneficiary desig-
nation shall remain in effect until changed by giving the Appro-
priate Notice to the Committee subject to the provisions of the
Plan.
2.5 Beneficiary Designation. Each Member shall designate a
Beneficiary by giving the Appropriate Notice to the Committee.
The designated Beneficiary may be an individual, estate or trust;
however, if the Member is married at the time of such Member's
death, such Member's surviving spouse shall automatically be such
Member's sole Beneficiary unless the spouse has consented in
writing in accordance with Section 10.9 (Spousal Consent) to a
designation of a different Beneficiary. If more than one indi-
vidual or trust is named, the Member shall indicate the shares
and/or precedence of each individual or trust so named. Any
Beneficiary so designated may be changed by the Member at any
time (subject to his spouse's consent, if applicable) by giving
the Appropriate Notice to the Committee.
In the event that no Beneficiary has been designated or that
no designated Beneficiary survives the Member, the following
Beneficiaries (if then living) shall be deemed to have been
designated in the following priority: (a) spouse, (b) children,
including adopted children, in equal shares, (c) parents, in
equal shares, or the Member's surviving parent, if only one
parent survives, and (d) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a Member
ceases to meet the definition of Eligible Employee as set forth
in Section 1.13 (Eligible Employee) but continues to be an
Employee or an employee of an Affiliate, such Member's right to
make or have contributions made on such Member's behalf to the
Plan shall be suspended. If during the period of suspension, a
Member's employment with the Employer or an Affiliate terminates
for any reason, there shall be a distribution of such Member's
Accounts in accordance with the provisions of Article X (Distri-
bution).
If and when the suspended Member again becomes an Eligible
Employee, such Member may resume having Compensation Deferral
Contributions made on such Member's behalf as of the second
Enrollment Date following the month in which the Appropriate
Notice is given to the Committee.
2.7 Rollover Contributions From Other Plans. An Eligible
Employee or an individual who meets the definition of Eligible
Employee in Section 1.13 except for the age or service require-
ments, who is in receipt of a distribution which is eligible to
be "rolled over" to a qualified plan in accordance with applica-
ble Code sections may, in accordance with and subject to
such rules and procedures approved by the Committee, transfer all
or part of such distribution into the Plan; provided, that
distributions which are so transferred to the Plan shall consist
only of cash and that such transfer shall be in conformity with
requirements set forth in the Code.
Upon approval by the Committee, the amount transferred to
the Plan shall be deposited in the Trust Fund in cash and shall
be credited to a Rollover Contribution Account.
If a Rollover Contribution is made on behalf of an individu-
al who has not yet become a Member, such individual shall be
deemed a Member upon the establishment of the Rollover Contribu-
tion Account; however, participation in the Plan shall be limited
to the Rollover Contribution Account until the other requirements
for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member who
is an Eligible Employee may elect to have the Employer make
Compensation Deferral Contributions not to exceed $10,000 per
year (subject to adjustment for inflation in accordance with
Section 415(d) of the Code) to the Plan on such Member's behalf
to be credited to such Member's Compensation Deferral Contributions
Account, in which case the cash compensation otherwise
payable by the Employer to the Member shall be reduced by an
amount equal to the Compensation Deferral Contributions so made.
Subject to the limitations prescribed in Section 4.1 the amount
of Compensation Deferral Contributions in any payroll period
shall be in whole percentages from 1% to 17% of the Member's
Compensation as the Member shall designate (or such greater or
lesser percentages as the Committee may from time to time prescribe for
the Plan).
The foregoing notwithstanding during the 'make up period,'
as defined below, a former Member (a 'Veteran') who is reemployed
after a period of military service may elect to have the Employer
make additional Compensation Deferral Contributions to the Plan
on such Veteran's behalf, the total of which may not exceed the
maximum Compensation Deferral Contributions that the Veteran
could have elected to have made if no military leave had oc-
curred. For the purposes of calculating the amount of such
additional Compensation Deferral Contributions the Veteran's
Compensation during such leave of absence shall be deemed to have
been the Veteran's annual rate of compensation at the time the
military leave of absence commenced (the 'Deemed Compensation
Rate') and the 'make up period' during which such additional
Compensation Deferral Contributions may be elected shall be equal
to the lesser of five years or three times the period of the
military leave of absence. Such additional Compensation Deferral
Contributions in any payroll period shall be in whole percentages
of the Veteran's current payroll and shall not exceed the maximum
amount that could have been deferred at the Deemed Compensation
Rate. In the event that the additional Compensation Deferral
Contributions to the Plan on a Veteran's behalf that are autho-
rized by this paragraph exceed the limitations set forth in
Article IV of the Plan or otherwise conflict with provisions of
the Code or ERISA, such limitations or conflicts shall be ignored
to the extent permitted by Code Section 414(u).
3.2 Changes and Suspension of Contributions. Compensation
Deferral Contributions made on a Member's behalf may be increased
or decreased or suspended effective on the second Enrollment Date
following the month in which the Appropriate Notice is given to
the Committee. A Member who has suspended Compensation Deferral
Contributions may resume having such contributions made on his or
her behalf commencing on the second Enrollment Date following the
month in which the Appropriate Notice is given to the Committee.
3.3 Transfer of Contributions to Trustee. Contributions
made under this Article III will be transferred to the Trustee by
the 15th day of the month following the month in which the
contributions are withheld from the Member's Compensation and/or
in which the Member's cash compensation is reduced; provided that
all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 30 days after the end
of the Plan Year.
ARTICLE IV
Limitations on, and Distribution of, Excess Compensation
Deferral Contributions of Highly Compensated Employees
4.1 Limitations. The Committee in its sole discretion shall
separately limit the amount of Compensation Deferral Contribu-
tions made on behalf of each "Highly Compensated Employee" (as
defined below) for each Plan Year to insure that neither the
Deferral Percentage nor the Contributions Percentage ( as defined
below and referred to herein as the "Percentage") does not exceed
the greater of (X) 125 percent of the Percentage in the preceding
Plan Year of all other eligible employees or, alternatively, (Y)
the Percentage in the preceding Plan Year of all other eligible
employees plus 2 percentage points and the actual Percentage for
the Highly Compensated Employees is not more than two times the
actual Percentage in the preceding Plan Year of all other eligi-
ble employees.
For purposes of this Section, the term "Deferral Percentage"
with respect to any Plan Year means the Compensation Deferral
Contributions for the Plan Year divided by Compensation.
For the purposes of this Section, the term "Highly Compen-
sated Employee" with respect to any Plan Year means an Eligible
Employee or former Eligible Employee who performed services
during the Plan Year for which the determination is being made
and:
(a) at any time during such Plan Year or preceding Plan
Year was a 5-percent owner of the Employer (as defined for
top-heavy plans under Code Sec. 416(1); or
(b) earned $80,000 or more in the preceding Plan Year
(subject to adjustment for inflation in accordance with
Section 415(d) of the Code) in annual Compensation from the
Employer.
(1) For the purposes of this Section, the term "Compensation"
means Compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria plan,
cash or deferred arrangement or tax sheltered annu-
ity.
(2) For the purpose of this Section the term "Employer" shall
also include all other entities aggregated with the Employer
under the requirements of Code Section 414(b), (c), (m) and (o).
For purposes of this Section, the Employer is permitted to
determine whether Members are in the category of Highly Compen-
sated Employees or other Eligible Employees based on the Member's
Compensation for the immediately preceding Plan Year or on
estimated Compensation for the Current Plan Year in accordance
with uniform and nondiscriminatory rules whenever information
regarding actual Compensation for the Plan Year is not reasonably
available at the time the amount of a contribution hereunder is
determined or limited.
For purposes of this Section the definition of "Compensation
Deferral Contributions" shall include Compensation Deferral
Contributions made under any other plan that is aggregated with
this Plan for purposes of Sections 401(a)(4) or 410(b) (other
than Section 410(b)(2)(A)(ii)) of the Code and if any such plan
is permissively aggregated with this Plan for the purposes of
Section 401(k) of the Code, the plans so aggregated must also
satisfy Section 401(a)(4) and 410(b) as if they were a single
plan. Further, for the purposes of this Section, Compensation
Deferral Contributions made on behalf of each Highly Compensated
Employee shall be determined by treating all cash or deferred
arrangements under which each such Highly Compensated Employee is
eligible as a single arrangement.
4.2 Control of Contributions and Distribution of Excess.
Rules For Compensation Deferral Contributions. The Committee
may, in accordance with uniform and nondiscriminatory rules it
establishes from time to time, require that Members who are among
the Highly Compensated Employees for the Plan Year make Compensa-
tion Deferral elections following and/or preceding the completion
of such elections by all other Eligible Employees and the Commit-
tee may (X) limit the amount by which each Member who is among
the Highly Compensated Employees may elect to reduce his or her
Compensation, and (Y) subject to Section 402(g) of the Code
permit each other Eligible Employee to elect to reduce his or her
Compensation within higher limits than those for Highly Compen-
sated Employees.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Compensation Deferral
Contributions to be made with respect to such Enrollment Period
would cause the limitation contained in this Section to be
exceeded for the Plan Year in which such Enrollment Period
occurs, the amount of Compensation Deferral Contributions allowed
to be made on behalf of Highly Compensated Employees for such
Enrollment Period shall be reduced. The Highly Compensated
Employees to whom the reduction is applicable, and the amount of
the excess Compensation Deferral Contributions, shall be deter-
mined by reducing the actual Deferral Contributions of the Highly
Compensated Employee or Employees with the highest actual Defer-
ral Contributions to the extent required to--
(i) enable the arrangement to satisfy the limita-
tion set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or
Employees' actual Deferral Compensation to equal the
Deferral Compensation of the Highly Compensated Employ-
ee or Employees with the next highest actual Deferral
Compensation.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
If the Committee determines that the limitations contained
in this Section have not been met for any Plan Year, the Commit-
tee may return the excess Compensation Deferral Contributions of
Members who are Highly Compensated Employees (calculated in the
manner set forth above) to such Members within the 12-month
period beginning after the last day of the Plan Year for which
such contributions were made. The amount of such excess Compen-
sation Deferral Contributions shall be adjusted to reflect any
income or loss allocable to such excess during the Plan Year
determined in accordance with the alternative method set forth in
Reg. Section 1.401(k)-1(f)(4)(ii)(c) and also from the end of the
Plan Year to the date of distribution determined in accordance
with the safe harbor method set forth in Reg. Section 1.401(k)-1(f)(4)(2)(d).
4.3 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the con-
trary, in no event shall the Annual Additions (as here-
inafter defined) with respect to any Member in any Plan
Year exceed the Maximum Annual Addition. A Member's
"Maximum Annual Additions" means the lesser of (i) 25%
of the Member's compensation reported on Form W-2
(after December 31, 1997, compensation for the purposes
of Annual Additions shall also include elective or
salary reduction contributions to a cafeteria plan,
cash or deferred compensation arrangement or tax shel-
tered annuity) or (ii) the dollar limit in effect for
such Plan Year in accordance with Section 415(c)(1)(A)
of the Code ($30,000 as hereafter adjusted for infla-
tion in accordance with Section 415(d) of the Code),
(b) For purposes of this Section 4.3 the term
"Annual Additions" means the sum for any Plan Year of
(i) Compensation Deferral Contributions
made in accordance with Section 3.1 (Compen-
sation Deferral Contributions),
(ii) The amount of annual additions (within
the meaning of Section 415(c)(2) of the Code)
under all other qualified defined contribution
plans of the Employer or an Affiliate.
(c) If the Member's Annual Additions exceed the
Maximum Annual Additions limitations in accordance with
this Section 4.3, such amounts shall not be contributed
to the Trust or, if contributed by or on behalf of a
Member under the Plan shall be reduced to the extent
necessary to meet the limitations.
(d) Combined Fraction.
(i) Notwithstanding the foregoing, for any Plan
Year beginning before January 1, 2000, if a Member is a
participant in any qualified defined benefit plan main-
tained by an Employer or an Affiliate, the sum of the
"Defined Benefit Plan Fraction" (as defined below) and
the "Defined Contribution Plan Fraction" (as defined
below) for such Member shall not exceed 1.0 (called
"Combined Fraction"). If for any Plan Year the Com-
bined Fraction of a Member exceeds 1.0 after applica-
tion of provisions for limitation of benefits under all
such qualified defined benefit plans, the Maximum
Annual Additions of such Member shall be reduced as
provided in Section 4.3(c) to the extent necessary to
reduce the Combined Fraction of such Member to 1.0.
(ii) The "Defined Benefit Plan Fraction" applica-
ble to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all of the qualified de-
fined benefit Plans maintained by the Employer or an
Affiliate, (whether or not terminated) in which such
Member participates (determined as of the close of the
Plan Year) and the denominator of which is the lesser
of (A) the product of 1.25 multiplied by the maximum
dollar limitation on a Member's Projected Annual Bene-
fit if the plan provided the maximum benefit allowable
under Section 415(b) of the Code for such Plan Year, or
(B) the product of 1.4 multiplied by 100% of the
Member's Highest Average Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefit plans main-
tained by the Employer which were in existence on July
1, 1982, the denominator of this fraction will not be
less than 1.25 multiplied by the sum of the annual
benefits under such plans which the Member had accrued
as of the later of September 30, 1983, or the last
limitation year beginning before January 1, 1983. The
preceding sentence applies only if defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at
the end of the 1982 limitation year.
(iii) The "Defined Contribution Plan Fraction"
applicable to a Member for any Limitation Year is a
fraction, the numerator of which is the sum of the
Member's Annual Additions as of the close of such Plan
Year for that Plan Year and for all prior Plan Years
under all of the defined contribution plans maintained
by an Employer or an Affiliate in which Member partici-
pates, and the denominator of which is the lesser of
the following amounts (determined for such Plan Year
and for each prior Plan Year of service with the Em-
ployer or any Affiliate regardless of whether a plan
was in existence during those years): (A) the product
of 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for the Plan Year
(determined without regard to the special dollar limi-
tation for employee stock ownership plans), or (B) the
product of 1.4 multiplied by twenty-five percent of the
Member's Compensation for the Plan Year.
(e) Definitions.
(i) "Highest Average Compensation" means the
average of a Member's high three consecutive Plan Years
(determined as of the close of the Plan Year) of em-
ployment with the Employer or the actual number of
years of employment for those Members who are employed
for less than three consecutive years with the Employ-
er.
(ii) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contribu-
tions under a defined benefit plan, adjusted, in the
case of any benefit payable in a form other than a
single life annuity or a qualified joint and survivor
annuity, to the actuarial equivalent of a single life
annuity, assuming (A) the Member continues employment
until reaching the plan's normal retirement age (or the
Member's current age, if later), (B) compensation
remains unchanged and (C) all other relevant factors
used to determine benefits under the plan remain con-
stant in the future.
(f) For purposes of this Section 4.3, the standard of
control for determining if a company is an Affiliate under
Section 414(b) and 414(c) of the Internal Revenue Code shall
be deemed to be "more than 50%" rather than "at least 80%."
ARTICLE V
Miscellaneous
5.1 Uniform Administration. Whenever, in the administra-
tion of the Plan, any action is required by the Employer or the
Committee, including, but not by way of limitation, action with
respect to eligibility or classification of employees, contribu-
tions or benefits, such action shall be uniform in nature as
applied to all persons similarly situated and no such action
shall be taken which will discriminate in favor of Members who
are officers or significant shareholders of the Employer or
persons whose principal duties consist of supervising the work of
other employees or highly compensated Members.
5.2 Payment Due an Incompetent. If the Committee deter-
mines that any person to whom a payment is due hereunder is
incompetent by reason of physical or mental disability, the
Committee shall have power to cause the payments becoming due to
such person to be made to another for the benefit of the incompe-
tent, without responsibility of the Committee or the Trustee to
see to the application of such payment. Payments made in accor-
dance with such power shall operate as a complete discharge of
all obligations on account of such payment of the Committee, the
Trustee and the Trust Fund.
5.3 Source of Payments. All benefits under the Plan shall
be paid or provided solely from the Trust Fund and the Employer
assumes no liability or responsibility therefor, except to the
extent required by law.
5.4 Plan Not a Contract of Employment. Nothing herein
contained shall be deemed to give any Eligible Employee or Member
the right to be retained in the employ of the Employer or to
interfere with the right of the Employer to discharge any Eligi-
ble Employee or Member at any time.
5.5 Applicable Law. Except to the extent governed by
Federal law the Plan shall be administered and interpreted in
accordance with the laws of the State of New York.
5.6 Unclaimed Amounts. It shall be the duty and responsi-
bility of a Member or a Beneficiary to keep the Committee ap-
prised of such Member's whereabouts and of such Member's current
mailing address. Unclaimed amounts shall consist of the amounts
of the Accounts of a retired, deceased or terminated Member which
cannot be distributed because of the Committee's inability, after
a reasonable search, to locate a Member or a Member's Beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be Forfei-
tures for the Plan Year in which such two-year period shall end.
Such Forfeitures shall be treated as provided in Section 5.2.
If an unclaimed amount is subsequently properly claimed by
the Member or the Member's Beneficiary ("Reclaimed Amount") and
unless an Employer in its discretion makes a contribution to the
Plan for such year in an amount sufficient to pay such Reclaimed
Amount to the extent that the Reclaimed Amount originated as an
unclaimed amount, it shall be charged against Forfeitures for the
Plan Year and, to the extent such Forfeitures are not sufficient,
shall be treated as an expense of the trust fund.
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. For each Member the Committee
shall, where applicable, cause a separate Compensation Deferral
Contributions Account, a Rollover Contribution Account and a
Prior Plan Account to be maintained. For Employee contributions
made to a Prior Plan which were not Compensation Deferral Contri-
butions the Committee shall continue to maintain a separate
Employee Contributions Account.
6.2 Valuations. As of each Valuation Date, the Committee
shall adjust the Employee Contributions Account, the Compensation
Deferral Contributions Account, the Rollover Contribution Account
and Prior Plan Account, as applicable, for each Member to reflect
his share of contributions (including for this purpose contribu-
tions made after such Valuation Date but credited as of such
Valuation Date), amounts of interest paid or accrued in respect
of a loan made to such Member pursuant to Section 9.5, withdraw-
als, distributions, forfeitures, income, expenses payable from
the Trust Fund and any increase or decrease in the value of Trust
Fund assets since the preceding Valuation Date. Each separate
account maintained for each loan made to a Member pursuant to
Section 9.5 shall be valued as of each Valuation Date by adjust-
ing the balance of the loan for the payments of principal there-
under.
ARTICLE VII
Vesting of Accounts
Interests in Compensation Deferral Contributions Accounts,
Prior Plan Accounts, Rollover Contribution Accounts and Employee
Contributions Accounts shall be fully vested at all times.
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts. Upon becoming a Member, each
Member (1) may elect to participate in the Self-Directed Window
investment program described in Section 8.8, below and (2) shall
also direct that Compensation Deferral Contributions and any
Prior Plan Contributions, Rollover Contributions or Employee
Contributions (to the extent not invested in the Self-Directed
Window) be invested in increments of 1% in one or more of the
following Investment Funds (or such other Fund as may hereafter
be approved by the Committee), which are designated as "Core
Funds", and which individually and collectively (including the
Self-Directed Window program) are designed to conform to DOL
Regulation 2550.404c-1 for so-called Section 404(c) plans in
order that fiduciaries of the Plan may be relieved of liability
for any losses which are the direct and necessary result of a
Member's investment directions.
A. The following Investment Funds are considered Core Funds:
(1) The Company Stock Fund, which is invested in
Employer Securities. Members will not be permitted to
direct that an investment be made in the Company Stock Fund
unless and until the Member has received a prospectus in
respect of Employer Securities in the Company Stock Fund
which meets the requirements of the Securities Act of 1933
or in the opinion of counsel for the Company such investment
may be otherwise permitted.
(2) The Merrill Lynch Retirement Preservation Trust
("RP Trust"), which is a collective trust fund that invests
primarily in Guaranteed Investment Contracts (GICS) and
United States Government and United States Government Agency
securities. The RP Trust also invests high quality, money
market instruments. The RP Trust's primary objective is to
achieve a high current income consistent with preservation
of capital and liquidity. Dividends are declared and invested daily.
(3) The Federated Bond Fund, seeks high income by
investing in a wide range of bonds, including lower-rated,
high-yielding bonds.
(4) The MFS Massachusetts Investors Trust, seeks
current income and long-term growth of capital and income,
by investing in a conservative portfolio of equity securities
considered to be of high or improving quality. However, the Fund
may invest some of its assets in securities
of foreign issuers, and may buy and sell certain "derivative"
instruments, contracts or options for the purposes of
hedging or increasing its return.
(5) The Nicholas-Applegate Income & Growth Fund, which
seeks maximum total return, consisting of long-term capital
appreciation and current income, by investing primarily in
convertible and equity securities. In evaluating convertibles,
Fund management searches for "changes in the margin"
(e.g., positive business developments which are not yet
fully reflected in a company's stock price). The Fund may
invest in securities rated below investment grade, sometimes
called "junk bonds," which are speculative and involve
greater risks, including risk of default, than higher-rated
securities.
(6) PIMCO Small Cap Value Fund, seeks long term growth
of capital and income, by investing primarily in common
stocks of companies with market capitalizations between $50
million and $1 billion that have improving fundamentals and
whose stock is reasonably valued by the market.
(7) Gam International Fund, which is invested in securities
issued by companies in any country other than the
United States and will normally invest in securities issued
by companies in Canada, the United Kingdom, Continental
Europe and the Pacific Basin. Under normal market conditions,
the Fund will invest in securities of companies in at
least three foreign countries. For temporary defensive
measures, GAM International Fund may invest in securities of
United States companies and the United States government and
its agencies and instrumentalities.
(8) Merrill Lynch Growth Fund, seeks to provide growth
of capital and, secondarily, income. The Fund seeks to meet
its objective by investing in a diversified portfolio or
primarily equity securities placing principal emphasis on
those securities which management of the Fund believes to be
undervalued. The Fund may also invest in some of its assets
in foreign securities.
(9) GoalManager Model Portfolios, a research tool which
offers portfolios consisting of different asset allocations
of the Investment Funds with varying degrees of risk and
return. Members may select any one of the following three
asset allocation model portfolios:
(i) Conservative Portfolio, which invests 35% of its
assets in the stable value option, 45% in the bond fund
and 20% in stock funds.
(ii) Moderate Portfolio, which invests 10% of its
assets in the stable value option, 25% in the bond fund
and 65% in stock funds.
(iii) Aggressive Portfolio, which invests 10% of its
assets in the stable value option, 10% in the bond fund
and 80% in stock funds.
If a Member elects one of the model portfolios, Compensation
Deferral Contributions, Prior Plan Contributions, Rollover
Contributions or Employee Contributions, will automatically
be allocated in the Investment Funds in the model. In
order to adhere to the individual goals of the model portfolios,
GoalManager may determine that a reconfiguration of
the Investment Funds and percentage allocations among those
Investment Accounts is appropriate. Members will receive
notification prior to any reconfiguration.
(10) The Nicholas Applegate High Yield Bond Fund, which
seeks a high level of current income and capital growth by
investing, under normal conditions, at least 65% of its
total assets in lower-rated debt securities (commonly referred
to as "junk bonds"). The Fund may invest up to 35%
of its total assets in equity securities of U.S. and foreign
companies.
(11) The Davis Real Estate Fund, which seeks total return by
investing primarily in securities of companies principally
engaged in or related to the real estate industry; which own
significant real estate assets; or which primarily invest in
real estate financial instruments. The Fund may invest in
foreign securities.
(12) Merrill Lynch Global Allocation Fund, Inc. seeks high
total investment return consistent with prudent investment
practice. The Fund invests in U.S. and foreign equity, debt
and money market securities. The Fund may invest some of
its total assets in non-investment grade securities, commonly
referred to as high-yield or "junk" bonds, which may
be subject to greater market fluctuations and risk of loss
of income and principal than securities in higher rating
categories.
(13) Nicholas Applegate Emerging Countries Fund, which seeks
maximum long-term capital appreciation by investing at least
65% of its total assets in securities of issuers located in
at least three different countries. The Fund invests primarily in
equity securities of issuers located in countries
with emerging securities markets, (i.e., markets that have
yet to reach a level of maturity associated with developed
foreign stock markets, especially in terms of participation
by foreign investors).
(14) Merrill Lynch Latin America Fund, Inc., which seeks
long-term capital appreciation by investing primarily in
Latin American equity and debt securities. The Fund may
also seek to hedge against market and currency risk. There
can be no assurance that the hedging strategies used by the
Fund will be successful.
(15) Merrill Lynch Pacific Fund, Inc., which seeks long-term
capital appreciation, by investing primarily in equities of
corporations domiciled in Far Eastern or Western Pacific
countries, including Japan, Australia, Hong Kong and Singapore.
The Fund may also seek to hedge against market and
currency risk. There can be no assurance that the hedging
strategies used by the Fund will be successful.
(16) Pioneer Europe Fund, which seeks long-term growth of
capital through investment in a diversified portfolio of
securities, or depository receipts, of companies that (1)
are organized under the laws of a European country and have
a principal office in a European country, (2) derive 50% or
more of their total revenues from business in Europe, or (3)
whose equity securities are traded principally on a European
stock exchange.
(17) Seligman Communications and Information Fund, Inc.,
which seeks capital gain primarily investing in the common
stock or similar securities of companies in the communications,
information and related industries. The Fund may
also invest in foreign securities.
8.2 Redirection of Future Contributions. A Member's
investment direction under Section 8.1 may be changed at any time
and will be effective for contributions received for the current
month provided that the Appropriate Notice is received by the
Committee before 2 P.M. Eastern Time on the last business day of
the month. Such change in direction will not be effective as to
amounts previously contributed or invested.
8.3 Reinvestment of Prior Contributions.
(a) Effective on the Enrollment Date following the
month in which the Appropriate Notice is received by the
Committee (not later than 2 P.M. Eastern Time on the last
business day of the month) a Member may direct that up to
the total value in any Investment Fund holding investments
from the Member's Compensation Deferral Contributions Acc-
ount, Prior Plan Account, Rollover Contribution Account or
Employee Contributions Account be transferred from such
Investment Fund to any other Investment Fund in increments
of 1%.
(b) The Committee may, in its sole discretion, impose
at any time or from time to time such restrictions on the
transfers of monies from one Investment Fund to another as
it deems necessary or appropriate.
8.4 Statements of Accounts And Confirmation of Investment
Directions.
(a) Statements of Accounts. Each Member shall be
furnished a quarterly statement of accounts. A like
statement shall be furnished to a Member upon any
distribution being made under the Plan.
(b) Confirmations of Investment Directions. All
investment directions given by Members under the Plan
shall be confirmed in writing.
8.5 Crediting of Accounts.
As of each Valuation Date, each Account will be adjusted to
reflect the fair market value of the assets allocated to the
Account. In so doing,
(a) each Account balance will be increased by the amount of
contributions, income and gain allocable to such Account since
the prior Valuation Date; and
(b) each Account balance will be decreased by the amount of
distributions from the Account and expenses and losses allocable
to the Account since the prior Valuation Date.
Any expenses relating to a specific Account or Accounts,
including without limitation, commissions or sales charges with
respect to an investment in which the Account participates, may
be charged solely to the particular Account or Accounts.
To the extent a Member's Compensation Deferral Contributions
Account is invested pursuant to Section 9.5 in a loan to a
Member, the Member's Accounts shall be credited and charged
directly with income, gains, losses and expenses attributable to
such loan as of each Valuation Date and the value of the account
will be adjusted through the date of a distribution to reflect
the value of such direct investments on the distribution date.
8.6 Correction of Errors. In the event of an error in the
adjustment of a Member's Account, the Committee, in its sole
discretion, may correct such error by either crediting or charg-
ing the adjustment required to make such correction to or against
Forfeitures for the Plan Year or to or against income as an
expense of the Trust for the Plan Year in which the correction is
made, or if an Employer contributes an amount to correct any such
error, from such amount. Except as provided in this Section, the
Accounts of other Members shall not be readjusted on account of
such error.
8.7 Investment of Deferred Distributions. Former Members
of the Plan shall have the same investment options for their
Accounts as are available for the Accounts of current Members of
the Plan.
8.8 The Self-Directed Window.
The Self-Directed Window is an individual account with a
registered broker-dealer (the "Broker") nominated by the Committee
which holds Compensation Deferral Contributions and any Prior
Plan Contributions, Rollover Contributions or Employee Contribu-
tions, to be invested at the direction of the Member in any
tradable securities which can be maintained by the Broker,
subject, however to limitations on such investments that are
required to conform to DOL Reg. 2550.404c-1 for Section 404(c)
plans.
Members shall have the opportunity, at least once in any
3-month period, to give investment instructions to the Administrator
(with an opportunity to obtain written confirmation of such
instructions) as to the investment of contributions made on his
or her behalf among the investment options. The Plan Administrator
shall be obligated to comply with such instructions except as
otherwise provided in the ERISA Section 404(c) regulations. The
Plan Administrator shall prescribe the form and manner in which
such directions shall be made, as well as the frequency with
which directions may be made or changed, and the dates as of
which they shall be effective, in a manner consistent with the
foregoing. The Plan Administrator shall be the fiduciary identified
to furnish the information contemplated by ERISA Section
404(c), but may designate on its behalf another person or entity
to provide such information or to perform any of the obligations
of the Administrator under this Section 8.8.
<PAGE>
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. In any twelve-month period a
Member may make one withdrawal from the Plan that is not less
than $500 or the combined total of all of the eligible funds in
the Member's Accounts from which withdrawals may be made, provided,
however, that if a Member maintains a Self-Directed
Window, no direct withdrawals may be made from the Self-Directed
Window. Eligibility includes:
(a) Hardship Eligibility. In the event of Hardship
(as defined in Section 9.2) before age 59-1/2, the entire
balance in the Member's Employee Contributions Account,
Rollover Contribution Account or Prior Plan Account, plus
the sum of all contributions that have been credited to a
Member's Compensation Deferral Contributions Account to date
together with any Income allocable to such contributions as
of December 31, 1988.
(b) Age 59-1/2 Eligibility. After a Member attains
age 59-1/2 the entire balance in all of the Member's Ac-
counts.
9.2 Hardship Withdrawals.
(a) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed by the
Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets (in-
cluding those assets of the Member's spouse and minor
children that are reasonably available to the Member)
to the extent such liquidation will not itself cause
immediate and heavy financial need,
(iii) By ceasing Compensation Deferral Contribu-
tions under the Plan, or
(iv) By other distributions or nontaxable (at the
time of the loan) loans from any plan maintained by the
Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
The Committee shall be entitled to rely on the Member's
statement of need without inquiry into the Member's financial
circumstances.
(b) Determination of Hardship. A withdrawal will be
deemed to be a hardship withdrawal if made on account of:
(i) Medical expenses incurred, or to be incurred,
by the Member, the Member's spouse, or any dependent,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
(iii) Payment of tuition for the next year,
semester or quarter of post-secondary education for the
Member, the Member's spouse or any dependent,
(iv) The need to prevent the eviction of the
Member from the Member's principal residence or fore-
closure on the mortgage of the Member's principal
residence,
(v) Such other immediate and heavy financial need
as the Commissioner of Internal Revenue may from time
to time publish by revenue rulings, notices and other
documents of general applicability, or
(vi) Any other immediate and heavy financial need
as determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the re-
quirements of the Code and the applicable regulations
and in accordance with the following standards and
principles:
(A) the need shall be due to an extra-ordi-
nary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of hard-
ship as commonly understood such as financial
expenses and not for entertainment or pleasure,
and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
9.3 Values. All withdrawals under Sections 9.1 or 9.2
shall be based on the values of Accounts as of the Valuation Date
next following the date that the Appropriate Notice was given to
the Committee, or such other Valuation Date as the Committee
shall prescribe. Any withdrawal from any Account (or Subaccount
thereof) under Sections 9.1 and 9.2 shall be charged proportion-
ately against each Investment Fund described in Article VIII
(other than the Self-Directed Window) in which such Account is
invested.
9.4 Payment of Withdrawals. Any amount withdrawn under
Section 9.1 shall be paid to a Member in a lump sum in cash, as
soon as practicable after the Valuation Date as of which the
withdrawal election is effective provided, however, that at the
Member's request whole numbers of Employer Securities contained
in the Member's Account may be distributed in kind.
9.5 Loans. A Member who is a "party in interest" as
defined in Section 3(14) of ERISA (a "Party in Interest") may
borrow for any purpose from his or her Employee Contributions
Account, Compensation Deferral Contributions Account, Prior Plan
Account, if any, and Rollover Contribution Account, to the extent
invested in Core Funds, in increments of not less than $1,000
once in any twelve-month period an amount (inclusive of current
loans) of up to one half of the total of such accounts, but in
any event not more than $50,000 reduced by the excess (if any) of
the highest balance of existing loans during the preceding 12
months over the current loan.
For the purposes of the foregoing, any outstanding
balance of an existing loan shall be aggregated with any addi-
tional funds being borrowed in order to calculate a Member's
borrowing limit. Transactions for additional funds shall be
booked and documented at then current interest rates as a new
loan.
All loans shall be made pursuant to such other procedures
and terms as shall be adopted by the Committee, subject to the
following:
(a) A loan may remain outstanding so long as the
borrower remains a Party in Interest and shall be repayable
within five years from the date of borrowing upon such terms
as may be determined by the Committee; provided, however,
that any loan of more than $15,000 used to acquire the
primary residence of a Member shall be repayable over a
period of up to ten years as determined by the Committee. A
Member may have no more than one primary residence loan and
one loan for any other purpose outstanding at any time.
The Committee may in its absolute discretion grant such
loan in accordance with such uniform and nondiscriminatory
rules as it may from time to time establish. Any such loan
shall be made at a then prevailing commercial rate of inter-
est for similar credits on such terms of repayment (in level
payments not less frequent than monthly) and subject to such
rules and restrictions as the Committee shall determine,
provided that any such loans shall be available to all
Members on a reasonably equivalent basis and that any loan
may be repaid at any time without penalty.
All Member loans shall be secured on a dollar for dollar
basis by up to 50% of the balance of the Accounts from which
the loan is made. To the extent a loan is unpaid, it shall
be deducted from the amount payable to such Member or such
Member's beneficiary at the time of distribution of the
Accounts from which the loan was made;
(b) In the event that a Member fails to repay a loan
according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Member's Accounts for which
a distributable event has occurred. In the event of fore-
closure, a distributable event shall be deemed to occur
immediately following the next Valuation Date for any por-
tion of an Account with respect to which the Member or the
Member's Beneficiary would be permitted in accordance with
Sections 9.1 or 10.1 to elect an immediate distribution;
(c) The receivable representing the loan (and other
loans to the same Member) will be accounted for by the
Trustee as a separate earmarked investment solely for the
individual account of the Member. A Member's payments to
the Trust of principal and interest on the loan shall be
invested by the Trustee as elected by the Member in accor-
dance with the Member's investment directions for future
contributions in accordance with Section 8.2, as soon as
reasonably practical;
(d) Loan applications may be made at any time by any
Member by giving the Appropriate Notice to the Committee or
its designee at any time.
(e) No loan shall remain outstanding after a Member is
no longer a Party in Interest. If a Member who is no longer
a Party in Interest elects under Section 10.7 not to file a
claim for the commencement of benefits when the Member's
employment is terminated, the balance of any outstanding
loan must be repaid in full within sixty (60) days.
(f) Loan Origination Fee. From time to time the
Committee may set a reasonable loan origination fee for each
loan application. Such fees shall be deducted from loan
proceeds paid to loan applicants.
ARTICLE X
Distribution
10.1 Amount of Distribution. The Member or the Member's
beneficiary, as the case may be, shall not be entitled to elect
to receive a distribution of the vested value of the Member's
account until:
(a) the Member's attainment of age 59 1/2, Retirement,
termination of employment, death or Permanent Disability, or
(b) termination of the Plan without establishment or main-
tenance of a successor plan, or
(c) the date of sale of substantially all of the assets of
the Employer to an acquiring corporation which continues the
employment of the Member without the establishment of a
successor plan.
The vested value of the Member's Account shall be determined
as of the Valuation Date next following such distribution events
except that in the case of the Member's Total and Permanent
Disability the vested value of the Member's account shall be
determined as of the Valuation Date next following the date the
Committee determines that the Member has a Total and Permanent
Disability. In any event, such Valuation Date shall be no later
than the Valuation Date which immediately precedes the Member's
Required Beginning Date (or the date which would have been the
Member's Required beginning Date had the Member survived).
Distributions under the Plan to a Member's Beneficiary shall be
completed not more than five years after the Member's death.
10.2 Notice of Options and Normal Form of Distribution.
(a) Notice of Options.
(i) No less than thirty (30) nor more than ninety
(90) days prior to the date of any distribution hereunder
the Plan Administrator shall provide the Member with a
general description of the material features and an explana-
tion of the relative values of the optional forms of bene-
fits available under the Plan.
(ii) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribu-
tion may commence less than thirty (30) days after the
notice required under Reg. Section 1.411(a)-11(c) is given,
provided that:
(A) the Plan Administrator clearly informs the Member
that the Member has a right to a period of at least
thirty (30) days after receiving the notice to consider
the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option),
and
(B) the Member, after receiving the notice,
affirmatively elects a distribution.
(iii) If the distribution is one to which sections
401(a)(11) and 417 of the Code do apply such distributions
may commence less than thirty (30) days after the notice
required by Section 10.8 provided that:
(A) The Plan Administrator clearly inform the Member
that the Member has a right to at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity
and consent to a form of distribution other than a Qualified
Joint and Survivor Annuity;
(B) the Member, after receiving the notice, affirma-
tively elects (with spousal consent) to waive the Qualified
Joint and Survivor Annuity; and,
(C) Distribution in accordance with the affirmative
election does not commence before the expiration of the 7-day period
that begins the day after the explanation of the
Qualified Joint and Survivor Annuity is provided to the
participant.
(b) Normal Form of Distribution. Unless otherwise
elected in accordance with Section 10.3 and subject to
Section 10.7, distributions shall be made by the Trustee as
soon as practicable after the Valuation Date next following
the Member's (or the Member's Beneficiary's as the case may
be) election and written consent to receive a distribution
of the vested value of such Member's Account, in a single
sum in cash except that (i) at the Member's option Employer
Securities held in the Member's Account may be distributed
in kind and (ii) in the discretion of the Committee, a note
with respect to a Member's loan from such Member's Compensation
Deferral Account may be distributed in kind.
10.3 Alternate Form of Distribution. A Member may request
to have the value of such Member's Accounts distributed in a
manner other than in accordance with Section 10.2. For any
portion of such Member's benefits accrued before May 1, 1995 that
become distributable under the Plan after May 1, 1995 such
alternate form of payment may be an annuity contract pursuant to
Section 10.8 or periodic installments of all benefits commencing
at such time as the Member shall elect in accordance with the
Plan payable over a fixed period not to exceed the lesser of ten
years or the life expectancy of the Member at the time payments
commence. Payment of any interest in the Company Stock Fund in a
Member's Accounts, if any, to which the Member has a nonforfeit-
able interest may be made in cash solely for the purpose of
effecting such an alternate form of distribution.
Distributions will be made in accordance with the require-
ments of the regulations under Code Section 401(a)(9), including
the minimum distribution incidental benefit requirements of
Proposed Regulations Section 1.401(a)(9)-2. Such minimum distri-
bution requirements shall supersede any distribution options in
the Plan that are inconsistent therewith.
10.4 Identity of Payee. The determination of the Committee
as to the identity of the proper payee of any benefit under the
Plan and the amount of such benefit properly payable shall be
conclusive, and payment in accordance with such determination
shall constitute a complete discharge of all obligations on
account of such benefit.
10.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this
Plan shall be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment, or
other legal processes, or encumbrance of any kind. Any
attempt to alienate, sell, transfer, assign pledge or
otherwise encumber any such benefits, whether currently
or thereafter payable, shall be void. No benefit, nor
any fund which may be established for the payment of
such benefits, shall, in any manner, be liable for or
subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge
or otherwise encumber benefits to which such person may
become entitled under this Plan, or if by reason of
such person's bankruptcy or other event happening at
any time, such benefits would devolve upon any other
person or would not be enjoyed by the person entitled
thereto under the Plan, then the Committee, in its
discretion, may terminate the interest in any such
benefits of the person entitled thereto under the Plan
and hold or apply them to or for the benefit of such
person entitled thereto under the Plan or such person's
spouse, children or other dependents, or any of them,
in such manner as the Committee may deem proper.
(b) Notwithstanding Section 10.5(a), the Trustee
(i) shall comply with an order entered on or
after January 1, 1985, determined by the Committee to
be a Qualified Domestic Relations Order as provided in
Section 10.6 and
(ii) may treat an order entered before January 1,
1985, as a Qualified Domestic Relations Order even if
it does not meet the requirements of Section 10.6.
(iii) shall comply with a Federal tax levy made
pursuant to Code Section 6331 and with collection
proceedings by the United States on a judgment result-
ing from an unpaid tax assessment.
10.6 Qualified Domestic Relations Order.
(a) The Plan shall comply with the provisions of Code
Section 414(p) relating to qualified domestic relations
orders and all regulations pertaining thereto.
(b) An alternate payee's interest in the Plan will be
distributed in the form of a single sum as soon as practica-
ble after a proposed order is determined to be a qualified
domestic relations order.
10.7 Commencement of Benefits. Unless a Member elects
otherwise, the payment of benefits under the Plan shall begin not
later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Member attains age 65;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an
Affiliate is terminated.
provided that, except as provided in Section 10.10, no benefits
shall be distributed unless the Member has filed a claim for
benefits until the Valuation Date immediately preceding the
Required Beginning Date and further provided that benefits shall
commence to be distributed to the Member not later than the
Member's Required Beginning Date.
10.8 Annuities. If the form of distribution is to be an
annuity contract, it may be in such form and with such provisions
as the Member or the Member's Beneficiary, as the case may be,
may elect which are available for purchase from an insurance
company including, but not limited to, a full cash refund life
annuity, an annuity with income for life or an annuity with
income for a period certain (payable at least annually). Such
distribution is to be provided through the purchase from an
insurance company and distribution from the Trust Fund of a
nontransferable annuity contract; provided the benefit under such
annuity contract cannot be paid to anyone other than the Member
prior to the Member's death, and if a joint and survivor annuity
is provided, unless such joint annuitant shall be the Member's
spouse, the actuarial value of the Member's benefits, as of the
date benefit payments commence, shall be more than 50 percent
(50%) of the Member's vested Accounts.
(a) Limitation on Member Elections.
Notwithstanding any elections made by the Member,
benefit payments shall be made over a period not in
excess of the life of the Member or the lives of the
Member and the Member's Beneficiary or the Member's
life expectancy or the joint and last survivor life
expectancy of the Member and the Member's Beneficiary.
In the event the annuity benefits have commenced to be
paid to a Member before the Member's death the remain-
ing interest will be distributed at least as rapidly as
under the election made by the Member prior to the date
of death.
(b) Qualified Joint and Survivor Annuities.
Notwithstanding the foregoing provisions of this Sec-
tion 10.8, in the case of a Member who has elected to
receive an annuity form of benefit, distribution shall
be in the form of a Qualified Joint and Survivor Annu-
ity, unless the Member with the Member's spouse's con-
sent as provided in Section 10.9 elects to receive a
different form of annuity. The term "Qualified Joint
and Survivor Annuity" means an annuity payable to the
Member for life and, if the Member's spouse survives
the Member, a survivor annuity payable to the spouse
for life in an amount equal to 50 percent (50%) of the
annuity payable to the Member. If the Member who has
elected to receive an annuity form of benefit is not
married, subject to Section 10.6 (Qualified Domestic
Relations Order), the annuity shall be paid in the form
of a single life annuity unless the Member waives the
single life annuity. The amount of the benefits pay-
able under a Qualified Joint and Survivor Annuity shall
be the amount which can be purchased from an insurance
company with the Member' Accounts.
(c) A Member who elects to receive benefits in
the form of a life annuity and to whom benefits would
be payable in the form of a Qualified Joint and Survi-
vor Annuity pursuant to this Section 10.8 shall have
the right to waive a Qualified Joint and Survivor Annu-
ity, such waiver shall be consented to by the Member's
spouse in writing in accordance with Section 10.9 by
delivering written notice to the Committee, at any time
within the 90-day period prior to the annuity starting
date, to receive a different form of an annuity, the
Committee shall within a reasonable period of time
provide the Member, by personal delivery or first class
mail, with a written explanation of:
(i) the terms and conditions of the Quali-
fied Joint and Survivor Annuity;
(ii) the Member's right to make, and
the effect of, an election to waive the Qual-
ified Joint and Survivor Annuity;
(iii) the rights of the Member's spouse
to consent to the Member's election to waive
the Qualified Joint and Survivor Annuity and
the effect of consenting to such waiver; and
(iv) the Member's right to make, and
the effect of, a revocation of an election to
waive the Qualified Joint and Survivor Annu-
ity.
Any election made by a Member pursuant to Sections 10.8(b)
and 10.8(c) may be revoked by such Member by delivering written
notice to the Committee at any time prior to the Member's annuity
starting date and, once revoked, may be made again at any time by
delivering written notice to the Committee prior to the Member's
annuity starting date.
10.9 Spousal Consent. A valid spousal consent to the
Member's naming of a Beneficiary other than the Member's spouse
or to the Member's waiver of a Qualified Joint and Survivor
Annuity as defined in Section 10.8(b) shall be designated:
(a) in a writing acknowledging the effect of the
consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises
the consent;
provided that, notwithstanding the provisions of this Article X,
the consent of a Member's spouse shall not be required if it is
established to the satisfaction of the Plan Administrator that
such consent may not be obtained because there is no spouse,
because the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe.
10.10 Payments Without Election. Notwithstanding any other
provision of this Article X:
(a) If a Member or a Beneficiary is entitled to a distribu-
tion and if the vested value of a Member's Account or
the vested value of the Beneficiary's share of the
Member's Account before benefits are paid or commence
to be paid hereunder does not exceed (and at the time
of any previous distribution did not exceed) $3,500
($5,000 after January 1, 1998), the Committee may in
accordance with uniform and nondiscriminatory rules
direct the immediate distribution of such benefit in a
single lump sum to the person entitled thereto regard-
less of any election or consent of the Member, the
Member's spouse or other Beneficiary, or
(b) If a Member has reached Normal Retirement Age and has
terminated his or her employment, the Committee may
direct the immediate distribution of the Member's
benefits as such Member may elect after notice given in
accordance with Section 10.2 (the "Notice"), which
distribution shall commence as soon as administratively
possible following the later of:
(i) 90 days after the Member's termination date, or
(ii) the last business day of November of the year in
which the Member becomes (or would have become)
70 1/2 years of age;
10.11. Trustee to Trustee Transfers.
(a) A Member who receives an Eligible Rollover
Distribution after December 31, 1992 may elect to have such
distribution paid directly to an Eligible Retirement Plan by
specifying in the Appropriate Notice the Eligible Retirement
Plan to which such distribution is to be paid in a direct
trustee to trustee transfer pursuant to such uniform rules
as to the form and time of transfer as the Committee shall
prescribe.
(b)(i) "Eligible Rollover Distribution." An Eligible
Rollover Distribution is any distribution of all or a por-
tion of the balance to the credit of the Member distributee,
except that an Eligible Rollover Distribution does not
include: any distribution that is one of a series of sub-
stantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
Member distributee or the joint lives (or joint life expec-
tancies) of the Member distributee and the Member's desig-
nated beneficiary, or for a specified period of ten years or
more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the por-
tion of any distribution that is not includible in gross
income ( determined without regard to the exclusion for net
unrealized appreciation with respect to Employer Securi-
ties).
(b)(ii) "Eligible Retirement Plan." An Eligible Retirement
Plan is an individual retirement account de-
scribed in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the
Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section
401(a) of the Code, that accepts the Member distribute-
e's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the sur-
viving spouse of a Member, an Eligible Retirement Plan
is an individual retirement account or an individual
retirement annuity.
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. The Committee shall be the Plan
Administrator:
(a) The Committee shall administer, enforce and
interpret the Plan and the trust agreement established
hereunder and shall have the powers necessary thereto,
including but not by way of limitation the powers to exer-
cise its responsibilities in accordance with Sections 1.3
(Appropriate Notice), 1.9 (Compensation), 1.21 (Enrollment
Date), 1.29 (Leave of Absence), 1.42 (Total and Permanent
Disability), Article II (Eligibility and Membership) 3.1
(Compensation Deferral Contributions), 3.2 (Changes and
Suspension of Contributions), 4.1 (Limitations), 6.1 (Main-
tenance of Accounts), 6.2 (Valuations), Article VIII (In-
vestment of Accounts), Article IX (Withdrawals and Loans
During Employment), 12.6 (Disbursement of Funds), Article
XIV (Miscellaneous), and the remainder of this Article XI,
and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 12.2
(Trustee), and
(c) Authority to direct the investment of the Plan's
funds shall be delegated to an Investment Manager in accor-
dance with Section 12.3 (Investment Manager).
With respect to all other responsibilities of the Plan
Administrator the Committee shall act through its duly authorized
officers and agents.
11.2 Board of Directors. With respect to Sections 11.8
(Personal Liability), 13.1 (Right to Amend) and 13.2 (Suspension
or Termination) the Employer shall act only by or pursuant to, a
resolution of the Board of Directors.
11.3 Appointment of the Committee. The Committee shall be
the Benefits Administration Committee.
11.4 Compensation, Expenses. All proper expenses required
for the administration of the Plan incurred by the Committee, the
Employer, an Investment Manager or the Trustee for accounting,
legal and other professional, consulting or technical services,
including fees and expenses of a record keeper, the Trustee or
any Investment Manager shall be paid by the Trust.
11.5 Committee Actions, Agents. The Committee may appoint
such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties and
may delegate to such agents such powers and duties as the Commit-
tee may deem expedient or appropriate.
Any action of the Committee, including but not by way of
limitation, instructions to the Trustee, shall be evidenced by
the signature of a member who has been so authorized by the
Committee to sign for it, and the Trustee shall be fully protect-
ed in acting thereon. A certificate of the secretary or an
assistant secretary of the Committee setting forth the name of
the members thereof shall be sufficient evidence at all times as
to the persons then constituting the Committee.
11.6 Committee Meetings. The Committee shall hold meetings
upon such notice, at such time and place as they may determine.
The Committee shall act by a majority of its members at the time
in office and such action may be taken from time to time by a
vote at a meeting or in writing without a meeting. A majority of
the members of the Committee at the time in office shall consti-
tute a quorum for the transaction of business.
11.7 Authority and Duties of the Committee. The Committee
may from time to time establish rules for the administration of
the Plan. The Committee shall have the exclusive right to
interpret the Plan and to decide any matters arising thereunder
in connection with the administration of the Plan. It shall
endeavor to act by general rules so as not to discriminate in
favor of any person. Its decisions and the records of the
Committee shall be conclusive and binding upon the Employer,
Members and all other persons having an interest under the Plan.
No member of the Committee shall be disqualified from exercising
the powers and discretion herein conferred by reason of the fact
that the exercise of any such power or discretion may affect the
payment of benefits to such member under the Plan; however, no
member may vote on a matter relating exclusively to such member.
To the extent that it is administratively feasible, the period of
notice required for Members' elections to commence, change or
suspend contributions hereunder or to make or change investment
elections for either future contributions or existing accounts
may be relaxed, reduced or eliminated by the Committee in accor-
dance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all records and
other data as may be necessary for the administration of the
Plan.
11.8 Personal Liability. To the extent not contrary to the
provisions of ERISA, no member of the Committee, officer, direc-
tor or employee of an Employer shall be personally liable for
acts done in good faith hereunder unless resulting from such
member's own negligence or willful misconduct. Each such member
of the Committee, officer and director shall be indemnified by
the Employer against expenses reasonably incurred by such member
in connection with any action to which he may be a party by
reason of such member's responsibilities hereunder, except in
relation to matters as to which such member shall be adjudged in
such action to be liable for negligence or misconduct in the
performance of such member's duty. However, nothing in this Plan
shall be deemed to relieve any person who is a fiduciary under
the Plan for purposes of ERISA from any responsibility or liabil-
ity which such Act shall impose upon such member.
11.9 Dealings Between the Committee and Individual Members.
Any notice required to be given to, or any document required to
be filed with, the Committee will be properly given or filed if
mailed by registered or certified mail, postage prepaid, or
delivered to the Chairman of the Benefits Administration Commit-
tee, c/o U.S. Industries, Inc. 101 Wood Avenue South, Iselin, New
Jersey 08830, or to such other place as the Committee may hereaf-
ter from time to time designate.
The Committee shall make available to such Member for
examination, such of its records as pertain to the benefits to
which such Member shall be entitled under the Plan.
11.10 Information To Be Supplied by the Employer. The
Employer shall provide the Committee or its delegate with such
information as it shall from time to time need in the discharge
of its duties.
11.11 Records. The regularly kept records of the Committee
and the Employer shall be conclusive evidence of the Credited
Service and Service of an Employee, the Employee's Compensation,
age, marital status, status as an Employee, and all other matters
contained therein applicable to this Plan; provided that an
Employee may request a correction in the record of age or any
other disputed fact at any time prior to retirement. Such
correction shall be made if within 90 days after such request the
Employee furnishes the Committee in support thereof documentary
proof of age or the other disputed fact satisfactory to the
Committee.
11.12 Fiduciary Capacity. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the
Plan.
11.13 Fiduciary Responsibility. If a Plan fiduciary acts
in accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that a Member's spouse has consent-
ed to the naming of a Beneficiary other than the spouse or
that the consent of the Member's spouse may not be obtained
because there is no spouse, the spouse cannot be located or
other circumstances prescribed by the Secretary of the
Treasury by regulations, then to the extent of payments made
pursuant to such consent, revocation or determination, the
Plan and its fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or,
during any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in separately accounting for
the amounts which would have been payable to the alternate
payee during such period if the order had been determined to
be a Qualified Domestic Relations Order, in paying the
amounts separately accounted for to the person entitled
thereto if within 18 months the domestic relations order (or
a modification thereof) is determined to be a Qualified
Domestic Relations Order, in paying such amounts to the
person entitled thereto if there had been no order if within
18 months the domestic relations order is determined not to
be qualified or if the issue is not resolved within 18
months and in prospectively applying a domestic relations
order which is determined to be qualified after the close of
the 18-month period, then the obligation of the Plan and its
fiduciaries to the Member and each alternate payee shall be
discharged to the extent of any payment made pursuant to
such acts.
11.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit
an application for benefits ("Claims") to the Committee or
to such other person as may be designated by the Committee
in writing in such form as is provided or approved by the
Committee. A Claimant shall have no right to seek review of
a denial of benefits, or to bring any action in any court to
enforce a Claim prior to filing a Claim and exhausting all
rights to review in accordance with this Section.
When a Claim has been filed properly, such Claim
shall be evaluated and the Claimant shall be notified
of the approval or the denial of the Claim within
ninety (90) days after the receipt of such Claim unless
special circumstances require an extension of time for
processing the claim. If such an extension of time for
processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termi-
nation of the initial ninety (90) day period, which
notice shall specify the special circumstances requir-
ing an extension and the date by which a final decision
will be reached (which date shall not be later than one
hundred and eighty (180) days after the date on which
the Claim was filed). A Claimant shall be given a
written notice in which the Claimant shall be advised
as to whether the Claim is granted or denied, in whole
or in part. If a Claim is denied, in whole or in part,
the notice shall contain (1) the specific reasons for
the denial, (2) references to pertinent Plan provisions
upon which the denial is based, (3) a description of
any additional material or information necessary to
perfect the Claim and an explanation of why such mate-
rial or information is necessary, and (4) the
Claimant's rights to seek review of the denial.
(b) If a Claim is denied, in whole or in part, the Claimant shall
have the right to (i) request that the
Committee (or such other person as shall be designated
in writing by the Committee) review the denial, (ii)
review pertinent documents, and (iii) submit issues and
comments in writing, provided that the Claimant files a
written request for review with the Committee within
sixty (60) days after the date on which the Claimant
received written notification of the denial. Within
sixty (60) days after a request for review is received,
the review shall be made and the Claimant shall be
advised in writing of the decision on review, unless
special circumstances require an extension of time for
processing the review, in which case the Claimant shall
be given a written notification within such initial
sixty (60) day period specifying the reasons for the
extension and when such review shall be completed
within one hundred and twenty (120) days after the date
on which the request for review was filed. The deci-
sion on review shall be forwarded to the Claimant in
writing and shall include specific reasons for the
decision and references to Plan provisions upon which
the decision is based. A decision on review shall be
final and binding on all persons for all purposes. If
a Claimant shall fail to file a request for review in
accordance with the procedures herein outlined, such
Claimant shall have no rights to review and shall have
the right to bring action in any court and the denial of
the Claim shall become final and binding on all persons
for all purposes.
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund. All assets of the Plan shall be held in
trust as a Trust Fund for the exclusive benefit of Members and
their Beneficiaries, and no part of the corpus or income shall be
used for or diverted to any other purpose. No person shall have
any interest in or right to any part of the Trust Fund, except to
the extent provided in the Plan.
12.2 Trustee. All contributions to the Plan shall be paid
to a Trustee or Trustees which shall be appointed from time to
time by the Company by appropriate instrument with such powers in
the Trustee as to control and disbursement of the funds as the
Company shall approve and as shall be in accordance with the
Plan. The Company may remove any Trustee at any time, upon
reasonable notice and upon such removal or upon the resignation
of any Trustee the Company shall designate a successor Trustee.
12.3 Investment Manager. In accordance with the terms of
the trust agreement, the Company may appoint one or more Invest-
ment Managers (individuals and/or other entities), who may
include the Trustee and who are collectively referred to herein
as the Investment Manager, to direct the investment and reinvest-
ment of part or all of the Plan's funds that are not invested in
Employer Securities. The Company may change the appointment of
the Investment Manager from time to time.
12.4 Purchase and Holding of Securities. As soon as
convenient after receiving contributions, the Trustee shall:
(a) in the case of contributions which are to be in-
vested in Employer Securities purchase Employer Securities
in the open market, and register and hold such securities in
the name of the Trustee or its nominee;
(b) in the case of contributions which are to be
invested in the Fixed Income Fund, purchase group annuity
contracts or make other investment arrangements that in the
aggregate will provide the target rate of return; and,
(c) In the case of any of the managed funds listed in
Section 8.1 (c) through (j), purchase and hold shares in
such funds in accordance with the directions of Plan Mem-
bers.
12.5 Voting of Employer Securities. For shareholders'
meetings Members shall be furnished proxy material and a form for
instructing the Trustee how to vote the Employer Securities
represented by units credited to their Accounts, and the Trustee
shall vote or otherwise exercise shareholder rights with respect
to such Employer Securities as instructed. The Trustee shall
hold such instructions in confidence and shall not divulge them
to anyone, including, but not limited to, the Employer, its
officers or employees.
Shares for which no instructions are received shall be
voted by the Trustee in the same proportion as those shares for
which instructions have been received. With respect to the
exercise of shareholder's rights to sell or retain the Employer
Securities represented by units credited to a Member's Accounts
in extraordinary instances involving an unusual price and terms
and conditions for such securities such as a tender offer, the
Trustee shall act in accordance with the Committee's instruc-
tions.
12.6 Disbursement of Funds. The funds held by the Trustee
shall be applied, in the manner determined by the Committee, to
the payment of benefits to such persons as are entitled thereto
in accordance with the Plan.
The Committee shall determine the manner in which the funds
of the Plan shall be disbursed in accordance with the Plan,
including the form of voucher or warrant to be used in authoriz-
ing disbursements and the qualification of persons authorized to
approve and sign the same and any other matters incident to the
disbursement of such funds.
12.7 Exclusive Benefit of Members. All contributions under
the Plan shall be paid to the Trustee and deposited in the Trust
Fund and shall be held, managed and distributed solely in the
interest of the Members and beneficiaries for the exclusive
purpose of (1) providing benefits to Members and beneficiaries
and (2) defraying reasonable administrative expenses of the Plan
and the Trust, to the extent such expenses are not paid by the
Company or an Affiliate provided that:
(a) if a timely determination letter request is filed and
the Plan is denied initial qualification under Section
401(a) of the Code, contributions conditioned upon such
qualification shall be returned to the Company or the Affil-
iate making such contributions within one year of the denial
of qualification;
(b) if, and to the extent, a deduction for a contribution
under Section 404 of the Code is disallowed, contributions
conditioned upon deductibility shall be returned to the
Company or the Affiliate making such contribution within one
year after the disallowance of the deduction; and
(c) if, and to the extent, a contribution is made through a
good faith mistake of fact, such contribution shall be
returned to the Company or the Affiliate making such contri-
bution within one year.
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. The right to modify or amend the
provisions of the Plan in whole or in part at any time or from
time to time is reserved to the Company, but no such amendment
shall divest any Member of any amount previously credited to a
Member's Accounts or, except to the extent permitted by the
Secretary of the Treasury by regulation, shall eliminate with
respect to a Member's Account balance at the time of such amend-
ment an optional form of benefit, and further provided that no
part of the assets of the Trust Fund shall, by reason of any
modification or amendment, be used for or diverted to, purposes
other than for the exclusive benefit of Members and their Benefi-
ciaries, under the Plan.
13.2 Suspension or Termination. The Employer may at any
time suspend Compensation Deferral Contributions in whole or in
part. The suspension of Compensation Deferral Contributions
shall not in itself constitute a termination of the Plan. The
Employer may at any time terminate or discontinue the Plan by
filing with the Committee a certified copy of the resolution of
its board of directors authorizing the termination or discontinu-
ance.
If the Plan is terminated, no further contributions shall be
made by the Employer and the Account of each Member shall be
applied for the Member's (or the Member's Beneficiary's) benefit
either by payment in cash or in kind, or by the continuation of
the Trust Fund in accordance with the trust instrument and the
provisions of the Plan as though the Plan were otherwise in full
force and effect.
13.3 Merger, Consolidation of Transfer. In the case of any
merger, or consolidation with, or transfer of assets or liabili-
ties to any other plan, each Member in the Plan would (if the
Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before the merger consolidation, or transfer (if the
Plan had then terminated).
EXHIBIT 4.4(d)
THE AMES GROUP RETIREMENT SAVINGS & INVESTMENT PLAN
FOR EMPLOYEES REPRESENTED BY USAW LOCAL 7958
(Effective January 1, 1998)<PAGE>
TABLE OF CONTENTS
ARTICLE I
Definitions
1.1 "Account" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 "Appropriate Notice" . . . . . . . . . . . . . . . . . . 1
1.4 "Beneficiary" . . . . . . . . . . . . . . . . . . . . . . 1
1.5 "Board" or "Board of Directors" . . . . . . . . . . . . . 1
1.6 "Code". . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.7 "Committee" . . . . . . . . . . . . . . . . . . . . . . . 1
1.8 "Company" . . . . . . . . . . . . . . . . . . . . . . . . 1
1.9 "Compensation" . . . . . . . . . . . . . . . . . . . . . 1
1.10 "Compensation Deferral Contributions". . . . . . . . . . 2
1.11 "Compensation Deferral Contributions Account". . . . . . 2
1.12 "Effective Date" . . . . . . . . . . . . . . . . . . . . 2
1.13 "Eligible Employee". . . . . . . . . . . . . . . . . . . 2
1.14 "Employee" . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 "Employee Contributions" . . . . . . . . . . . . . . . . 2
1.16 "Employee Contributions Account" . . . . . . . . . . . . 3
1.17 "Employer" . . . . . . . . . . . . . . . . . . . . . . . 3
1.18 "Employer Securities". . . . . . . . . . . . . . . . . . 3
1.19 "Enrollment Date". . . . . . . . . . . . . . . . . . . . 3
1.20 "Enrollment Period". . . . . . . . . . . . . . . . . . . 3
1.21 "ERISA". . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 "Hour of Service". . . . . . . . . . . . . . . . . . . . 3
1.23 "Initial Enrollment Date". . . . . . . . . . . . . . . . 4
1.24 "Investment Fund". . . . . . . . . . . . . . . . . . . . 4
1.25 "Investment Manager" . . . . . . . . . . . . . . . . . . 4
1.26 "Leased Employee". . . . . . . . . . . . . . . . . . . . 4
1.27 "Leave of Absence" . . . . . . . . . . . . . . . . . . . 4
1.28 "Member" . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 "Parental Leave" . . . . . . . . . . . . . . . . . . . . 5
1.30 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 "Plan Year". . . . . . . . . . . . . . . . . . . . . . . 5
1.32 "Prior Plan" . . . . . . . . . . . . . . . . . . . . . . 5
1.33 "Prior Plan Account" . . . . . . . . . . . . . . . . . . 6
1.34 "Required Beginning Date". . . . . . . . . . . . . . . . 6
1.35 "Retirement" . . . . . . . . . . . . . . . . . . . . . . 6
1.36 "Rollover Contribution". . . . . . . . . . . . . . . . . 6
1.37 "Rollover Contribution Account". . . . . . . . . . . . . 6
1.38 "Service". . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 "Suspense Account" . . . . . . . . . . . . . . . . . . . 6
1.40 "Total and Permanent Disability" . . . . . . . . . . . . 6
1.41 "Trustee". . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 "Trust Fund" . . . . . . . . . . . . . . . . . . . . . . 7
1.43 "Valuation Date" . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. . . . . . . . . . . . . . . . . . 7
2.2 Eligible Employees on and after the Effective Date. . . . 7
2.3 Completion of Appropriate Notice. . . . . . . . . . . . . 7
2.4 Elections Upon Becoming A Member. . . . . . . . . . . . . 7
2.5 Beneficiary Designation.. . . . . . . . . . . . . . . . . 8
2.6 Transfers to or from Non-Covered Status.. . . . . . . . . 8
2.7 Rollover Contributions From Other Plans.. . . . . . . . . 8
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions.. . . . . . . . . . . 9
3.2 Changes and Suspension of Contributions.. . . . . . . . . 10
3.3 Transfer of Contributions to Trustee. . . . . . . . . . . 10
ARTICLE IV
Limitations on, and Distribution of,
Excess Compensation Deferral
Contributions of Highly Compensated
Employees
4.1 Limitations.. . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Control of Contributions and Distribution of Excess.. . . 12
4.3 Limitation of Annual Additions. . . . . . . . . . . . . . 13
ARTICLE V
Miscellaneous
5.1 Uniform Administration. . . . . . . . . . . . . . . . . . 15
5.2 Payment Due an Incompetent. . . . . . . . . . . . . . . . 15
5.3 Source of Payments. . . . . . . . . . . . . . . . . . . . 16
5.4 Plan Not a Contract of Employment.. . . . . . . . . . . . 16
5.5 Applicable Law. . . . . . . . . . . . . . . . . . . . . . 16
5.6 Unclaimed Amounts.. . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI
Accounts
6.1 Maintenance of Accounts.. . . . . . . . . . . . . . . . . 16
6.2 Valuations. . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII
Vesting of Accounts
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts .. . . . . . . . . . . . . . . . . 17
8.2 Redirection of Future Contributions.. . . . . . . . . . . 19
8.3 Reinvestment of Prior Contributions.. . . . . . . . . . . 19
8.4 Statements of Accounts And Confirmation of Investment
Directions. . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Crediting of Accounts.. . . . . . . . . . . . . . . . . . 20
8.6 Correction of Errors. . . . . . . . . . . . . . . . . . . 21
8.7 Investment of Deferred Distributions. . . . . . . . . . . 21
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. . . . . . . . . . . . . . . . . . . . 21
9.2 Hardship Withdrawals. . . . . . . . . . . . . . . . . . . 23
9.3 Values. . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.4 Payment of Withdrawals . . . . . . . . . . . . . . . . . 23
9.5 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE X
Distribution
10.1 Amount of Distribution.. . . . . . . . . . . . . . . . . 25
10.2 Notice of Options and Normal Form of Distribution. . . . 25
10.3 Alternate Form of Distribution.. . . . . . . . . . . . . 26
10.4 Identity of Payee. . . . . . . . . . . . . . . . . . . . 27
10.5 Non-alienation of Benefits.. . . . . . . . . . . . . . . 27
10.6 Qualified Domestic Relations Order.. . . . . . . . . . . 28
10.7 Commencement of Benefits.. . . . . . . . . . . . . . . . 28
10.8 Annuities. . . . . . . . . . . . . . . . . . . . . . . . 28
10.9 Spousal Consent. . . . . . . . . . . . . . . . . . . . . 30
10.10 Payment Without Election . . . . . . . . . . . . . . . 31
10.11 Trustee to Trustee Transfers . . . . . . . . . . . . . 31
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator.. . . . . . . . . . . . . . . . . . . 32
11.2 Board of Directors.. . . . . . . . . . . . . . . . . . . 33
11.3 Appointment of the Committee.. . . . . . . . . . . . . . 33
11.4 Compensation, Expenses.. . . . . . . . . . . . . . . . . 33
11.5 Committee Actions, Agents. . . . . . . . . . . . . . . . 33
11.6 Committee Meetings.. . . . . . . . . . . . . . . . . . . 33
11.7 Authority and Duties of the Committee. . . . . . . . . . 33
11.8 Personal Liability.. . . . . . . . . . . . . . . . . . . 34
11.9 Dealings Between the Committee and Individual
Members. . . . . . . . . . . . . . . . . . . . . . . . . 34
11.10 Information To Be Supplied by the Employer. . . . . . . 34
11.11 Records.. . . . . . . . . . . . . . . . . . . . . . . . 35
11.12 Fiduciary Capacity. . . . . . . . . . . . . . . . . . . 35
11.13 Fiduciary Responsibility. . . . . . . . . . . . . . . . 35
11.14 Claim Procedure.. . . . . . . . . . . . . . . . . . . . 35
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund.. . . . . . . . . . . . . . . . . . . . . . . 37
12.2 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 37
12.3 Investment Manager.. . . . . . . . . . . . . . . . . . . 37
12.4 Purchase and Holding of Securities.. . . . . . . . . . . 37
12.5 Voting of Employer Securities. . . . . . . . . . . . . . 38
12.6 Disbursement of Funds. . . . . . . . . . . . . . . . . . 38
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend.. . . . . . . . . . . . . . . . . . . . . 39
13.2 Suspension or Termination. . . . . . . . . . . . . . . . 39
13.3 Merger, Consolidation of Transfer. . . . . . . . . . . . 40
<PAGE>
ARTICLE I
Definitions
As used herein, unless otherwise defined or required by the
context, the following words and phrases shall have the meanings
indicated. Some of the words and phrases used in the Plan are
not defined in this Article I, but, for convenience are defined
as they are introduced into the text.
1.1 "Account" means a Member's Employee Contributions
Account, Compensation Deferral Contributions Account, Rollover
Contribution Account or Prior Plan Account as the context re-
quires.
1.2 "Affiliate" means any company which is related to the
Employer as a member of a controlled group of corporations in
accordance with Section 414(b) of the Code, as a trade or busi-
ness under common control in accordance with Section 414(c) of
the Code or members of an affiliated service group as defined
under Section 414(m) of the Code.
1.3 "Appropriate Notice" means the written form, electron-
ic procedure or other method prescribed by the Committee to
convey information for a particular purpose.
1.4 "Beneficiary" means the person or persons designated by
the Plan or by a Member under Section 2.5 (Beneficiary Designa-
tion) to receive benefits payable under the Plan as a result of
the Member's death.
1.5 "Board" or "Board of Directors" means the Board of
Directors of the Employer.
1.6 "Code" means the Internal Revenue Code of 1986, as
amended from time to time and references to sections thereof
shall be deemed to include any such sections as amended, modified
or renumbered.
1.7 "Committee" means the Benefits Administration Committee
appointed in accordance with Section 11.3 (Appointment
of Committee).
1.8 "Company" means the corporation that owns 100% of the
capital stock of the Employer or any person, firm, corporation or
partnership which may succeed to its business.
1.9 "Compensation" means with respect to a Plan Year, the
sum of the amount reported by the Employer to the Internal
Revenue Service on Form W-2 as the Member's compensation for such
calendar year, the amount of any Compensation Deferral Contribu-
tions made on such Member's behalf to the Plan and the amount, if
any, contributed to a cafeteria plan that is excluded from gross
income pursuant to Section 125 of the Code; but exclusive of
termination or severance pay, prizes, awards, grievance settle-
ments, overseas cost of living allowances, relocation allowances,
mortgage assistance, executive perquisites, stock options, and
such other extraordinary items or remuneration as the Committee
shall determine from time to time pursuant to such uniform and
nondiscriminatory rules as it shall adopt. On and after January
1, 1989 the Compensation of each Employee taken into account
under the Plan for any Plan Year shall not exceed $200,000 as
thereafter adjusted for inflation in accordance with Section
415(d) of the Code. For Plan Years beginning after 1993 the
Compensation of each Employee taken into account under the Plan
for any such Plan Year shall not exceed $150,000 as thereafter
adjusted for inflation in accordance with Section 401(a)(17)(B)
of the Code.
1.10 "Compensation Deferral Contributions" means contribu-
tions made by the Employer pursuant to an election by the Member
to reduce the cash compensation otherwise currently payable to
such Member by an equivalent amount, in accordance with the
provisions of Section 3.1 (Compensation Deferral Contributions).
1.11 "Compensation Deferral Contributions Account" means
the separate account maintained for a Member to record such
Member's share of the Trust Fund attributable to Compensation
Deferral Contributions made on such Member's behalf.
1.12 "Effective Date" means January 1, 1998, the date
that the Plan became effective.
1.13 "Eligible Employee" means an Employee of the O. Ames
Company handle plant in Kane, Pennsylvania who is employed on the
Effective Date or who (i) has attained age 21 and (ii) has
worked, at least 1,000 Hours of Service during a consecutive
twelve-month period and who is covered by a collective bargaining
agreement between the Employer and any union.
1.14 "Employee" means a person (but not including a person
acting only as a director) who is employed by the Employer.
Leased Employees shall also be treated as Employees for purposes
of this Plan unless: (i) such Leased Employees are covered by a
Plan described in Code Section 414(n)(5) and (ii) such Leased
Employees constitute less than Twenty Percent (20%) of the
Employer's non-highly compensated workforce as defined in Code
Section 414(n)(5)(c).
1.15 "Employee Contributions" means after tax contributions
that were made by a Member to a Prior Plan.
1.16 "Employee Contributions Account" means the separate
account maintained for a Member to record such Member's share of
the Trust Fund attributable to the Member's Employee Contribu-
tions.
1.17 "Employer" means The O. Ames Company.
1.18 "Employer Securities" means the Common Stock of
U.S. Industries, Inc., a Delaware Corporation.
1.19 "Enrollment Date" means the first day of each month in
the Plan Year.
1.20 "Enrollment Period" means the period commencing on an
Enrollment Date and ending on the next following Enrollment Date.
1.21 "ERISA" means Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
1.22 "Hour of Service" means each hour for which an Employ-
ee is paid, or entitled to payment, or receives earned income
from an Employer or an Affiliate:
(a) for performance of duties;
(b) on account of a period of time which no duties
were performed, provided that except in the case of a Leave
of Absence, no more than 501 Hours of Service shall be
credited for any single continuous period during which an
Employee performs no duty, and provided that no Hours of
Service shall be credited for periods of time in respect of
which an Employee receives severance pay or for payments
made or due under a plan maintained solely for the purpose
of complying with applicable workers' compensation, unem-
ployment compensation or disability insurance laws, or for
reimbursement of medical expenses; and
(c) for which back pay, irrespective of mitigation of
damages, is awarded or agreed to by the Employer provided
that Hours of Service credited under (a) or (b) shall not be
credited under (c).
Hours of Service credited to an Employee for the performance
of duties will be credited to the computation period in which the
duties are performed. The determination of Hours of Service for
reasons other than the performance of duties shall be made in
accordance with the provisions of Labor Department Regulations
Section 2530.200b-2(b), and Hours of Service shall be credited to
the computation periods to which the award or agreement pertains.
Except in the case of a Leave of Absence, not more than 501 Hours
of Service shall be credited for any continuous period during
which an Employee performs no duty or, in the case of service
required to be credited for payments of back pay awarded or
agreed to, for a period during which an employee did not or would
not have performed duties.
To the extent not credited above, during a Leave of Absence
an Employee shall be credited with a number of Hours of Service
for each week of such Leave of Absence equal to the Employee's
weekly average number of Hours of Service scheduled for the six-week
period immediately preceding such Leave of Absence.
In any case in which an individual becomes an Employee upon
the acquisition of all or a portion of the business of his or her
former employer by the Employer or an Affiliate, whether by
merger, acquisition of assets or stock, or otherwise, his or her
service with his or her predecessor employer shall be included in
determining his or her Hours of Service if, and to the extent
that, such service is required to be credited hereunder (A) by
section 414(a) of the Code and any regulations promulgated
thereunder, (B) by the terms of the agreement pursuant to which
the business of such former employer was acquired by the Employer
or an Affiliate, or (C) by vote of the Board of Directors.
1.23 "Initial Enrollment Date" means the earliest date
following the Effective Date set by the Committee for Eligible
Employees to apply to become Members of the Plan.
1.24 "Investment Fund" means the investment choices de-
scribed in Section 8.1 (Investment of Accounts).
1.25 "Investment Manager" means the individual and/or other
entity appointed in accordance with Section 12.3 (Investment
Manager) who has acknowledged in writing that such individual is
a fiduciary with respect to the Plan and who is:
(a) registered as an investment adviser under the
Investment Advisers Act of 1940, or
(b) a bank, as defined in such Act, or
(c) an insurance company qualified to manage,
assign or dispose of assets of pension plans.
1.26 "Leased Employee" shall mean any person who pursuant
to an agreement between the Employer and any other person has
performed services for the Employer or any related person as
defined in Code Section 414(n)(6) under the primary direction and
control of the Employer or such related person on a substantially
full time basis for a period of at least one year.
1.27 "Leave of Absence" means an absence or interruption of
service approved by the Committee under uniform and
nondiscriminatory rules and procedures. Members on leave of
absence for service in the Armed Forces of the United States,
however, shall be deemed to have been on Leave of Absence,
provided they return to service with an Employer within the
required time limitations set forth in the then applicable laws
governing reemployment rights of persons inducted, or who have
enlisted, in the Armed Forces.
1.28 "Member" means an Eligible Employee who has become a
member of the Plan in accordance with Article II (Eligibility and
Membership). Each Member shall continue to be such until the
later of the date such Member ceases to be an Eligible Employee
or such Member's Accounts have been completely distributed.
1.29 "Parental Leave" means a period not in excess of two
(2) years commencing after December 31, 1984 during which an
individual is absent from work for any period:
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the
individual,
(c) by reason of the placement of a child with
the individual in connection with the adoption of such
child by such individual, or
(d) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
An absence from work shall not be a Parental Leave unless the
Employee furnishes the Plan Administrator such timely information
as may reasonably be required to establish that the absence from
work was for one of the reasons specified in this Section 1.31
and the number of days for which there was such an absence.
Nothing contained herein shall be construed to establish an
Employer policy of treating a Parental Leave as a Leave of
Absence.
1.30 "Plan" means The Ames Group Retirement Savings &
Investment Plan for Employees Represented by USAW Local 7958 as
set forth herein or as amended from time to time.
1.31 "Plan Year" means the calendar year.
1.32 "Prior Plan" means an employee benefit plan qualified
under Section 401(a) of the Code all or part of the assets of
which are transferred to the Plan in a transaction which meets
the requirements of Regulation 1.414(l) of the Code.
1.33 "Prior Plan Account" means the separate account main-
tained for a Member to record such Member's share of the Trust
Fund attributable to employer contributions to the plans de-
scribed herein as Prior Plans.
1.34 "Required Beginning Date" means April 1 of the year
following the Plan Year in which occurs the later of the date
that the Member terminates employment or the date on which the
Member attains the age of 70-1/2 years.
1.35 "Retirement" means a Member's normal, early or de-
ferred retirement whichever shall apply to the Member under the
provisions of the Employer's pension plan applicable to such
Member, or the termination of employment of a Member on or after
such Member's attainment of age 65.
1.36 "Rollover Contribution" means an amount which is
transferred from another plan to this Plan, in accordance with
the provisions of Section 2.7 (Rollover Contribution From Other
Plans).
1.37 "Rollover Contribution Account" means the separate
Account maintained for a Member to record such Member's share of
the Trust Fund attributable to any Rollover Contribution made to
the Plan on his behalf.
1.38 "Service" means the period of employment beginning on
the first day the Eligible Employee performs duties for the
Employer or an Affiliate and ending on the day of quit, retire-
ment, discharge or death, two years after the commencement of
absence on account of Parental Leave, or one year after an
absence for any other reason. All prior periods of employment
with the Employer or an Affiliate, and breaks in employment of
less than one year shall be included in Service. If a break in
employment of not more than two years is on account of Parental
Leave not more than one year of Service shall be credited to an
Eligible Employee for a period of Parental Leave.
1.39 "Suspense Account" means the separate account main-
tained for a Member who had monies credited to such account
pursuant to Section 4.3 (Limitation of Annual Additions), re-
flecting the current dollar value of such credit.
1.40 "Total and Permanent Disability" means permanent
incapacity which results in a Member being unable to engage in
regular employment or occupation by reason of any medically
demonstrable physical or mental condition acceptable to the
Committee on a nondiscriminatory basis and which would entitle
the Member to benefits under the Employer's long-term disability
plan, if any, or to Social Security benefits as evidenced by a
disability award letter. However, no Member shall be deemed to
be disabled if such incapacity (a) resulted from or consists of
habitual drunkenness or addiction to narcotics, or (b) was in-
curred, suffered or occurred while the Member was engaged in, or
resulted from having engaged in, a criminal enterprise, or (c)
was intentionally self-inflicted.
1.41 "Trustee" means the corporate trustee appointed from
time to time by the Company to administer the Trust Fund in
accordance with Section 12.2 (Trustee).
1.42 "Trust Fund" means the trust fund established in
accordance with Section 12.1 (Trust Fund) from which benefits
provided under this Plan will be paid.
1.43 "Valuation Date" means the last business day of each
calendar month on which the New York Stock Exchange is open for
trading.
ARTICLE II
Eligibility and Membership
2.1 Members of Prior Plans. Each person who was a member
of a Prior Plan shall become a member of the Plan on the effec-
tive date of the transaction referred to in Section 1.34.
2.2 Eligible Employees on and after the Effective Date. On
and after the Effective Date an Eligible Employee may elect to
become a Member on the Initial Enrollment Date or any Enrollment
Date thereafter. Notwithstanding the foregoing, a former employ-
ee who is reemployed following a termination of employment and
who, prior to termination, satisfied the conditions for member-
ship in the Plan, shall not be eligible to become a Member of the
Plan until the first anniversary of his or her reemployment.
2.3 Completion of Appropriate Notice. In order to become a
Member on any Enrollment Date, an Eligible Employee must give the
Appropriate Notice to the Committee at least 30 days (or such
other period as the Committee may prescribe) prior to that
Enrollment Date.
2.4 Elections Upon Becoming A Member. An Eligible Employ-
ee, in giving the Appropriate Notice specified in Section 2.3,
shall (a) authorize the Employer to reduce current compensation
for Compensation Deferral Contributions pursuant to Section 3.1
(Compensation Deferral Contributions ), (b) make an investment
election from among those options enumerated in Section 8.1
(Investment of Accounts) and (c) designate a Beneficiary in
accordance with Section 2.5 (Beneficiary Designation). Any such
payroll authorization, investment election or Beneficiary desig-
nation shall remain in effect until changed by giving the Appro-
priate Notice to the Committee subject to the provisions of the
Plan.
2.5 Beneficiary Designation. Each Member shall designate a
Beneficiary by giving the Appropriate Notice to the Committee.
The designated Beneficiary may be an individual, estate or trust;
however, if the Member is married at the time of such Member's
death, such Member's surviving spouse shall automatically be such
Member's sole Beneficiary unless the spouse has consented in
writing in accordance with Section 10.9 (Spousal Consent) to a
designation of a different Beneficiary. If more than one indi-
vidual or trust is named, the Member shall indicate the shares
and/or precedence of each individual or trust so named. Any
Beneficiary so designated may be changed by the Member at any
time (subject to his spouse's consent, if applicable) by giving
the Appropriate Notice to the Committee.
In the event that no Beneficiary has been designated or that
no designated Beneficiary survives the Member, the following
Beneficiaries (if then living) shall be deemed to have been
designated in the following priority: (a) spouse, (b) children,
including adopted children, in equal shares, (c) parents, in
equal shares, or the Member's surviving parent, if only one
parent survives, and (d) Member's estate.
2.6 Transfers to or from Non-Covered Status. If a Member
ceases to meet the definition of Eligible Employee as set forth
in Section 1.13 (Eligible Employee) but continues to be an
Employee or an employee of an Affiliate, such Member's right to
make or have contributions made on such Member's behalf to the
Plan shall be suspended. If during the period of suspension, a
Member's employment with the Employer or an Affiliate terminates
for any reason, there shall be a distribution of such Member's
Accounts in accordance with the provisions of Article X (Distri-
bution).
If and when the suspended Member again becomes an Eligible
Employee, such Member may resume having Compensation Deferral
Contributions made on such Member's behalf as of the second
Enrollment Date following the month in which the Appropriate
Notice is given to the Committee.
2.7 Rollover Contributions From Other Plans. An Eligible
Employee or an individual who meets the definition of Eligible
Employee in Section 1.13 except for the age or service require-
ments, who is in receipt of a distribution which is eligible to
be "rolled over" to a qualified plan in accordance with applica-
ble Code sections may, in accordance with and subject to
such rules and procedures approved by the Committee, transfer all
or part of such distribution into the Plan; provided, that
distributions which are so transferred to the Plan shall consist
only of cash and that such transfer shall be in conformity with
requirements set forth in the Code.
Upon approval by the Committee, the amount transferred to
the Plan shall be deposited in the Trust Fund in cash and shall
be credited to a Rollover Contribution Account.
If a Rollover Contribution is made on behalf of an individu-
al who has not yet become a Member, such individual shall be
deemed a Member upon the establishment of the Rollover Contribu-
tion Account; however, participation in the Plan shall be limited
to the Rollover Contribution Account until the other requirements
for membership under this Article II are fulfilled.
ARTICLE III
Compensation Deferral Contributions
3.1 Compensation Deferral Contributions. Each Member who
is an Eligible Employee may elect to have the Employer make
Compensation Deferral Contributions not to exceed $9,500 per year
(subject to adjustment for inflation in accordance with Section
415(d) of the Code) to the Plan on such Member's behalf to be
credited to such Member's Compensation Deferral Contributions
Account, in which case the cash compensation otherwise payable by
the Employer to the Member shall be reduced by an amount equal to
the Compensation Deferral Contributions so made. Subject to the
limitations prescribed in Section 4.1 the amount of Compensation
Deferral Contributions in any payroll period shall be in whole
percentages from 1% to 17% of the Member's Compensation as the
Member shall designate (or such greater or lesser percentages as
the Committee may from time to time prescribe for the Plan).
The foregoing notwithstanding during the 'make up period,'
as defined below, a former Member (a 'Veteran') who is reemployed
after a period of military service may elect to have the Employer
make additional Compensation Deferral Contributions to the Plan
on such Veteran's behalf, the total of which may not exceed the
maximum Compensation Deferral Contributions that the Veteran
could have elected to have made if no military leave had oc-
curred. For the purposes of calculating the amount of such
additional Compensation Deferral Contributions the Veteran's
Compensation during such leave of absence shall be deemed to have
been the Veteran's annual rate of compensation at the time the
military leave of absence commenced (the 'Deemed Compensation
Rate') and the 'make up period' during which such additional
Compensation Deferral Contributions may be elected shall be equal
to the lesser of five years or three times the period of the
military leave of absence. Such additional Compensation Deferral
Contributions in any payroll period shall be in whole percentages
of the Veteran's current payroll and shall not exceed the maximum
amount that could have been deferred at the Deemed Compensation
Rate. In the event that the additional Compensation Deferral
Contributions to the Plan on a Veteran's behalf that are autho-
rized by this paragraph exceed the limitations set forth in
Article IV of the Plan or otherwise conflict with provisions of
the Code or ERISA, such limitations or conflicts shall be ignored
to the extent permitted by Code Section 414(u).
3.2 Changes and Suspension of Contributions. Compensation
Deferral Contributions made on a Member's behalf may be increased
or decreased or suspended effective on the second Enrollment Date
following the month in which the Appropriate Notice is given to
the Committee. A Member who has suspended Compensation Deferral
Contributions may resume having such contributions made on his or
her behalf commencing on the second Enrollment Date following the
month in which the Appropriate Notice is given to the Committee.
3.3 Transfer of Contributions to Trustee. Contributions
made under this Article III will be transferred to the Trustee by
the 15th day of the month following the month in which the
contributions are withheld from the Member's Compensation and/or
in which the Member's cash compensation is reduced; provided that
all Compensation Deferral Contributions for a Plan Year shall be
transferred to the Trustee not later than 30 days after the end
of the Plan Year.
ARTICLE IV
Limitations on, and Distribution of, Excess Compensation
Deferral Contributions of Highly Compensated Employees
4.1 Limitations. The Committee in its sole discretion shall
separately limit the amount of Compensation Deferral Contribu-
tions made on behalf of each "Highly Compensated Employee" (as
defined below) for each Plan Year to insure that neither the
Deferral Percentage nor the Contributions Percentage ( as defined
below and referred to herein as the "Percentage") does not exceed
the greater of (X) 125 percent of the Percentage in the preceding
Plan Year of all other eligible employees or, alternatively, (Y)
the Percentage in the preceding Plan Year of all other eligible
employees plus 2 percentage points and the actual Percentage for
the Highly Compensated Employees is not more than two times the
actual Percentage in the preceding Plan Year of all other eligi-
ble employees.
For purposes of this Section, the term "Deferral Percentage"
with respect to any Plan Year means the Compensation Deferral
Contributions for the Plan Year divided by Compensation.
For the purposes of this Section, the term "Highly Compen-
sated Employee" with respect to any Plan Year means an Eligible
Employee or former Eligible Employee who performed services
during the Plan Year for which the determination is being made
and:
(a) at any time during such Plan Year or preceding Plan
Year was a 5-percent owner of the Employer (as defined for
top-heavy plans under Code Sec. 416(1); or
(b) earned $80,000 or more in the preceding Plan Year
(subject to adjustment for inflation in accordance with
Section 415(d) of the Code) in annual Compensation from the
Employer.
(1) For the purposes of this Section, the term "Compensation"
means Compensation within the meaning of Code Section 415(c)(3),
including elective or salary reduction contributions to a cafeteria
plan, cash or deferred arrangement or tax sheltered annu-
ity.
(2) For the purpose of this Section the term "Employer" shall
also include all other entities aggregated with the Employer
under the requirements of Code Section 414(b), (c), (m) and (o).
For purposes of this Section, the Employer is permitted to
determine whether Members are in the category of Highly Compen-
sated Employees or other Eligible Employees based on the Member's
Compensation for the immediately preceding Plan Year or on
estimated Compensation for the Current Plan Year in accordance
with uniform and nondiscriminatory rules whenever information
regarding actual Compensation for the Plan Year is not reasonably
available at the time the amount of a contribution hereunder is
determined or limited.
For purposes of this Section the definition of "Compensation
Deferral Contributions" shall include Compensation Deferral
Contributions made under any other plan that is aggregated with
this Plan for purposes of Sections 401(a)(4) or 410(b) (other
than Section 410(b)(2)(A)(ii)) of the Code and if any such plan
is permissively aggregated with this Plan for the purposes of
Section 401(k) of the Code, the plans so aggregated must also
satisfy Section 401(a)(4) and 410(b) as if they were a single
plan. Further, for the purposes of this Section, Compensation
Deferral Contributions made on behalf of each Highly Compensated
Employee shall be determined by treating all cash or deferred
arrangements under which each such Highly Compensated Employee is
eligible as a single arrangement.
4.2 Control of Contributions and Distribution of Excess.
Rules For Compensation Deferral Contributions.The Committee
may, in accordance with uniform and nondiscriminatory rules it
establishes from time to time, require that Members who are among
the Highly Compensated Employees for the Plan Year make Compensa-
tion Deferral elections following and/or preceding the completion
of such elections by all other Eligible Employees and the Commit-
tee may (X) limit the amount by which each Member who is among
the Highly Compensated Employees may elect to reduce his or her
Compensation, and (Y) subject to Section 402(g) of the Code
permit each other Eligible Employee to elect to reduce his or her
Compensation within higher limits than those for Highly Compen-
sated Employees.
In the event that it is determined prior to the close of any
Enrollment Period that the amount of Compensation Deferral
Contributions to be made with respect to such Enrollment Period
would cause the limitation contained in this Section to be
exceeded for the Plan Year in which such Enrollment Period
occurs, the amount of Compensation Deferral Contributions allowed
to be made on behalf of Highly Compensated Employees for such
Enrollment Period shall be reduced. The Highly Compensated
Employees to whom the reduction is applicable, and the amount of
the excess Compensation Deferral Contributions, shall be deter-
mined by reducing the actual Deferral Contributions of the Highly
Compensated Employee or Employees with the highest actual Defer-
ral Contributions to the extent required to--
(i) enable the arrangement to satisfy the limita-
tion set forth in Section 4.1 above; or
(ii) cause such Highly Compensated Employee's or
Employees' actual Deferral Compensation to equal the
Deferral Compensation of the Highly Compensated Employ-
ee or Employees with the next highest actual Deferral
Compensation.
The "leveling" process described in paragraph (i) or (ii)
shall be repeated until the limitations set forth in this Section
are satisfied.
If the Committee determines that the limitations contained
in this Section have not been met for any Plan Year, the Commit-
tee may return the excess Compensation Deferral Contributions of
Members who are Highly Compensated Employees (calculated in the
manner set forth above) to such Members within the 12-month
period beginning after the last day of the Plan Year for which
such contributions were made. The amount of such excess Compen-
sation Deferral Contributions shall be adjusted to reflect any
income or loss allocable to such excess during the Plan Year
determined in accordance with the alternative method set forth in
Reg. Section 1.401(k)-1(f)(4)(ii)(c) and also from the end of the
Plan Year to the date of distribution determined in accordance
with the safe harbor method set forth in Reg. Section 1.401(k)-1(f)(4)(2)(d).
4.3 Limitation of Annual Additions.
(a) Notwithstanding anything herein to the con-
trary, in no event shall the Annual Additions (as here-
inafter defined) with respect to any Member in any Plan
Year exceed the Maximum Annual Addition. A Member's
"Maximum Annual Additions" means the lesser of (i) 25%
of the Member's compensation reported on Form W-2
(after December 31, 1997, compensation for the purposes
of Annual Additions shall also include elective or
salary reduction contributions to a cafeteria plan,
cash or deferred compensation arrangement or tax shel-
tered annuity) or (ii) the dollar limit in effect for
such Plan Year in accordance with Section 415(c)(1)(A)
of the Code ($30,000 as hereafter adjusted for infla-
tion in accordance with Section 415(d) of the Code),
(b) For purposes of this Section 4.3 the term
"Annual Additions" means the sum for any Plan Year of
(i) Compensation Deferral Contributions
made in accordance with Section 3.1 (Compen-
sation Deferral Contributions),
(ii) The amount of annual additions (within
the meaning of Section 415(c)(2) of the Code)
under all other qualified defined contribution
plans of the Employer or an Affiliate.
(c) If the Member's Annual Additions exceed the
Maximum Annual Additions limitations in accordance with
this Section 4.3, such amounts shall not be contributed
to the Trust or, if contributed by or on behalf of a
Member under the Plan shall be reduced to the extent
necessary to meet the limitations.
(d) Combined Fraction.
(i) Notwithstanding the foregoing, for any Plan
Year beginning before January 1, 2000, if a Member is a
participant in any qualified defined benefit plan main-
tained by an Employer or an Affiliate, the sum of the
"Defined Benefit Plan Fraction" (as defined below) and
the "Defined Contribution Plan Fraction" (as defined
below) for such Member shall not exceed 1.0 (called
"Combined Fraction"). If for any Plan Year the Com-
bined Fraction of a Member exceeds 1.0 after applica-
tion of provisions for limitation of benefits under all
such qualified defined benefit plans, the Maximum
Annual Additions of such Member shall be reduced as
provided in Section 4.3(c) to the extent necessary to
reduce the Combined Fraction of such Member to 1.0.
(ii) The "Defined Benefit Plan Fraction" applica-
ble to a Member for any Plan Year is a fraction, the
numerator of which is the sum of the Projected Annual
Benefit of the Member under all of the qualified de-
fined benefit Plans maintained by the Employer or an
Affiliate, (whether or not terminated) in which such
Member participates (determined as of the close of the
Plan Year) and the denominator of which is the lesser
of (A) the product of 1.25 multiplied by the maximum
dollar limitation on a Member's Projected Annual Bene-
fit if the plan provided the maximum benefit allowable
under Section 415(b) of the Code for such Plan Year, or
(B) the product of 1.4 multiplied by 100% of the
Member's Highest Average Compensation.
Notwithstanding the above, if the Member was a
participant in one or more defined benefit plans main-
tained by the Employer which were in existence on July
1, 1982, the denominator of this fraction will not be
less than 1.25 multiplied by the sum of the annual
benefits under such plans which the Member had accrued
as of the later of September 30, 1983, or the last
limitation year beginning before January 1, 1983. The
preceding sentence applies only if defined benefit
plans individually and in the aggregate satisfied the
requirements of Section 415 of the Code as in effect at
the end of the 1982 limitation year.
(iii) The "Defined Contribution Plan Fraction"
applicable to a Member for any Limitation Year is a
fraction, the numerator of which is the sum of the
Member's Annual Additions as of the close of such Plan
Year for that Plan Year and for all prior Plan Years
under all of the defined contribution plans maintained
by an Employer or an Affiliate in which Member partici-
pates, and the denominator of which is the lesser of
the following amounts (determined for such Plan Year
and for each prior Plan Year of service with the Em-
ployer or any Affiliate regardless of whether a plan
was in existence during those years): (A) the product
of 1.25 multiplied by the dollar limitation in effect
under Code Section 415(c)(1)(A) for the Plan Year
(determined without regard to the special dollar limi-
tation for employee stock ownership plans), or (B) the
product of 1.4 multiplied by twenty-five percent of the
Member's Compensation for the Plan Year.
(e) Definitions.
(i) "Highest Average Compensation" means the
average of a Member's high three consecutive Plan Years
(determined as of the close of the Plan Year) of em-
ployment with the Employer or the actual number of
years of employment for those Members who are employed
for less than three consecutive years with the Employ-
er.
(ii) "Projected Annual Benefit" means the annual
benefit a Member would receive from employer contribu-
tions under a defined benefit plan, adjusted, in the
case of any benefit payable in a form other than a
single life annuity or a qualified joint and survivor
annuity, to the actuarial equivalent of a single life
annuity, assuming (A) the Member continues employment
until reaching the plan's normal retirement age (or the
Member's current age, if later), (B) compensation
remains unchanged and (C) all other relevant factors
used to determine benefits under the plan remain con-
stant in the future.
(f) For purposes of this Section 4.3, the standard of
control for determining if a company is an Affiliate under
Section 414(b) and 414(c) of the Internal Revenue Code shall
be deemed to be "more than 50%" rather than "at least 80%."
ARTICLE V
Miscellaneous
5.1 Uniform Administration. Whenever, in the administra-
tion of the Plan, any action is required by the Employer or the
Committee, including, but not by way of limitation, action with
respect to eligibility or classification of employees, contribu-
tions or benefits, such action shall be uniform in nature as
applied to all persons similarly situated and no such action
shall be taken which will discriminate in favor of Members who
are officers or significant shareholders of the Employer or
persons whose principal duties consist of supervising the work of
other employees or highly compensated Members.
5.2 Payment Due an Incompetent. If the Committee deter-
mines that any person to whom a payment is due hereunder is
incompetent by reason of physical or mental disability, the
Committee shall have power to cause the payments becoming due to
such person to be made to another for the benefit of the incompe-
tent, without responsibility of the Committee or the Trustee to
see to the application of such payment. Payments made in accor-
dance with such power shall operate as a complete discharge of
all obligations on account of such payment of the Committee, the
Trustee and the Trust Fund.
5.3 Source of Payments. All benefits under the Plan shall
be paid or provided solely from the Trust Fund and the Employer
assumes no liability or responsibility therefor, except to the
extent required by law.
5.4 Plan Not a Contract of Employment. Nothing herein
contained shall be deemed to give any Eligible Employee or Member
the right to be retained in the employ of the Employer or to
interfere with the right of the Employer to discharge any Eligi-
ble Employee or Member at any time.
5.5 Applicable Law. Except to the extent governed by
Federal law the Plan shall be administered and interpreted in
accordance with the laws of the State of New York.
5.6 Unclaimed Amounts. It shall be the duty and responsi-
bility of a Member or a Beneficiary to keep the Committee ap-
prised of such Member's whereabouts and of such Member's current
mailing address. Unclaimed amounts shall consist of the amounts
of the Accounts of a retired, deceased or terminated Member which
cannot be distributed because of the Committee's inability, after
a reasonable search, to locate a Member or a Member's Beneficiary
within a period of two (2) years after the payment of benefits
becomes due. Unclaimed amounts for a Plan Year shall be Forfei-
tures for the Plan Year in which such two-year period shall end.
Such Forfeitures shall be treated as provided in Section 5.2.
If an unclaimed amount is subsequently properly claimed by
the Member or the Member's Beneficiary ("Reclaimed Amount") and
unless an Employer in its discretion makes a contribution to the
Plan for such year in an amount sufficient to pay such Reclaimed
Amount to the extent that the Reclaimed Amount originated as an
unclaimed amount, it shall be charged against Forfeitures for the
Plan Year and, to the extent such Forfeitures are not sufficient,
shall be treated as an expense of the trust fund.
ARTICLE VI
Accounts
6.1 Maintenance of Accounts. For each Member the Committee
shall, where applicable, cause a separate Compensation Deferral
Contributions Account, a Rollover Contribution Account and a
Prior Plan Account to be maintained. For Employee contributions
made to a Prior Plan which were not Compensation Deferral Contri-
butions the Committee shall continue to maintain a separate
Employee Contributions Account.
6.2 Valuations. As of each Valuation Date, the Committee
shall adjust the Employee Contributions Account, the Compensation
Deferral Contributions Account, the Rollover Contribution Account
and Prior Plan Account, as applicable, for each Member to reflect
his share of contributions (including for this purpose contribu-
tions made after such Valuation Date but credited as of such
Valuation Date), amounts of interest paid or accrued in respect
of a loan made to such Member pursuant to Section 9.5, withdraw-
als, distributions, forfeitures, income, expenses payable from
the Trust Fund and any increase or decrease in the value of Trust
Fund assets since the preceding Valuation Date. Each separate
account maintained for each loan made to a Member pursuant to
Section 9.5 shall be valued as of each Valuation Date by adjust-
ing the balance of the loan for the payments of principal there-
under.
ARTICLE VII
Vesting of Accounts
Interests in Compensation Deferral Contributions Accounts,
Prior Plan Accounts, Rollover Contribution Accounts and Employee
Contributions Accounts shall be fully vested at all times.
ARTICLE VIII
Investment of Accounts
8.1 Investment of Accounts. Upon becoming a Member, the
Member shall direct that Compensation Deferral Contributions and
any Prior Plan Contributions, Rollover Contributions or Employee
Contributions be invested in increments of 5% in one or more of
the following Investment Funds (or such other Fund as may hereaf-
ter be approved by the Committee) which individually and collec-
tively are designed to conform to DOL Regulation 2550.404c-1 for
so-called Section 404(c) plans in order that fiduciaries of the
Plan may be relieved of liability for any losses which are the
direct and necessary result of a Member's investment directions:
(a) The Company Stock Fund, which is invested in
Employer Securities. Members will not be permitted to
direct that an investment be made in the Company Stock Fund
unless and until the Member has received a prospectus in
respect of Employer Securities in the Company Stock Fund
which meets the requirements of the Securities Act of 1933
or in the opinion of counsel for the Company such investment
may be otherwise permitted.
(b) The Fixed Income Fund, which invests mainly in
fixed income investments that emphasize preservation of
principal and seeks a target rate of return over a period of
at least six months.
(c) The Federated Bond Fund, seeks high income by
investing in a wide range of bonds, including lower-rated,
high-yielding bonds.
(d) The Janus Fund, which seeks long-term growth by
investing in common stocks in companies of any size but with
an emphasis on larger companies.
(e) The Neuberger & Berman Guardian Trust Fund, which
seeks long-term growth and income by investing in stocks of
established high-quality companies considered to be under-
valued in comparison with stocks of similar companies.
(f) The BT Investment International Equity Fund, which
is invested in stocks of established companies in countries
with strong economies primarily in Europe and the Pacific
Basin. Investments in companies outside the United States
offer increased diversification with broadened opportunity
and potentially high returns.
(g) The Twentieth Century Ultra Fund, which seeks
long-term growth by investing in stocks of medium-size to
large companies with better than average growth potential.
(h) The BT Investment Equity Appreciation Fund, which
is invested in stocks of medium-sized companies in high-growth
industries. The Fund focuses on industries most
likely to benefit from large scale changes taking place in
society. Investments in medium-sized companies in high
growth industries offers greater volatility than investments
in larger companies in mature industries.
(i) The BT Investment Small Cap Fund, which seeks
long-term growth by primarily investing in stocks of small
U.S. companies with superior growth potential. This fund
may also invest up to 25% of its assets in foreign stocks.
(j) Three BT Investment Lifecycle Funds, which are
each invested in a continuously monitored mix of stocks,
bonds and money market instruments keyed to the investor's
investment term and risk tolerance:
I. The Short Range Fund, concentrates on securities
offering high income yield with less potential for
growth. Suitable for investment terms of five or
fewer years.
II. The Mid-Range Fund seeks a balance between invest-
ments offering high income yield and those offer-
ing more growth potential for the medium term.
III. The Long Range Fund pursues higher growth and
income investments while reducing exposure to
market volatility through the benefits of invest-
ing for longer terms.
8.2 Redirection of Future Contributions. A Member's
investment direction under Section 8.1 may be changed at any time
and will be effective for contributions received for the current
month provided that the Appropriate Notice is received by the
Committee before 2 P.M. Eastern Time on the last business day of
the month. Such change in direction will not be effective as to
amounts previously contributed or invested.
8.3 Reinvestment of Prior Contributions.
(a) Effective on the Enrollment Date following the
month in which the Appropriate Notice is received by the
Committee (not later than 2 P.M. Eastern Time on the last
business day of the month) a Member may direct that up to
the total value in any Investment Fund holding investments
from the Member's Compensation Deferral Contributions Acc-
ount, Prior Plan Account, Rollover Contribution Account or
Employee Contributions Account be transferred from such
Investment Fund to any other Investment Fund in increments
of 5%.
(b) The Committee may, in its sole discretion, impose
at any time or from time to time such restrictions on the
transfers of monies from one Investment Fund to another as
it deems necessary or appropriate.
8.4 Statements of Accounts And Confirmation of Investment
Directions.
(a) Statements of Accounts. Each Member shall be
furnished a quarterly statement of accounts. A like
statement shall be furnished to a Member upon any
distribution being made under the Plan.
(b) Confirmations of Investment Directions. All
investment directions given by Members under the Plan
shall be confirmed in writing.
8.5 Crediting of Accounts. Interests in each of the
Investment Funds shall be credited to each Member's Accounts as
units of value determined separately for each Investment Fund, as
follows:
(a) the initial value of a unit in each Investment
Fund shall be one dollar,
(b) the unit of value of each Investment Fund shall be
redetermined on each Valuation Date by dividing the then
fair market value of all of the assets of such Investment
Fund by the number of units therein then outstanding.
Amounts held as a result of forfeiture shall not be included
in the value of the Company Stock Fund in determining the
unit of value; and
(c) current Compensation Deferral Contributions and
Rollover Contributions will be credited to the Member's
Accounts as units of value, the number of which is deter-
mined by dividing the dollar amount of the contribution by
the then current unit of value.
If a suspense account credited in accordance with Section
4.3(f) is in existence on a Valuation Date, the number of units
of value in the suspense account shall be adjusted as of each
Valuation Date so that such an account does not participate in
the Trust's investment gains or losses. To the extent a Member's
Compensation Deferral Contributions Account is invested pursuant
to Section 9.5 in a loan to a Member, the Member's Accounts shall
be credited and charged directly with income, gains, losses and
expenses attributable to such loan as of each Valuation Date and
the value of the account will be adjusted through the date of a
distribution to reflect the value of such direct investments on
the distribution date. The Member's loan principal and interest
payments (i) shall be credited to the Member's Compensation
Deferral Contributions Account as units of value, the number of
which is determined as of the Valuation Date next following the
date of such payment by dividing the dollar amount of the payment
by the then current unit of value and (ii) shall be invested in
accordance with the Member's investment directions for future
Compensation Deferral Contributions pursuant to Section 8.2.
8.6 Correction of Errors. In the event of an error in the
adjustment of a Member's Account, the Committee, in its sole
discretion, may correct such error by either crediting or charg-
ing the adjustment required to make such correction to or against
Forfeitures for the Plan Year or to or against income as an
expense of the Trust for the Plan Year in which the correction is
made, or if an Employer contributes an amount to correct any such
error, from such amount. Except as provided in this Section, the
Accounts of other Members shall not be readjusted on account of
such error.
8.7 Investment of Deferred Distributions. Former Members
of the Plan shall have the same investment options for their
Accounts as are available for the Accounts of current Members of
the Plan.
ARTICLE IX
Withdrawals and Loans During Employment
9.1 Withdrawal Options. In any twelve-month period a
Member may make one withdrawal from the Plan that is not less
than $500 or the combined total of all of the eligible funds in
the Member's Accounts from which withdrawals may be made.
Eligibility includes:
(a) Hardship Eligibility. In the event of Hardship
(as defined in Section 9.2) before age 59-1/2, the entire
balance in the Member's Employee Contributions Account,
Rollover Contribution Account or Prior Plan Account, plus
the sum of all contributions that have been credited to a
Member's Compensation Deferral Contributions Account to date
together with any Income allocable to such contributions as
of December 31, 1988.
(b) Age 59-1/2 Eligibility. After a Member attains
age 59-1/2 the entire balance in all of the Member's Ac-
counts.
9.2 Hardship Withdrawals.
(a) Verification of Need. Each request for a hardship
withdrawal must be accompanied by a statement signed by the
Member attesting that the financial need cannot be relieved,
(i) Through reimbursement or compensation by
insurance or otherwise,
(ii) By liquidation of the Member's assets (in-
cluding those assets of the Member's spouse and minor
children that are reasonably available to the Member)
to the extent such liquidation will not itself cause
immediate and heavy financial need,
(iii) By ceasing Compensation Deferral Contribu-
tions under the Plan, or
(iv) By other distributions or nontaxable (at the
time of the loan) loans from any plan maintained by the
Employer or any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
The Committee shall be entitled to rely on the Member's
statement of need without inquiry into the Member's finan-
cial circumstances.
(b) Determination of Hardship. A withdrawal will be
deemed to be a hardship withdrawal if made on account of:
(i) Medical expenses incurred, or to be incurred,
by the Member, the Member's spouse, or any dependent,
(ii) Purchase (excluding mortgage payments) of a
principal residence for the Member,
(iii) Payment of tuition for the next year,
semester or quarter of post-secondary education for the
Member, the Member's spouse or any dependent,
(iv) The need to prevent the eviction of the
Member from the Member's principal residence or fore-
closure on the mortgage of the Member's principal
residence,
(v) Such other immediate and heavy financial need
as the Commissioner of Internal Revenue may from time
to time publish by revenue rulings, notices and other
documents of general applicability, or
(vi) Any other immediate and heavy financial need
as determined on the basis of all relevant facts and
circumstances by the Committee in an objective and
nondiscriminatory manner in accordance with the re-
quirements of the Code and the applicable regulations
and in accordance with the following standards and
principles:
(A) the need shall be due to an extra-ordi-
nary emergency,
(B) the need shall be heavy,
(C) the need shall be immediate,
(D) the need shall be for reasons of hard-
ship as commonly understood such as financial
expenses and not for entertainment or pleasure,
and
(E) the need shall not fail to qualify as
immediate and heavy merely because such need was
reasonably foreseeable or voluntarily incurred.
9.3 Values. All withdrawals under Sections 9.1 or 9.2
shall be based on the values of Accounts as of the Valuation Date
next following the date that the Appropriate Notice was given to
the Committee, or such other Valuation Date as the Committee
shall prescribe. Any withdrawal from any Account (or Subaccount
thereof) under Sections 9.1 and 9.2 shall be charged proportion-
ately against each Investment Fund described in Article VIII
(Investment of Accounts) in which such Account is invested.
9.4 Payment of Withdrawals. Any amount withdrawn under
Section 9.1 shall be paid to a Member in a lump sum in cash, as
soon as practicable after the Valuation Date as of which the
withdrawal election is effective provided, however, that at the
Member's request whole numbers of Employer Securities contained
in the Member's Account may be distributed in kind.
9.5 Loans. A Member who is a "party in interest" as
defined in Section 3(14) of ERISA (a "Party in Interest") may
borrow for any purpose from his or her Employee Contributions
Account, Compensation Deferral Contributions Account, Prior Plan
Account, if any, and Rollover Contribution Account in increments
of not less than $1,000 once in any twelve-month period an amount
(inclusive of current loans) of up to one half of the total of
such accounts, but in any event not more than $50,000 reduced by
the excess (if any) of the highest balance of existing loans
during the preceding 12 months over the current loan.
For the purposes of the foregoing, any outstanding
balance of an existing loan shall be aggregated with any addi-
tional funds being borrowed in order to calculate a Member's
borrowing limit. Transactions for additional funds shall be
booked and documented at then current interest rates as a new
loan.
All loans shall be made pursuant to such other procedures
and terms as shall be adopted by the Committee, subject to the
following:
(a) A loan may remain outstanding so long as the
borrower remains a Party in Interest and shall be repayable
within five years from the date of borrowing upon such terms
as may be determined by the Committee; provided, however,
that any loan of more than $15,000 used to acquire the
primary residence of a Member shall be repayable over a
period of up to ten years as determined by the Committee. A
Member may have no more than one primary residence loan and
one loan for any other purpose outstanding at any time.
The Committee may in its absolute discretion grant such
loan in accordance with such uniform and nondiscriminatory
rules as it may from time to time establish. Any such loan
shall be made at a then prevailing commercial rate of inter-
est for similar credits on such terms of repayment (in level
payments not less frequent than monthly) and subject to such
rules and restrictions as the Committee shall determine,
provided that any such loans shall be available to all
Members on a reasonably equivalent basis and that any loan
may be repaid at any time without penalty.
All Member loans shall be secured on a dollar for dollar
basis by up to 50% of the balance of the Accounts from which
the loan is made. To the extent a loan is unpaid, it shall
be deducted from the amount payable to such Member or such
Member's beneficiary at the time of distribution of the
Accounts from which the loan was made;
(b) In the event that a Member fails to repay a loan
according to its terms and foreclosure occurs, the Plan may
foreclose on the portion of the Member's Accounts for which
a distributable event has occurred. In the event of fore-
closure, a distributable event shall be deemed to occur
immediately following the next Valuation Date for any por-
tion of an Account with respect to which the Member or the
Member's Beneficiary would be permitted in accordance with
Sections 9.1 or 10.1 to elect an immediate distribution;
(c) The receivable representing the loan (and other
loans to the same Member) will be accounted for by the
Trustee as a separate earmarked investment solely for the
individual account of the Member. A Member's payments to
the Trust of principal and interest on the loan shall be
invested by the Trustee as elected by the Member in accor-
dance with the Member's investment directions for future
contributions in accordance with Section 8.2, as soon as
reasonably practical;
(d) Loan applications may be made at any time by any
Member by giving the Appropriate Notice to the Committee or
its designee at any time.
(e) No loan shall remain outstanding after a Member is
no longer a Party in Interest. If a Member who is no longer
a Party in Interest elects under Section 10.7 not to file a
claim for the commencement of benefits when the Member's
employment is terminated, the balance of any outstanding
loan must be repaid in full within sixty (60) days.
(f) Loan Origination Fee. From time to time the
Committee may set a reasonable loan origination fee for each
loan application. Such fees shall be deducted from loan
proceeds paid to loan applicants.
ARTICLE X
Distribution
10.1 Amount of Distribution. The Member or the Member's
beneficiary, as the case may be, shall not be entitled to elect
to receive a distribution of the vested value of the Member's
account until:
(a) the Member's attainment of age 59 1/2, Retirement,
termination of employment, death or Permanent Disability, or
(b) termination of the Plan without establishment or main-
tenance of a successor plan, or
(c) the date of sale of substantially all of the assets of
the Employer to an acquiring corporation which continues the
employment of the Member without the establishment of a
successor plan.
The vested value of the Member's Account shall be determined
as of the Valuation Date next following such distribution events
except that in the case of the Member's Total and Permanent
Disability the vested value of the Member's account shall be
determined as of the Valuation Date next following the date the
Committee determines that the Member has a Total and Permanent
Disability. In any event, such Valuation Date shall be no later
than the Valuation Date which immediately precedes the Member's
Required Beginning Date (or the date which would have been the
Member's Required beginning Date had the Member survived).
Distributions under the Plan to a Member's Beneficiary shall be
completed not more than five years after the Member's death.
10.2 Notice of Options and Normal Form of Distribution.
(a) Notice of Options.
(i) No less than thirty (30) nor more than ninety
(90) days prior to the date of any distribution hereunder
the Plan Administrator shall provide the Member with a
general description of the material features and an explana-
tion of the relative values of the optional forms of bene-
fits available under the Plan.
(ii) If a distribution is one to which Sections
401(a)(11) and 417 of the Code do not apply, such distribu-
tion may commence less than thirty (30) days after the
notice required under Reg. Section 1.411(a)-11(c) is given,
provided that:
(A) the Plan Administrator clearly informs the Member
that the Member has a right to a period of at
least thirty (30) days after receiving the notice
to consider the decision of whether or not to
elect a distribution (and, if applicable, a par-
ticular distribution option), and
(B) the Member, after receiving the notice,
affirmatively elects a distribution.
(iii) If the distribution is one to which sections
401(a)(11) and 417 of the Code do apply such distributions
may commence less than thirty (30) days after the notice
required by Section 10.8 provided that:
(A) The Plan Administrator clearly inform the Member
that the Member has a right to at least 30 days to consider
whether to waive the Qualified Joint and Survivor Annuity
and consent to a form of distribution other than a Qualified
Joint and Survivor Annuity;
(B) the Member, after receiving the notice, affirma-
tively elects (with spousal consent) to waive the Qualified
Joint and Survivor Annuity; and,
(C) Distribution in accordance with the affirmative
election does not commence before the expiration of the 7-day
period that begins the day after the explanation of the
Qualified Joint and Survivor Annuity is provided to the
participant.
(b) Normal Form of Distribution. Unless otherwise
elected in accordance with Section 10.3 and subject to
Section 10.7, distributions shall be made by the Trustee as
soon as practicable after the Valuation Date next following
the Member's (or the Member's Beneficiary's as the case may
be) election and written consent to receive a distribution
of the vested value of such Member's Account, in a single
sum in cash except that (i) at the Member's option Employer
Securities held in the Member's Account may be distributed
in kind and (ii) in the discretion of the Committee, a note
with respect to a Participant's loan from such Member's
Compensation Deferral Account may be distributed in kind.
10.3 Alternate Form of Distribution. A Member may request
to have the value of such Member's Accounts distributed in a
manner other than in accordance with Section 10.2. For any
portion of such Member's benefits accrued before May 1, 1995 that
become distributable under the Plan after May 1, 1995 such
alternate form of payment may be an annuity contract pursuant to
Section 10.8 or periodic installments of all benefits commencing
at such time as the Member shall elect in accordance with the
Plan payable over a fixed period not to exceed the lesser of ten
years or the life expectancy of the Member at the time payments
commence. Payment of any interest in the Company Stock Fund in a
Member's Accounts, if any, to which the Member has a nonforfeit-
able interest may be made in cash solely for the purpose of
effecting such an alternate form of distribution.
Distributions will be made in accordance with the require-
ments of the regulations under Code Section 401(a)(9), including
the minimum distribution incidental benefit requirements of
Proposed Regulations Section 1.401(a)(9)-2. Such minimum distri-
bution requirements shall supersede any distribution options in
the Plan that are inconsistent therewith.
10.4 Identity of Payee. The determination of the Committee
as to the identity of the proper payee of any benefit under the
Plan and the amount of such benefit properly payable shall be
conclusive, and payment in accordance with such determination
shall constitute a complete discharge of all obligations on
account of such benefit.
10.5 Non-alienation of Benefits.
(a) No benefit payable at any time under this
Plan shall be subject in any manner to alienation,
sale, transfer, assignment, pledge, attachment, or
other legal processes, or encumbrance of any kind. Any
attempt to alienate, sell, transfer, assign pledge or
otherwise encumber any such benefits, whether currently
or thereafter payable, shall be void. No benefit, nor
any fund which may be established for the payment of
such benefits, shall, in any manner, be liable for or
subject to the debts or liabilities of any person
entitled to such benefits. If any person shall attempt
to, or shall alienate, sell, transfer, assign, pledge
or otherwise encumber benefits to which such person may
become entitled under this Plan, or if by reason of
such person's bankruptcy or other event happening at
any time, such benefits would devolve upon any other
person or would not be enjoyed by the person entitled
thereto under the Plan, then the Committee, in its
discretion, may terminate the interest in any such
benefits of the person entitled thereto under the Plan
and hold or apply them to or for the benefit of such
person entitled thereto under the Plan or such person's
spouse, children or other dependents, or any of them,
in such manner as the Committee may deem proper.
(b) Notwithstanding Section 10.5(a), the Trustee
(i) shall comply with an order entered on or
after January 1, 1985, determined by the Committee to
be a Qualified Domestic Relations Order as provided in
Section 10.6 and
(ii) may treat an order entered before January 1,
1985, as a Qualified Domestic Relations Order even if
it does not meet the requirements of Section 10.6.
(iii) shall comply with a Federal tax levy made
pursuant to Code Section 6331 and with collection
proceedings by the United States on a judgment result-
ing from an unpaid tax assessment.
10.6 Qualified Domestic Relations Order.
(a) The Plan shall comply with the provisions of Code
Section 414(p) relating to qualified domestic relations
orders and all regulations pertaining thereto.
(b) An alternate payee's interest in the Plan will be
distributed in the form of a single sum as soon as practica-
ble after a proposed order is determined to be a qualified
domestic relations order.
10.7 Commencement of Benefits. Unless a Member elects
otherwise, the payment of benefits under the Plan shall begin not
later than the 60th day after the latest of the close of the Plan
Year in which:
(a) the Member attains age 65;
(b) the 10th anniversary of the date the Member's
participation in the Plan occurs;
(c) the Member's employment with the Employer or an
Affiliate is terminated.
provided that, except as provided in Section 10.10, no benefits
shall be distributed unless the Member has filed a claim for
benefits until the Valuation Date immediately preceding the
Required Beginning Date and further provided that benefits shall
commence to be distributed to the Member not later than the
Member's Required Beginning Date.
10.8 Annuities. If the form of distribution is to be an
annuity contract, it may be in such form and with such provisions
as the Member or the Member's Beneficiary, as the case may be,
may elect which are available for purchase from an insurance
company including, but not limited to, a full cash refund life
annuity, an annuity with income for life or an annuity with
income for a period certain (payable at least annually). Such
distribution is to be provided through the purchase from an
insurance company and distribution from the Trust Fund of a
nontransferable annuity contract; provided the benefit under such
annuity contract cannot be paid to anyone other than the Member
prior to the Member's death, and if a joint and survivor annuity
is provided, unless such joint annuitant shall be the Member's
spouse, the actuarial value of the Member's benefits, as of the
date benefit payments commence, shall be more than 50 percent
(50%) of the Member's vested Accounts.
(a) Limitation on Member Elections.
Notwithstanding any elections made by the Member,
benefit payments shall be made over a period not in
excess of the life of the Member or the lives of the
Member and the Member's Beneficiary or the Member's
life expectancy or the joint and last survivor life
expectancy of the Member and the Member's Beneficiary.
In the event the annuity benefits have commenced to be
paid to a Member before the Member's death the remain-
ing interest will be distributed at least as rapidly as
under the election made by the Member prior to the date
of death.
(b) Qualified Joint and Survivor Annuities.
Notwithstanding the foregoing provisions of this Sec-
tion 10.8, in the case of a Member who has elected to
receive an annuity form of benefit, distribution shall
be in the form of a Qualified Joint and Survivor Annu-
ity, unless the Member with the Member's spouse's con-
sent as provided in Section 10.9 elects to receive a
different form of annuity. The term "Qualified Joint
and Survivor Annuity" means an annuity payable to the
Member for life and, if the Member's spouse survives
the Member, a survivor annuity payable to the spouse
for life in an amount equal to 50 percent (50%) of the
annuity payable to the Member. If the Member who has
elected to receive an annuity form of benefit is not
married, subject to Section 10.6 (Qualified Domestic
Relations Order), the annuity shall be paid in the form
of a single life annuity unless the Member waives the
single life annuity. The amount of the benefits pay-
able under a Qualified Joint and Survivor Annuity shall
be the amount which can be purchased from an insurance
company with the Member' Accounts.
(c) A Member who elects to receive benefits in
the form of a life annuity and to whom benefits would
be payable in the form of a Qualified Joint and Survi-
vor Annuity pursuant to this Section 10.8 shall have
the right to waive a Qualified Joint and Survivor Annu-
ity, such waiver shall be consented to by the Member's
spouse in writing in accordance with Section 10.9 by
delivering written notice to the Committee, at any time
within the 90-day period prior to the annuity starting
date, to receive a different form of an annuity, the
Committee shall within a reasonable period of time
provide the Member, by personal delivery or first class
mail, with a written explanation of:
(i) the terms and conditions of the Quali-
fied Joint and Survivor Annuity;
(ii) the Member's right to make, and
the effect of, an election to waive the Qual-
ified Joint and Survivor Annuity;
(iii) the rights of the Member's spouse
to consent to the Member's election to waive
the Qualified Joint and Survivor Annuity and
the effect of consenting to such waiver; and
(iv) the Member's right to make, and
the effect of, a revocation of an election to
waive the Qualified Joint and Survivor Annu-
ity.
Any election made by a Member pursuant to Sections 10.8(b)
and 10.8(c) may be revoked by such Member by delivering written
notice to the Committee at any time prior to the Member's annuity
starting date and, once revoked, may be made again at any time by
delivering written notice to the Committee prior to the Member's
annuity starting date.
10.9 Spousal Consent. A valid spousal consent to the
Member's naming of a Beneficiary other than the Member's spouse
or to the Member's waiver of a Qualified Joint and Survivor
Annuity as defined in Section 10.8(b) shall be designated:
(a) in a writing acknowledging the effect of the
consent;
(b) witnessed by a notary public; and
(c) effective only for the spouse who exercises
the consent;
provided that, notwithstanding the provisions of this Article X,
the consent of a Member's spouse shall not be required if it is
established to the satisfaction of the Plan Administrator that
such consent may not be obtained because there is no spouse,
because the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe.
10.10 Payments Without Election. Notwithstanding any other
provision of this Article X:
(a) If a Member or a Beneficiary is entitled to a distribu-
tion and if the vested value of a Member's Account or
the vested value of the Beneficiary's share of the
Member's Account before benefits are paid or commence
to be paid hereunder does not exceed (and at the time
of any previous distribution did not exceed) $3,500
($5,000 after January 1, 1998), the Committee may in
accordance with uniform and nondiscriminatory rules
direct the immediate distribution of such benefit in a
single lump sum to the person entitled thereto regard-
less of any election or consent of the Member, the
Member's spouse or other Beneficiary, or
(b) If a Member has reached Normal Retirement Age and has
terminated his or her employment, the Committee may
direct the immediate distribution of the Member's
benefits as such Member may elect after notice given in
accordance with Section 10.2 (the "Notice"), which
distribution shall commence as soon as administratively
possible following the later of:
(i) 90 days after the Member's termination date, or
(ii) the last business day of November of the year in
which the Member becomes (or would have become)
70 and 1/2 years of age;
10.11. Trustee to Trustee Transfers.
(a) A Member who receives an Eligible Rollover
Distribution after December 31, 1992 may elect to have such
distribution paid directly to an Eligible Retirement Plan by
specifying in the Appropriate Notice the Eligible Retirement
Plan to which such distribution is to be paid in a direct
trustee to trustee transfer pursuant to such uniform rules
as to the form and time of transfer as the Committee shall
prescribe.
(b)(i) "Eligible Rollover Distribution." An Eligible
Rollover Distribution is any distribution of all or a
portion of the balance to the credit of the Member
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 Member distributee or the joint
lives (or joint life expectancies) of the Member distributee and the Member's
designated beneficiary, or for a specified period of ten years or more;
any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer
Securities).
(b)(ii) "Eligible Retirement Plan." An Eligible
Retirement Plan is an individual retirement account described in
section 408(a) of the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that
accepts the Member distributee's Eligible Rollover
Distribution. However, in the case of an Eligible
Rollover Distribution to the surviving spouse of a
Member, an Eligible Retirement Plan is an individual retirement
account or an individual retirement
annuity.
ARTICLE XI
Administration of the Plan
11.1 Plan Administrator. The Committee shall be the Plan
Administrator:
(a) The Committee shall administer, enforce and
interpret the Plan and the trust agreement established
hereunder and shall have the powers necessary thereto,
including but not by way of limitation the powers to exer-
cise its responsibilities in accordance with Sections 1.3
(Appropriate Notice), 1.9 (Compensation), 1.21 (Enrollment
Date), 1.29 (Leave of Absence), 1.42 (Total and Permanent
Disability), Article II (Eligibility and Membership) 3.1
(Compensation Deferral Contributions), 3.2 (Changes and
Suspension of Contributions), 4.1 (Limitations), 6.1 (Main-
tenance of Accounts), 6.2 (Valuations), Article VIII (In-
vestment of Accounts), Article IX (Withdrawals and Loans
During Employment), 12.6 (Disbursement of Funds), Article
XIV (Miscellaneous), and the remainder of this Article XI,
and
(b) Authority to hold the funds of the Plan shall be
delegated to the Trustee in accordance with Section 12.2
(Trustee), and
(c) Authority to direct the investment of the Plan's
funds shall be delegated to an Investment Manager in accor-
dance with Section 12.3 (Investment Manager).
With respect to all other responsibilities of the Plan
Administrator the Committee shall act through its duly authorized
officers and agents.
11.2 Board of Directors. With respect to Sections 11.8
(Personal Liability), 13.1 (Right to Amend) and 13.2 (Suspension
or Termination) the Employer shall act only by or pursuant to, a
resolution of the Board of Directors.
11.3 Appointment of the Committee. The Committee shall be
the Benefits Administration Committee.
11.4 Compensation, Expenses. All proper expenses required
for the administration of the Plan incurred by the Committee, the
Employer, an Investment Manager or the Trustee for accounting,
legal and other professional, consulting or technical services,
including fees and expenses of a recordkeeper, the Trustee or any
Investment Manager shall be paid by the Trust.
11.5 Committee Actions, Agents. The Committee may appoint
such agents, who need not be members of the Committee, as it may
deem necessary for the effective performance of its duties and
may delegate to such agents such powers and duties as the Commit-
tee may deem expedient or appropriate.
Any action of the Committee, including but not by way of
limitation, instructions to the Trustee, shall be evidenced by
the signature of a member who has been so authorized by the
Committee to sign for it, and the Trustee shall be fully protect-
ed in acting thereon. A certificate of the secretary or an
assistant secretary of the Committee setting forth the name of
the members thereof shall be sufficient evidence at all times as
to the persons then constituting the Committee.
11.6 Committee Meetings. The Committee shall hold meetings
upon such notice, at such time and place as they may determine.
The Committee shall act by a majority of its members at the time
in office and such action may be taken from time to time by a
vote at a meeting or in writing without a meeting. A majority of
the members of the Committee at the time in office shall consti-
tute a quorum for the transaction of business.
11.7 Authority and Duties of the Committee. The Committee
may from time to time establish rules for the administration of
the Plan. The Committee shall have the exclusive right to
interpret the Plan and to decide any matters arising thereunder
in connection with the administration of the Plan. It shall
endeavor to act by general rules so as not to discriminate in
favor of any person. Its decisions and the records of the
Committee shall be conclusive and binding upon the Employer,
Members and all other persons having an interest under the Plan.
No member of the Committee shall be disqualified from exercising
the powers and discretion herein conferred by reason of the fact
that the exercise of any such power or discretion may affect the
payment of benefits to such member under the Plan; however, no
member may vote on a matter relating exclusively to such member.
To the extent that it is administratively feasible, the period of
notice required for Members' elections to commence, change or
suspend contributions hereunder or to make or change investment
elections for either future contributions or existing accounts
may be relaxed, reduced or eliminated by the Committee in accor-
dance with uniform and non-discriminatory rules.
The Committee shall keep or cause to be kept all records and
other data as may be necessary for the administration of the
Plan.
11.8 Personal Liability. To the extent not contrary to the
provisions of ERISA, no member of the Committee, officer, direc-
tor or employee of an Employer shall be personally liable for
acts done in good faith hereunder unless resulting from such
member's own negligence or willful misconduct. Each such member
of the Committee, officer and director shall be indemnified by
the Employer against expenses reasonably incurred by such member
in connection with any action to which he may be a party by
reason of such member's responsibilities hereunder, except in
relation to matters as to which such member shall be adjudged in
such action to be liable for negligence or misconduct in the
performance of such member's duty. However, nothing in this Plan
shall be deemed to relieve any person who is a fiduciary under
the Plan for purposes of ERISA from any responsibility or liabil-
ity which such Act shall impose upon such member.
11.9 Dealings Between the Committee and Individual Members.
Any notice required to be given to, or any document required to
be filed with, the Committee will be properly given or filed if
mailed by registered or certified mail, postage prepaid, or
delivered to the Chairman of the Benefits Administration Commit-
tee, c/o U.S. Industries, Inc. 101 Wood Avenue South, Iselin, New
Jersey 08830, or to such other place as the Committee may hereaf-
ter from time to time designate.
The Committee shall make available to such Member for
examination, such of its records as pertain to the benefits to
which such Member shall be entitled under the Plan.
11.10 Information To Be Supplied by the Employer. The
Employer shall provide the Committee or its delegate with such
information as it shall from time to time need in the discharge
of its duties.
11.11 Records. The regularly kept records of the Committee
and the Employer shall be conclusive evidence of the Credited
Service and Service of an Employee, the Employee's Compensation,
age, marital status, status as an Employee, and all other matters
contained therein applicable to this Plan; provided that an
Employee may request a correction in the record of age or any
other disputed fact at any time prior to retirement. Such
correction shall be made if within 90 days after such request the
Employee furnishes the Committee in support thereof documentary
proof of age or the other disputed fact satisfactory to the
Committee.
11.12 Fiduciary Capacity. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the
Plan.
11.13 Fiduciary Responsibility. If a Plan fiduciary acts
in accordance with ERISA, Title I, Subtitle B, Part 4,
(a) in determining that a Member's spouse has consent-
ed to the naming of a Beneficiary other than the spouse or
that the consent of the Member's spouse may not be obtained
because there is no spouse, the spouse cannot be located or
other circumstances prescribed by the Secretary of the
Treasury by regulations, then to the extent of payments made
pursuant to such consent, revocation or determination, the
Plan and its fiduciaries shall have no further liability; or
(b) in treating a domestic relations order as being
(or not being) a Qualified Domestic Relations Order, or,
during any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations Order is
being determined (by the Committee, by a court of competent
jurisdiction, or otherwise), in separately accounting for
the amounts which would have been payable to the alternate
payee during such period if the order had been determined to
be a Qualified Domestic Relations Order, in paying the
amounts separately accounted for to the person entitled
thereto if within 18 months the domestic relations order (or
a modification thereof) is determined to be a Qualified
Domestic Relations Order, in paying such amounts to the
person entitled thereto if there had been no order if within
18 months the domestic relations order is determined not to
be qualified or if the issue is not resolved within 18
months and in prospectively applying a domestic relations
order which is determined to be qualified after the close of
the 18-month period, then the obligation of the Plan and its
fiduciaries to the Member and each alternate payee shall be
discharged to the extent of any payment made pursuant to
such acts.
11.14 Claim Procedure.
(a) Each Member or Beneficiary ("Claimant") may submit
an application for benefits ("Claims") to the Committee or
to such other person as may be designated by the Committee
in writing in such form as is provided or approved by the
Committee. A Claimant shall have no right to seek review of
a denial of benefits, or to bring any action in any court to
enforce a Claim prior to filing a Claim and exhausting all
rights to review in accordance with this Section.
When a Claim has been filed properly, such Claim
shall be evaluated and the Claimant shall be notified
of the approval or the denial of the Claim within
ninety (90) days after the receipt of such Claim unless
special circumstances require an extension of time for
processing the claim. If such an extension of time for
processing is required, written notice of the extension
shall be furnished to the Claimant prior to the termi-
nation of the initial ninety (90) day period, which
notice shall specify the special circumstances requir-
ing an extension and the date by which a final decision
will be reached (which date shall not be later than one
hundred and eighty (180) days after the date on which
the Claim was filed). A Claimant shall be given a
written notice in which the Claimant shall be advised
as to whether the Claim is granted or denied, in whole
or in part. If a Claim is denied, in whole or in part,
the notice shall contain (1) the specific reasons for
the denial, (2) references to pertinent Plan provisions
upon which the denial is based, (3) a description of
any additional material or information necessary to
perfect the Claim and an explanation of why such mate-
rial or information is necessary, and (4) the
Claimant's rights to seek review of the denial.
(b) If a Claim is denied, in whole or in part, the Claimant
shall have the right to (i) request that
the Committee (or such other person as shall be
designated in writing by the Committee) review the
denial, (ii) review pertinent documents, and (iii)
submit issues and comments in writing, provided
that the Claimant files a written request for
review with the Committee within sixty (60) days
after the date on which the Claimant received
written notification of the denial. Within sixty
(60) days after a request for review is received,
the review shall be made and the Claimant shall be
advised in writing of the decision on review,
unless special circumstances require an extension
of time for processing the review, in which case
the Claimant shall be given a written notification
within such initial sixty (60) day period specifying the
reasons for the extension and when such
review shall be completed within one hundred and
twenty (120) days after the date on which the
request for review was filed. The decision on
review shall be forwarded to the Claimant in writing and shall
include specific reasons for the
decision and references to Plan provisions upon
which the decision is based. A decision on review
shall be final and binding on all persons for all
purposes. If a Claimant shall fail to file a
request for review in accordance with the procedures herein outlined,
such Claimant shall have no
rights to review and shall have no right to bring
action in any court and the denial of the Claim
shall become final and binding on all persons for
all purposes.
ARTICLE XII
Operation of the Trust Fund
12.1 Trust Fund. All assets of the Plan shall be held in
trust as a Trust Fund for the exclusive benefit of Members and
their Beneficiaries, and no part of the corpus or income shall be
used for or diverted to any other purpose. No person shall have
any interest in or right to any part of the Trust Fund, except to
the extent provided in the Plan.
12.2 Trustee. All contributions to the Plan shall be paid
to a Trustee or Trustees which shall be appointed from time to
time by the Company by appropriate instrument with such powers in
the Trustee as to control and disbursement of the funds as the
Company shall approve and as shall be in accordance with the
Plan. The Company may remove any Trustee at any time, upon
reasonable notice and upon such removal or upon the resignation
of any Trustee the Company shall designate a successor Trustee.
12.3 Investment Manager. In accordance with the terms of
the trust agreement, the Company may appoint one or more Invest-
ment Managers (individuals and/or other entities), who may
include the Trustee and who are collectively referred to herein
as the Investment Manager, to direct the investment and reinvest-
ment of part or all of the Plan's funds that are not invested in
Employer Securities. The Company may change the appointment of
the Investment Manager from time to time.
12.4 Purchase and Holding of Securities. As soon as
convenient after receiving contributions, the Trustee shall:
(a) in the case of contributions which are to be in-
vested in Employer Securities purchase Employer Securities
in the open market, and register and hold such securities in
the name of the Trustee or its nominee;
(b) in the case of contributions which are to be
invested in the Fixed Income Fund, purchase group annuity
contracts or make other investment arrangements that in the
aggregate will provide the target rate of return; and,
(c) In the case of any of the managed funds listed in
Section 8.1 (c) through (j), purchase and hold shares in
such funds in accordance with the directions of Plan Mem-
bers.
12.5 Voting of Employer Securities. For shareholders'
meetings Members shall be furnished proxy material and a form for
instructing the Trustee how to vote the Employer Securities
represented by units credited to their Accounts, and the Trustee
shall vote or otherwise exercise shareholder rights with respect
to such Employer Securities as instructed. The Trustee shall
hold such instructions in confidence and shall not divulge them
to anyone, including, but not limited to, the Employer, its
officers or employees.
Shares for which no instructions are received shall be
voted by the Trustee in the same proportion as those shares for
which instructions have been received. With respect to the
exercise of shareholder's rights to sell or retain the Employer
Securities represented by units credited to a Member's Accounts
in extraordinary instances involving an unusual price and terms
and conditions for such securities such as a tender offer, the
Trustee shall act in accordance with the Committee's instruc-
tions.
12.6 Disbursement of Funds. The funds held by the Trustee
shall be applied, in the manner determined by the Committee, to
the payment of benefits to such persons as are entitled thereto
in accordance with the Plan.
The Committee shall determine the manner in which the funds
of the Plan shall be disbursed in accordance with the Plan,
including the form of voucher or warrant to be used in authoriz-
ing disbursements and the qualification of persons authorized to
approve and sign the same and any other matters incident to the
disbursement of such funds.
12.7 Exclusive Benefit of Members. All contributions under
the Plan shall be paid to the Trustee and deposited in the Trust
Fund and shall be held, managed and distributed solely in the
interest of the Members and beneficiaries for the exclusive
purpose of (1) providing benefits to Members and beneficiaries
and (2) defraying reasonable administrative expenses of the Plan
and the Trust, to the extent such expenses are not paid by the
Company or an Affiliate provided that:
(a) if a timely determination letter request is filed and
the Plan is denied initial qualification under Section
401(a) of the Code, contributions conditioned upon such
qualification shall be returned to the Company or the Affil-
iate making such contributions within one year of the denial
of qualification;
(b) if, and to the extent, a deduction for a contribution
under Section 404 of the Code is disallowed, contributions
conditioned upon deductibility shall be returned to the
Company or the Affiliate making such contribution within one
year after the disallowance of the deduction; and
(c) if, and to the extent, a contribution is made through a
good faith mistake of fact, such contribution shall be
returned to the Company or the Affiliate making such contri-
bution within one year.
ARTICLE XIII
Amendment, Termination and Merger
13.1 Right to Amend. The right to modify or amend the
provisions of the Plan in whole or in part at any time or from
time to time is reserved to the Company, but no such amendment
shall divest any Member of any amount previously credited to a
Member's Accounts or, except to the extent permitted by the
Secretary of the Treasury by regulation, shall eliminate with
respect to a Member's Account balance at the time of such amend-
ment an optional form of benefit, and further provided that no
part of the assets of the Trust Fund shall, by reason of any
modification or amendment, be used for or diverted to, purposes
other than for the exclusive benefit of Members and their Benefi-
ciaries, under the Plan.
13.2 Suspension or Termination. The Employer may at any
time suspend Compensation Deferral Contributions in whole or in
part. The suspension of Compensation Deferral Contributions
shall not in itself constitute a termination of the Plan. The
Employer may at any time terminate or discontinue the Plan by
filing with the Committee a certified copy of the resolution of
its board of directors authorizing the termination or discontinu-
ance.
If the Plan is terminated, no further contributions shall be
made by the Employer and the Account of each Member shall be
applied for the Member's (or the Member's Beneficiary's) benefit
either by payment in cash or in kind, or by the continuation of
the Trust Fund in accordance with the trust instrument and the
provisions of the Plan as though the Plan were otherwise in full
force and effect.
13.3 Merger, Consolidation of Transfer. In the case of any
merger, or consolidation with, or transfer of assets or liabili-
ties to any other plan, each Member in the Plan would (if the
Plan then terminated) receive a benefit immediately after the
merger, consolidation, or transfer which is equal to or greater
than the benefit such Member would have been entitled to receive
immediately before the merger consolidation, or transfer (if the
Plan had then terminated).
EXHIBIT 4(e)
O. AMES CO. RETIREMENT SAVINGS PLAN
(Restatement of May 31, 1995)
The O. AMES CO. RETIREMENT SAVINGS PLAN (the "Plan") as stated
herein is an amendment and restatement of the O. Ames Co. Savings
Plan as in effect on January 1, 1994.
The provisions of the Plan are subject to a determination by the
Internal Revenue Service that the Plan is qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended. It is
further intended that the Plan also conform to the requirements
of Title I of the Employee Retirement Income Security Act of
1974, as amended from time to time.
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . .1
1.1 "Accounts" . . . . . . . . . . . . . . . . . . . . . .1
1.2 "Affiliated Employer". . . . . . . . . . . . . . . . .1
1.3 "Average Contribution Percentage". . . . . . . . . . .1
1.4 "Average Deferral Percentage". . . . . . . . . . . . .1
1.5 "Beneficiary". . . . . . . . . . . . . . . . . . . . .1
1.6 "Board". . . . . . . . . . . . . . . . . . . . . . . .1
1.7 "Break in Service" . . . . . . . . . . . . . . . . . .1
1.8 "Code" . . . . . . . . . . . . . . . . . . . . . . . .2
1.9 "Committee". . . . . . . . . . . . . . . . . . . . . .2
1.10 "Compensation" . . . . . . . . . . . . . . . . . . . .2
1.11 "Contribution Percentage". . . . . . . . . . . . . . .2
1.12 "Deferral Percentage". . . . . . . . . . . . . . . . .3
1.13 "Disability" . . . . . . . . . . . . . . . . . . . . .3
1.14 "Effective Date of this Restatment". . . . . . . . . .3
1.15 "Eligible Employee". . . . . . . . . . . . . . . . . .3
1.16 "Eligibility Service". . . . . . . . . . . . . . . . .3
1.17 "Employee" . . . . . . . . . . . . . . . . . . . . . .3
1.18 "Employer" . . . . . . . . . . . . . . . . . . . . . .3
1.19 "Employer Account" . . . . . . . . . . . . . . . . . .3
1.20 "Employer Matching Contribution" . . . . . . . . . . .3
1.21 "Employement Commencement Date". . . . . . . . . . . .4
1.22 "Entry Date" . . . . . . . . . . . . . . . . . . . . .4
1.23 "ERISA". . . . . . . . . . . . . . . . . . . . . . . .4
1.24 "Family Member". . . . . . . . . . . . . . . . . . . .4
1.25 "Fund" . . . . . . . . . . . . . . . . . . . . . . . .4
1.26 "Funding Agent". . . . . . . . . . . . . . . . . . . .4
1.27 "Highly Compensated Employee". . . . . . . . . . . . .4
1.28 "Hour of Service". . . . . . . . . . . . . . . . . . .6
1.29 "Leased Employee". . . . . . . . . . . . . . . . . . .6
1.30 "Limitation Year". . . . . . . . . . . . . . . . . . .6
1.31 "Loan Account" . . . . . . . . . . . . . . . . . . . .6
1.32 "Named Fiduciary". . . . . . . . . . . . . . . . . . .6
1.33 "Nonhighly Compensated Employee" . . . . . . . . . . .6
1.34 "Normal Retirment Age" . . . . . . . . . . . . . . . .6
1.35 "Participant". . . . . . . . . . . . . . . . . . . . .6
1.36 "Period of Service". . . . . . . . . . . . . . . . . .6
1.37 "Plan" . . . . . . . . . . . . . . . . . . . . . . . .6
1.38 "Plan Sponsor" . . . . . . . . . . . . . . . . . . . .7
1.39 "Plan Year". . . . . . . . . . . . . . . . . . . . . .7
1.40 "Predecessor to this Plan" . . . . . . . . . . . . . .7
1.41 "Pretax Account" . . . . . . . . . . . . . . . . . . .7
1.42 "Pretax Contribution". . . . . . . . . . . . . . . . .7
1.43 "Qualified Nonelective Contributions". . . . . . . . .7
1.44 "Reemployment Date". . . . . . . . . . . . . . . . . .7
1.45 "Rollover Account" . . . . . . . . . . . . . . . . . .7
1.46 "Rollover Contribution". . . . . . . . . . . . . . . .7
1.47 "Service". . . . . . . . . . . . . . . . . . . . . . .7
1.48 "Severance from Service Date". . . . . . . . . . . . .7
1.49 "Spouse" . . . . . . . . . . . . . . . . . . . . . . .8
1.50 "Termination". . . . . . . . . . . . . . . . . . . . .8
1.51 "Valuation Date" . . . . . . . . . . . . . . . . . . .8
1.52 "Vesting Service". . . . . . . . . . . . . . . . . . .8
1.53 "Year of Service". . . . . . . . . . . . . . . . . . .8
ARTICLE 2
SERVICE COUNTING RULES . . . . . . . . . . .9
2.1 Hour of Service. . . . . . . . . . . . . . . . . . . .9
2.2 Service. . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE 3
ELIGIBILITY . . . . . . . . . . . . . 10
3.1 Eligibility. . . . . . . . . . . . . . . . . . . . . 10
3.2 Eligibility Upon Reemployment. . . . . . . . . . . . 10
3.3 Notification of Eligibility to
Particpate and Entry into Plan . . . . . . . . . . . 10
ARTICLE 4
PRETAX AND ROLLOVER CONTRIBUTIONS. . . . . 11
4.1 Pretax Contributions . . . . . . . . . . . . . . . . 11
4.2 Change of Contribution Level . . . . . . . . . . . . 12
4.3 Suspension of Contributions. . . . . . . . . . . . . 12
4.4 Manner of Contributions. . . . . . . . . . . . . . . 12
4.5 Remittance and Allocation of
Pretax and After-Tax Contributions . . . . . . . . . 12
4.6 Rollover Contributions . . . . . . . . . . . . . . . 12
ARTICLE 5
EMLOYER CONTRIBUTIONS. . . . . . . . . . . 14
5.1 Employer Contributions . . . . . . . . . . . . . . . 14
5.2 Remittance and Allocation of Employer Contributions. 14
5.3 Forfeitures of Employer Contributions. . . . . . . . 14
ARTICLE 6
NONDISCRIMINATION REQUIREMENT AND MAXIMUM ANNUAL ADDITIONS 15. . .
6.1 Nondiscrimination Requirements
for Pretax Contributions . . . . . . . . . . . . . . 15
6.2 Excess Pretax Contributions. . . . . . . . . . . . . 15
6.3 Family Aggregation Rules for Pretax Contributions. . 16
6.4 Nondiscrimination Requirements for Employer
Matching Contributions . . . . . . . . . . . . . . . 16
6.5 Excess Employer Matching Contributions . . . . . . . 17
6.6 Family Aggregation Rules for Employer. . . . . . . . 17
Matching Contribuitons . . . . . . . . . . . . . . . 18
6.7 Additional Nondiscrimination Limitation. . . . . . . 18
6.8 Level Method . . . . . . . . . . . . . . . . . . . . 19
6.9 Aggregation of Plans . . . . . . . . . . . . . . . . 20
6.10 Disaggregation of Plan20 . . . . . . . . . . . . . . .
6.11 Code Section 415 Limits. . . . . . . . . . . . . . . 20
ARTICLE 7
PARTICIPANT ACCOUNTS. . . . . . . . . 22
7.1 Participant Accounts . . . . . . . . . . . . . . . . 22
(b) Rollover Account . . . . . . . . . . . . . . . . . . 22
(c) Employer Account . . . . . . . . . . . . . . . . . . 22
(d) Loan Account . . . . . . . . . . . . . . . . . . 22
7.2 Allocations to Accounts. . . . . . . . . . . . . . . 22
ARTICLE 8
INVESTMENT OF CONTRIBUTIONS. . . . . . . . 24
8.1 Investment Funds . . . . . . . . . . . . . . . . . . 24
8.2 Election of Investment Fund for Contributions. . . . 24
8.3 Change in Election of Investment Fund for
Future Contributions . . . . . . . . . . . . . . . . 24
8.4 Change in Election of Investment Fund
For Past Contributions . . . . . . . . . . . . . . . 25
ARTICLE 9
WITHDRAWALS AND LOANS. . . . . . . . . . 26
9.1 Withdrawals of Pretax and Employer Contributions26 . .
9.2 Hardship Withdrawals . . . . . . . . . . . . . . . . 26
9.3 Valuation and Payment Withdrawals. . . . . . . . . . 28
9.4 Loans. . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 10
ENTITLEMENT TO BENEFITS. . . . . . . . . 31
10.1 Retirement . . . . . . . . . . . . . . . . . . . . . 31
10.2 Disability . . . . . . . . . . . . . . . . . . . . . 31
10.3 Termination of Employment. . . . . . . . . . . . . . 31
10.5 Vesting on Disposition of Business . . . . . . . . . 31
10.6 Forfeitures. . . . . . . . . . . . . . . . . . . . . 32
10.7 Death. . . . . . . . . . . . . . . . . . . . . . . . 32
10.8 Beneficiary. . . . . . . . . . . . . . . . . . . . . 32
10.9 Small Payments . . . . . . . . . . . . . . . . . . . 33
10.10Distributions to an Alternate Payee Under
Qualfied Domestic Relations Order. . . . . . . . . . 33
ARTICLE 11
DISTRUBUTION OF BENEFITS. . . . . . . . . 34
11.1 Form of Benefit Payment. . . . . . . . . . . . . . . 34
11.2 Benefit Commencement . . . . . . . . . . . . . . . . 34
11.3 Minimum Required Distributions . . . . . . . . . . . 34
11.4 Eligible Rollover Distributions. . . . . . . . . . . 35
ARTICLE 12
VOTING OF EMPLOYER SECURITIES AND TENDER OFFERS
12.1 Voting of Shares . . . . . . . . . . . . . . . . . . 37
12.2 Tender Offers. . . . . . . . . . . . . . . . . . . . 37
ARTICLE 13
PLAN ADMINISTRATION
13.1 Appointment of Committee . . . . . . . . . . . . . . 39
13.2 Powers and Duties of the Committee . . . . . . . . . 39
13.3 Actions by the Committee . . . . . . . . . . . . . . 40
13.4 Interested Committee Members . . . . . . . . . . . . 41
13.5 Indemnification. . . . . . . . . . . . . . . . . . . 41
13.6 Conclusiveness of Action . . . . . . . . . . . . . . 41
13.7 Payment of Expenses. . . . . . . . . . . . . . . . . 41
13.8 Claim Procedure. . . . . . . . . . . . . . . . . . . 41
ARTICLE 14
ESTABLISHMENT OF FUND. . . . . . . . . . . 43
14.1 Funding Agreement. . . . . . . . . . . . . . . . . . 43
ARTICLE 15
AMENDMENT, TERMINATION AND MERGER OF THE PLAN. . . 44
15.1 Right to Amend the Plan. . . . . . . . . . . . . . . 44
15.2 Right to Terminate the Plan. . . . . . . . . . . . . 44
15.3 Plan Mergers, Consolidations and Transfers . . . . . 44
15.4 Amendment of Vesting Schedule. . . . . . . . . . . . 44
ARTICLE 16
TOP-HEAVY PLAN REQUIREMENTS. . . . . . . . 46
16.1 General Rule . . . . . . . . . . . . . . . . . . . . 46
16.2 Vesting Provision. . . . . . . . . . . . . . . . . . 46
16.3 Minimum Contribution Provisions. . . . . . . . . . . 47
16.4 Coordination with Other Plans. . . . . . . . . . . . 47
16.5 Top-Heavy Plan Definition. . . . . . . . . . . . . . 50
16.6 Change in 415(e) Limits. . . . . . . . . . . . . . . 50
16.7 Key Employee . . . . . . . . . . . . . . . . . . . . 50
16.8 Non-Key Employee . . . . . . . . . . . . . . . . . . 51
16.9 Collective Bargaining Rules. . . . . . . . . . . . . 51
ARTICLE 17
MISCELLANEOUS . . . . . . . . . . . . 52
17.1 Limitation on Distributions. . . . . . . . . . . . . 52
17.2 Limitation on Reversion of Contributions . . . . . . 52
17.3 Voluntary Plan . . . . . . . . . . . . . . . . . . . 52
17.4 Nonalienation of Benefits. . . . . . . . . . . . . . 53
17.5 Inability to Receive Benefits. . . . . . . . . . . . 53
17.6 Missing Persons. . . . . . . . . . . . . . . . . . . 53
17.7 Limitation of Third Party Rights . . . . . . . . . . 53
17.8 Invalid Provisions . . . . . . . . . . . . . . . . . 54
17.9 One Plan . . . . . . . . . . . . . . . . . . . . . . 54
17.10Use and Form of Words. . . . . . . . . . . . . . . . 54
17.11Headings . . . . . . . . . . . . . . . . . . . . . . 54
17.12Governing Law. . . . . . . . . . . . . . . . . . . . 54
ARTICLE 1
DEFINITIONS
1.1 "Accounts" shall mean, with respect to any Participant, his
Pretax Account, Rollover Account, Employer Account and Loan
Account and shall, as to each such Account, include any
subaccount established thereunder. "Account" shall mean any
one (1) or more of the foregoing "Accounts."
1.2 "Affiliated Employer" shall mean O. Ames Co. and any of its
subsidiaries or affiliates, whether or not such entities
have adopted the plan, and any other entity which is a
member of a "controlled group of corporations," a group
under "common control," or an "affiliated service group,"
all as determined under Code Sections 414(b), (c), (m), (o),
or solely for purposes of Section 6.11, the rules set forth
in Code Section 415(h), which includes O. Ames Co.
1.3 "Average Contribution Percentage" shall mean, for any Plan
Year, the average of the ratios determined under Section
1.14 for (i) the group of Eligible Employees who are Highly
Compensated Employees and (ii) the group of Eligible
Employees who are Nonhighly Compensated Employees.
1.4 "Average Deferral Percentage" shall mean, for any Plan Year,
the average of the ratios determined under Section 1.15 for
(i) the group of Eligible Employees who are Highly
Compensated Employees and (ii) the group of Eligible
Employees who are Nonhighly Compensated Employees.
1.5 "Beneficiary" shall mean the person or persons, entity or
entities (including a trust(s)), or estate that shall be
entitled to receive benefits payable pursuant to the
provisions of this Plan by virtue of a Participant's death,
pursuant to the provisions of Section 10.6.
1.6 "Board" shall mean the Board of Directors of O. Ames Co.,
except that any action taken by the Board may also be taken
by a duly authorized committee of the Board.
1.7 "Break in Service" shall mean a period of at least 12
consecutive months beginning on a Severance from Service
Date during which the Employee does not perform an Hour of
Service, provided, however, that if a Break in Service does
occur, the period of time between the Severance from Service
Date and the date on which the Break in Service is deemed to
occur will not be considered as Service for purposes of this
Plan.
In the case of an Employee who is absent from work for any
period on or after the first day of the first Plan Year
beginning after December 31, 1984, by reason of (a) the
pregnancy of the Employee, (b) the birth of a child of the
Employee, (c) the placement of a child with the Employee in
connection with the adoption of such child by the Employee,
or (d) the care of a child for a period beginning
immediately following such birth or placement, the
12-consecutive month period beginning on the Severance from
Service Date shall not constitute a Break in Service.
In the case of an employee who is absent from work for any
period beginning on or after August 5, 1993, because of a
leave under the Family and Medical Leave Act of 1993, the
period of such absence shall not constitute a Break in
Service.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
1.9 "Committee" shall mean the committee of individuals
appointed by the chief executive officer to be responsible
for the operation and administration of the plan in
accordance with the provisions of Article 13.
1.10 "Compensation" shall mean the regular base salary including
commissions up to the FICA wage base for the current year,
paid to the Employee by the Company before any payroll
deductions for taxes or any other purposes and before
reductions made pursuant to this Plan. For the purpose of
hourly employees, "Base Salary" includes hourly incentives,
piece-rate pay, shift differentials and pay for overtime.
"Base Salary" does not include management or other bonuses,
incentive compensation (including incentive compensation
paid on a deferred basis), Employer Matching Contributions
under this Plan, or contributions to any other employee
benefit plan. "Compensation" shall not include amounts over
one hundred thousand dollars ($150,000), as indexed under
Section 401(a)(17) of the Code, determined on an annual
basis.
Under the family aggregation rules of Section 414(q)(6) of
the Code, an Eligible Employee who is a Highly Compensated
Employee and a five (5) percent owner or one of the ten (10)
most highly compensated employees and his Family Members
shall be treated as one Employee for purposes of this
Section 1.10.
1.11 "Contribution Percentage" shall mean, for any Plan Year, for
each Eligible Employee, whose Entry date on which he first
became entitled to participate in accordance with Section
3.3 has occurred, the ratio for each such Eligible Employee
of the amount of Employer Matching Contributions, if any,
made to the Plan and allocated to such Eligible Employee for
such Plan Year in accordance with Articles 4 and 5, to such
Eligible Employee's compensation within the meaning of Code
Section 414(s) for such Plan Year. In determining the
Contribution Percentage of a Highly Compensated Employee,
all Employer Matching Contributions made on behalf of such
Highly Compensated Employee to any plan maintained by an
Affiliated Employer shall be aggregated.
1.12 "Deferral Percentage" shall mean, for any Plan Year, for
each Eligible Employee, whose Entry Date on which he first
became entitled to participate in accordance with Section
3.3 has occurred, the ratio for each such Eligible Employee
of Pretax Contributions, if any, made to the Plan by the
Employer on behalf of such Eligible Employee for such Plan
Year to such Eligible Employee's compensation (within the
meaning of Code Section 414(s) for such Plan Year. In
determining the Deferral Percentage of a Highly Compensated
Employee, all Pretax Contributions made on behalf of such
Highly Compensated Employee to any plan maintained by an
Affiliated Employer shall be aggregated.
1.13 "Disability" shall mean a physical or mental condition of
such severity and duration as to prevent the Participant
from engaging in any occupation or employment for
remuneration or profit.
1.14 "Effective Date of this Restatement" shall mean January 1,
1994.
1.15 "Eligible Employee" shall mean a full-time Employee of an
Employer, who is entitled to participate in the Plan upon
meeting the requirements in accordance with Section 3.1,
other than (a) an Employee whose terms and conditions of
employment are the subject of a collective bargaining
agreement between an Employer and a collective bargaining
agent unless and until participation in the Plan shall have
been negotiated for and agreed to in writing by the
representatives of such Employer and the collective
bargaining agent, (b) a Leased Employee, or (c) an employee
who receives a wage or compensation on an hourly or
piecework basis (other than a pension, severance pay,
retainer or fee under contract).
1.16 "Eligibility Service" shall mean Service as counted for
determining an Employee's right to become a Participant in
the Plan, as determined in accordance with Article 2.
1.17 "Employee" shall mean any person who is a common-law
employee or a Leased Employee of an Affiliated Employer.
1.18 "Employer" shall mean O. Ames Co. and any other Affiliated
Employer which, with the consent of the Board,shall adopt
this Plan for some or all of its Eligible Employees.
"Employer" when used in this Plan shall refer to such
adopting entities either individually or collectively, as
the context may require.
1.19 "Employer Account" shall mean the account established for a
Participant in accordance with Section 7.1.
1.20 "Employer Matching Contribution" shall mean the
contributions made by the Employer to the Plan in accordance
with Section 5.1(a).
1.21 "Employment Commencement Date" shall mean the date on which
an Employee is first credited with an Hour of Service.
1.22 "Entry Date" shall mean the first day of the payroll period
coincident with or immediately following January 1, April 1,
July 1 and September 1 in every calendar year during which
the Plan is in effect.
1.23 "ERISA" shall mean the Employee Retirement Income Security
Act of 1974 (Public Law No.93-406), as amended from time to
time.
1.24 "Family Member" shall mean an individual described in
Section 414(q)(6)(B) of the Code, except that in determining
whether Compensation paid to Family Members exceeds one
hundred fifty thousand dollars ($150,000), as indexed under
Section 401(a)(17) of the Code, the term "Family Member"
shall include only the Spouse of the Eligible Employee and
any lineal descendants who have not attained age 19 before
the close of the Plan Year.
1.25 "Fund" shall mean any fund provided for in a trust
arrangement, or a combination of a trust arrangement and one
or more insurance company contracts, which is held by a
Funding Agent, to which contributions under the Plan on and
after the Effective Date will be made, and out of which
benefits are paid to Participant or otherwise provided for.
1.26 "Funding Agent" shall mean a trustee or insurance company or
any duly appointed successor or successors selected to hold
a Fund.
1.27 "Highly Compensated Employee" shall mean an Employee who
performs service during the Determination Year and is
described in one or more of the following groups in
accordance with IRS regulations:
(a) An Employee who is a five percent (5%) owner as defined
in Section 416(i)(1)(iii) of the Code, at any time
during the Determination Year or the Look-back Year.
(b) An Employee who receives Compensation in excess of
$75,000 during the Look-back Year. (The $75,000
limitation will be adjusted annually for increases in
the cost of living in accordance with Section 415(d) of
the Code).
(c) An Employee who receives Compensation in excess of
$50,000 during the Look-back Year and is a member of
the top-paid group for the Look-back Year. (The
$50,000 limitation will be adjusted annually for
increases in the cost of living in accordance with
Section 415(d) of the Code).
(d) An Employee who is an officer within the meaning of
Section 416(i) of the Code during the Look-back Year
and who receives Compensation in the Look-back Year
greater than fifty percent (50%) of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code, for the calendar year in which the Look-back Year
begins. Notwithstanding the foregoing, no more than 50
or, if lesser, the greater of three (3) employees or
ten percent (10%) of the Employees shall be treated as
officers; provided, however, if no officer is described
in this subparagraph (d), then the highest-paid officer
for such year shall be treated as herein described.
(e) An Employee who is (i) described in paragraph (b), (c)
or (d) above, and (ii) one of the 100 Employees who
receives the most Compensation from the Employer during
the Determination Year, when the Determination Year is
substituted for the Look-back Year in paragraphs (b),
(c), or (d).
A former Employee shall be treated as a Highly
Compensated Employee if such former Employee had a
separation year prior to the Determination Year and was
a Highly Compensated active Employee for either (1)
such Employee's separation year or (2) any
Determination Year ending on or after the Employee's
55th birthday.
A separation year is the Determination Year in which
the Employee separates from service. Notwithstanding
the foregoing, an Employee who separated from service
before January 1, 1987, is a Highly Compensated
Employee only if he was a fiver percent (5%) owner or
received Compensation in excess of $50,000 during (i)
the Employee's separation year (or the year preceding
such separation year), or (ii) any year ending on or
after such Employee's 55th birthday (or the last year
ending before such Employee's 55th birthday).
Notwithstanding anything to the contrary in this Plan,
Sections 414(b), (c) (m), (n) and (o) of the Code are
applied prior to determining whether an Employee is a
Highly Compensated Employee.
For the purposes of this section,
(a) "Compensation" shall mean compensation as defined in
Section 414(q)(7) of the Code and the regulations
thereunder.
(b) "Determination Year" shall mean the Plan Year for which
the determination of who is Highly Compensated is being
made.
(c) "Look-back Year" shall mean the twelve (12) month
period preceding the Determination Year.
(d) "Top-paid Group" shall mean the top twenty percent
(20%) of Employees when rated on the basis of
Compensation paid during the year. The number of
Employees in the group will be determined in accordance
with Section 414(q)(8) of the Code.
The Employer shall have the right to elect to determine
Highly Compensated Employees by reference to calendar year
Compensation, in accordance with IRS regulations. If the
Employer so elects, the Employer must make such election
with respect to all other qualified plans it maintains.
1.28 "Hour of Service" shall mean an hour of service calculated
in accordance with the provisions of Article 2.
1.29 "Leased Employee" shall mean any person who renders personal
services to an Affiliated Employer and who is described in
Section 414(n)(2) of the Code by reason of providing such
services, other than a person described in Section 414(n)(5)
of the Code.
1.30 "Limitation Year" shall mean the twelve (12) month period
ending on each December 31.
1.31 "Loan Account" shall mean the account established for a
Participant in accordance with Section 7.1.
1.32 "Named Fiduciary" shall mean a fiduciary designated as such
under the provisions of Article 13.
1.33 "Nonhighly Compensated Employee" shall mean an Eligible
Employee other than a Highly Compensated Employee.
1.34 "Normal Retirement Age" shall mean the later of:
(a) the time a Participant attains age 65, or
(b) the fifth (5th) anniversary of the time the Participant
commences participation in the Plan.
1.35 "Participant" shall mean an Eligible Employee who meets the
requirements for participation under Section 3.3 or an
Employee or former Employee for whom a Pretax Account, a
Rollover Account and/or an Employer Account is maintained.
For purposes of Sections 3.1, 4.1, 4.2 and 5.1, the term
"Participant" shall not include an Employee who is a
Participant solely because a Rollover Account is being
maintained on his behalf.
1.36 "Period of Service" shall mean the period of employment
during which the Employee is credited with Service under the
rules of Article 2.
1.37 "Plan" shall mean the O. Ames Co. Retirement Savings Plan,
as embodied herein, and any amendments thereto, and shall
also refer to any predecessor plan for which this document
is a restatement, and any predecessor plan that has been
merged into this Plan.
1.38 "Plan Sponsor" shall mean O. Ames Co.
1.39 "Plan Year" shall mean the period beginning on January 1 and
ending on December 31.
1.40 "Predecessor to this Plan" shall mean any plan for which
this Plan is a restatement, any plan which has been merged
into this Plan or any Predecessor to this Plan, or any other
plan sponsored by an entity which became an Affiliated
Employer by acquisition or merger, and which adopted this
Plan or a Predecessor to this Plan for any of its employees
who had been participants in such other plan.
1.41 "Pretax Account" shall mean the account established for a
Participant in accordance with Section 7.1.
1.42 "Pretax Contribution" shall mean the contributions that an
Employer makes to the Plan on behalf of a Participant in
accordance with Section 4.1.
1.43 "Qualified Nonelective Contributions" shall mean the
additional contributions, if any, made by an Employer to the
Plan pursuant to Sections 6.1 and 6.4 to satisfy the
nondiscrimination requirements on Pretax and/or Employer
Matching Contributions.
1.44 "Reemployment Date" shall mean the first date following a
Severance from Service Date on which an Employee performs an
Hour of Service.
1.45 "Rollover Account" shall mean the account established for a
Participant in accordance with Section 7.1.
1.46 "Rollover Contribution" shall mean the contribution made to
this Plan of a distribution from a qualified plan of a
former employer, in accordance with Section 4.6.
1.47 "Service" shall mean an Employee's period of employment with
an Employer or an Affiliated Employer that is counted as
"Service" in accordance with Article 2.
1.48 "Severance from Service Date" shall mean the earlier of (i)
the date on which an Employee resigns, retires, is
discharged or dies, or (ii) the first anniversary of the
first date of a period in which an Employee remains absent
from employment (with or without pay) for any reason other
than resignation, retirement, discharge or death (for
purposes of this clause (ii), an Employee shall not be
considered absent from employment during any period in which
he is in receipt of salary continuance payments from the
Company as a result of illness or disability).
1.49 "Spouse" shall mean the wife of a male Participant or the
husband of a female Participant as determined under
applicable state law.
1.50 "Termination" shall mean the cessation of active employment
with the Employer or an Affiliated Employer.
1.51 "Valuation Date" shall mean the last business day of each
calendar quarter.
1.52 "Vesting Service" shall mean Service as counted for
determining a Participant's right to vest in his Employer
Account under Article 7, as determined under the rules of
Article 2.
1.53 "Year of Service" shall mean a 12-month Period of Service.
ARTICLE 2
SERVICE COUNTING RULES
2.1 Hour of Service. An Hour of Service is each hour for which
an employee is directly or indirectly paid, or entitled to
payment, by an Affiliated Employer.
2.2 Service. Service is an individual's period of employment
commencing on his Employment Commencement Date or
Reemployment Date, whichever is applicable, and ending on
his Severance from Service Date. Service shall also include
any period of time beginning on an Employee's Severance from
Service Date and ending on the date on which he is next
credited with an Hour of Service, provided that such Hour of
Service is credited within the 12-consecutive-month period
following the date the Employee was first absent from active
employment. An Employee's Service as of to January 1, 1994
shall be equal to that Service credited to him under the
Plan on December 31, 1993.
If an Employee who completed less than one Year of Service
incurs a Break in Service and if the Break in Service equals
to exceeds five years, then, in the event he is reemployed
by an Affiliated Company he will be treated as a new
Employee for all purposes of this Plan, and the total period
of his prior Service will be disregarded. In all other
cases, if a former Employee is reemployed by an Affiliated
Company, his separate periods of Service will be aggregated
for purposes of this Plan on the basis that 12 months of
Service (30 days are deemed to be a month in the case of the
aggregation of fractional months) or 365 days of Service are
equal to a whole year of Service.
ARTICLE 3
ELIGIBILITY
3.1 Eligibility. An Eligible Employee who was a Participant in
the Plan on the Effective Date of this Restatement shall
continue to be eligible to participate in the Plan. Each
other Eligible Employee shall become eligible to participate
in the Plan upon the attainment of age 21 and completion of
one (1) Year of Service.
3.2 Eligibility Upon Reemployment. A former Participant or a
former Eligible Employee who had met the eligibility
requirements of Section 3.1 who is reemployed by the
Employer as an Eligible Employee shall be eligible to
participate in the Plan as of his reemployment date. An
Eligible Employee who had not met the eligibility
requirements of Section 3.1 before his Termination shall be
eligible to participate in the plan upon satisfaction of the
requirements in Section 3.1.
3.3 Notification of Eligibility to Participate and Entry into
Plan. The Committee shall notify each Eligible Employee of
the eligibility requirements and benefits under the Plan
prior to the Entry Date he first becomes entitled to
participate. An Eligible Employee (including a former
Participant who is reemployed) who has satisfied the
eligibility requirements specified in this Article 3 may
become a Participant by filing an election to have Pretax
Contributions made on his behalf, in accordance with Section
4.1. Such Eligible Employee's participation shall become
effective on the Entry Date coincident with or next
following the date on which such Eligible Employee files his
election with the Committee or as soon as practicable
thereafter. In order to become a Participant, an Eligible
Employee shall also be required to make investment elections
pursuant to Section 8.2 and to designate a Beneficiary
pursuant to Section 10.8.
ARTICLE 4
PRETAX AND ROLLOVER CONTRIBUTIONS
41. Pretax Contributions. Subject to the provisions of Section
6.1, 6.7, 6.11 and 9.2(e), a Participant may direct the
Employer, on forms prescribed by the Committee, to make
contributions to the Plan on his behalf of a stated whole
percentage of his Compensation. In no event will the
contribution exceed eighteen percent (18%) of his
Compensation. A Participant's Pretax Contributions to this
Plan and any other plan qualified under Code Section 401(k)
maintained by an Affiliated Employer shall not exceed seven
thousand dollars ($7,000) or such higher amount as may be
permitted under Code Section 401(g)(5) for any taxable year.
If, on or before March 1 of any year, a Participant notifies
the Plan Administrator in writing, that all or a portion of
the Pretax Contributions made on his behalf is in excess of
the dollar limit under Section 402(g)(5) for the preceding
taxable year of the Participant, the Plan Administrator
shall make a reasonable effort to distribute such excess
Pretax Contributions and income allocable to the
Participant, but in no event may such distribution be made
later than the April 15 following such notification. In the
case where the excess Pretax Contributions arose taking into
account only Pretax Contributions made to this plan and
other plans of an Affiliated Employer, a Participant shall
be deemed to have notified the Committee. The income
allocable to such excess Pretax Contributions shall include
income for the Plan Year for which the excess Pretax
Contributions were made and for the period between the end
of such Plan Year and the date of the distribution. The
income allocable to excess Pretax Contributions shall be
determined under the alternative method set forth in Reg.
Section 1.402(g)-1(e)(5)(iii) and the income for the period
between the end of the Plan Year and the date of
distribution shall be determined in accordance with the safe
harbor method set forth in Reg. Section 1.402(g)-1(e)(5)(iv).
Any amount distributed under this Section 4.1
shall be included in the Participant's Deferral Percentage
unless such a Participant is a Nonhighly Compensated
Employee and such excess arose solely because of excess
Pretax Contributions made to this Plan and other plans of an
Affiliated Employer.
4.2 Change of Contribution Level. A Participant may, on forms
prescribed by the Committee, direct the Employer to change
the rate of Pretax Contributions made on his behalf.
Changes may be made at any time during the Plan Year, but in
no event more than four (4) times in any Plan Year, and
shall become effective on the Entry Date coincident with or
next following the filing of the forms or as soon as
practicable thereafter.
4.3 Suspension of Contributions. A Participant may, on forms
prescribed by the Committee, direct the Employer to suspend
the Pretax Contributions made on his behalf. Suspensions
may be made at any time during the Plan Year and shall
become effective on the first of the month next following
the filing of the forms, provided the forms have been
received at least 15 days before the beginning of such next
month. A Participant who directs the Employer to suspend
the Pretax Contributions made on his behalf may resume such
contributions by filing a form prescribed by the Committee.
Resumption of contributions shall commence on the Entry Date
coincident with or next following a suspension of 90 days or
more by filing of the form with the Plan Administrator.
4.4 Manner of Contributions. All Pretax Contributions shall be
in the form of Employee-authorized payroll deductions. Such
deductions shall be made in whole percentages each payroll
period, subject to the change and suspension of contribution
provisions of Sections 4.2 and 4.3.
4.5 Remittance and Allocation of Pretax and After-tax
Contributions. Pretax Contributions shall be remitted to
the Funding Agent by the Employer as soon as practicable,
but in no event more than ninety (90) days after the end of
the payroll period during which such Contributions are made,
and shall be allocated to each Participant's Pretax Account
as of the next Valuation Date coincident with or next
following the end of the payroll period during which such
Contributions are made.
4.6 Rollover Contributions. An Employee of an Employer may,
subject to such uniform and nondiscriminatory terms and
conditions as may be established from time to time by the
Committee, request the Committee to authorize the Funding
Agent to accept a rollover of a distribution of the value of
the Employee's account or benefit from the qualified plan of
a former employer. A Rollover Contribution shall be
accepted provided the following conditions are met:
(a) the Rollover Contribution to this Plan is in cash;
(b) the Rollover Contribution does not include any employee
contributions;
(c) the Committee receives a letter from the Employee's
former employer stating that the distribution to the
Employee is from a plan qualified under Section 401(a)
of the Code and that the distribution is being made on
account of the Employee's severance of employment;
(d) the Employee makes a written statement that the
Rollover Contribution shall be made to this Plan within
sixty (60) days of his receipt of the distribution from
the other qualified plan and that the proposed Rollover
Contribution, to the best of his knowledge, meets all
of the Code requirements for rollover treatment.
The amount of the Rollover Contribution shall be held in the
Participant's Rollover Account. Such Account shall be
invested in accordance with Article 8 and shall be adjusted
for debits and credits in accordance with Section 7.2.
ARTICLE 5
EMPLOYER CONTRIBUTIONS
5.1 Employer Contributions.
(a) The Employer shall contribute for each Participant an
amount equal to no less than twenty-five percent (25%)
of the Participant's Pretax Contributions up to six
percent (6%) of the Participant's Compensation.
Employer matching contributions in excess of 25% may be
made with respect to a Participant's Pretax
Contributions up to six percent (6%) of the
Participant's Compensation, with respect to a Plan Year
at the discretion of the Employer.
(b) The Employer shall also make any contributions required
by Section 10.6.
(c) The Employer may make additional contributions to the
Plan in order to satisfy the limitations on Pretax
Contributions under Section 6.1 and on Employer
Matching Contributions under Section 6.4, as provided
for under Section 6.1 and 6.4, respectively.
5.2 Remittance and Allocation of Employer Contributions. All
Employer contributions pursuant to Section 5.1 shall be
transmitted to the Funding Agent as soon as practicable
after each payroll period during which such contributions
are made and shall be allocated as for the next Valuation
Date to each Participant's Employer Account.
5.3 Forfeitures of Employer Contributions. Any amounts
forfeited by Participants in accordance with Section 10.6 or
any forfeitable excess amounts resulting from the
limitations in Sections 6.2, 6.5 and 6.7 shall be used by
the Employer to reduce its contributions made pursuant to
Section 5.1.
ARTICLE 6
NONDISCRIMINATION REQUIREMENTS AND MAXIMUM ANNUAL ADDITIONS
6.1 Nondiscrimination Requirements for Pretax Contributions.
For any Plan Year, the amount of Pretax Contributions must
satisfy either subsection (a) or (b) as set forth below:
(a) The Average Deferral Percentage for Highly
Compensated Employees may not exceed one and
twenty-five one-hundredths (1.25) times the
Average Deferral Percentage for Nonhighly
Compensated Employees.
(b) The Average Deferral Percentage for Highly
Compensated Employees
(1) may not exceed two (2) times the Average
Deferral Percentage for Nonhighly Compensated
Employees, and
(2) may not exceed the Average Deferral
Percentage for Nonhighly Compensated
Employees by more than two (2) percentage
points.
The Committee is empowered to monitor the Plan throughout
the plan Year and decrease or suspend the amount of Pretax
Contributions by Highly Compensated Employees or any group
of Highly Compensated Employees made pursuant to Section
4.1. Any such decrease or suspension shall also be
effective for purposes of determining Employer Matching
Contributions to be made pursuant to Section 5.1.
The Employer may also, in its sole discretion, make
Qualified Nonelective Contributions on behalf of Eligible
Employees who are Nonhighly Compensated Employees in an
amount sufficient to satisfy the nondiscrimination
requirements of this Section. Such contributions shall be
allocated based on the ratio which each such Eligible
Employee's Compensation bears to the total Compensation of
all such Eligible Employees for the Plan Year. Such
additional contributions, if any, shall be fully vested.
6.2 Excess Pretax Contributions. If for any Plan Year it is
determined that the nondiscrimination requirements under
Section 6.1 are not satisfied:
(a) certain Highly Compensated Employees shall have the
Pretax Contributions made on their behalf reduced
retroactively in accordance with the leveling method
described in Section 6.8;
(b) a Highly Compensated Employee who has had the Pretax
Contributions made on his behalf reduced under
Subsection (a) shall have the amount of such reduction
plus any investment earnings allocable to such Pretax
Contributions paid in cash. Payment shall be made to
him within two and one-half (2 and 1/2) months following the
last day of the Plan Year for which the reduction was
necessary, if practicable, but in no event later than
the last day of the Plan Year following such Plan Year.
For any Plan Year, the amount of excess Pretax
Contributions to be distributed to any Participant
shall be reduced by the amount of excess deferrals
distributed to such Participant in accordance with
Section 4.1 for the Participant's taxable year ending
with or within the Plan Year. The income allocable to
such excess Pretax Contributions shall include income
for the Plan Year for which the Pretax Contributions
were made, determined in accordance with the
alternative method set forth in Reg.
Section 1.401(k)-1(f)(4)(ii)(C) and will include income for the period
between the end of such Plan Year and the date of the
distribution, determined in accordance with the safe
harbor method set forth in Reg. Section
1.401(k)-1(f)(4)(ii)(D). Any Employer Matching Contributions
attributable to excess Pretax Contributions or excess
deferrals (and income allocable to such Employer
Matching Contributions determined using the same method
for determining income on excess Pretax Contributions)
shall be forfeited within the period specified
immediately above and shall be used to reduce future
Employer Contributions under Section 5.1.
6.3 Family Aggregation Rules for Pretax Contributions. The
family aggregation rules of Section 414(q)(6) of the Code
shall apply to any Eligible Employee who is Highly
Compensated and a five (5) percent owner or one of the ten
(10) most Highly Compensated Employees. The Average
Deferral Percentage for the Family Members, which are
treated as one Eligible Employee who is Highly Compensated,
shall be the Average Deferral Percentage determined by
combining the Pretax Contributions and Compensation of all
eligible Family Members.
If the Average Deferral Percentage of a Highly Compensated
Employee is determined under the family aggregation rules,
excess Pretax Contributions shall be allocated among the
Family Members in proportion to the Pretax Contributions of
each Family Member that were combined to determine the
Average Deferral Percentage rates.
6.4 Nondiscrimination Requirements for Employer Matching
Contributions, For any Plan Year, the amount of Employer
Matching Contributions must satisfy either Subsection (a) or
(b) as set forth below:
(a) The Average Contribution Percentage for Highly
Compensated Employees may not exceed one and twenty-five
one-hundredths (1.25) times the Average
Contribution Percentage for Nonhighly Compensated
Employees.
(b) The Average Contribution Percentage for Highly
Compensated Employees
(1) may not exceed two (2) times the Average
Contribution Percentage for Nonhighly Compensated
Employees, and
(2) may not exceed the Average Contribution Percentage
for Nonhighly Compensated Employees by more than
two (2) percentage points.
The Employer may, in its sole discretion, make Qualified
Nonelective Contributions on behalf of Eligible Employees
who are Nonhighly Compensated Employees in an amount
sufficient to satisfy the nondiscrimination requirements of
this Section. Such contributions shall be allocated based
on the ratio which each such Eligible Employee's
Compensation bears to the total Compensation of all such
Eligible Employees for the Plan Year. Such additional
contributions shall be fully vested.
6.5 Excess Employer Matching Contributions. If for any Plan
Year it is determined that the nondiscrimination
requirements under Section 6.4 are not satisfied:
(a) Certain Highly Compensated Employees shall
have their Employer Matching Contributions
reduced retroactively in accordance with the
leveling method described in Section 6.8.
(b) Reduced nonforfeitable Employer Matching Contributions
plus any investment earnings allocable to such
Contributions shall be paid in cash to the Highly
Compensated Employee. Payment shall be made within two
and one-half (2 and 1/2) months following the last day of the
Plan Year for which the reduction was necessary, if
practicable, but in no event later than the last day of
the Plan Year following such Plan Year.
The income allocable to such reduced nonforfeitable
Employer Matching Contributions shall be determined in
accordance with the alternative method set forth in
Reg. Section 1.401(m)-1(e)(3)(ii)(C) and will include
income for the Plan Year for which Employer Matching
Contributions were made and for the period between the
end of such Plan Year and the date of distribution,
determined in accordance with the safe harbor method
set forth in Reg. Section 1.401(m)-1(e)(3)(ii)(D).
Forfeitable Employer Matching Contributions (and income
attributable to such matching contributions determined
in the same manner as for determining income on
Employer Matching Contributions) shall be forfeited
within the period specified immediately above and shall
be used to reduce future Employer contributions under
Section 5.1.
6.6 Family Aggregation Rules for Employer Matching
Contributions. The family aggregation rules of Section
414(q)(6) of the Code shall apply to any Eligible Employee
who is Highly Compensated and a five (5) percent owner or
one of the ten (10) most Highly Compensated Employees. The
Average Contribution Percentage for the family group, which
is treated as one Eligible Employee who is Highly
Compensated, shall be the Average Contribution Percentage
determined by combining Employer Matching Contributions and
Compensation of all eligible Family Members. Excess
Employer Matching Contributions shall be allocated among
such Family Members in proportion to the Employer Matching
Contributions of each Family Member that were combined to
determine the Average Contribution Percentage.
6.7 Additional Nondiscrimination Limitation. If the
nondiscrimination requirements in Sections 6.1 and 6.4 are
satisfied solely by using the limit set forth in Subsection
(b) in both Sections, then the requirements in either
Subsection (a) or (b) must be satisfied:
(a) The sum of the Average Deferral Percentage and the
Average Contribution Percentage for Highly Compensated
Employees may not exceed the sum of
(1) one and twenty-five one-hundredths (1.25) times
the greater of
(A) the Average Deferral Percentage of the
Nonhighly Compensated Employees, and
(B) the Average Contribution Percentage for the
Nonhighly Compensated Employees; and
(2) the lesser of
(A) two (2) times the lesser of the Average
Deferral Percentage and the Average
Contribution Percentage of the Nonhighly
Compensated Employees.
(B) two percentage points (2%) plus the lesser of
the Average Deferral Percentage and the
Average Contribution Percentage of the
Nonhighly Compensated Employees.
(b) The sum of the Average Deferral Percentage and Average
Contribution Percentage for Highly Compensated
Employees may not exceed the sum of
(1) one and twenty-five one-hundredths (1.25) times
the lesser of
(A) the Average Deferral Percentage of the
Nonhighly Compensated Employees, and
(B) the Average Contribution Percentage for the
Nonhighly Compensated Employees; and
(2) the greater of
(A) two (2) times the greater of the Average
Deferral Percentage and the Average
Contribution Percentage of the Nonhighly
Compensated Employees, and
(B) two percentage points (2%) plus the greater
of the Average Deferral Percentage and the
Average Contribution Percentage of the
Nonhighly Compensated Employees.
(c) If the nondiscrimination requirements under Subsection
(a) and (b) are not satisfied, amounts in excess of
that required to meet the nondiscrimination
requirements shall be treated as an Excess Pretax
Contribution and Excess Employer Matching Contribution
in the same manner as provided in Sections 6.2 and 6.5,
respectively.
6.8 Leveling Method. If the nondiscrimination requirements of
Section 6.1 or 6.4 are not met, Pretax Contributions (or
Employer Matching Contributions) shall be reduced
retroactively under the leveling method as follows:
(a) The Highly Compensated Employee with the highest
Deferral Percentage (or Contribution Percentage) shall
have his total Pretax Contributions (or Employer
Matching Contributions) reduced to the extent required
to satisfy the nondiscrimination requirements of
Section 6.1 (or Section 6.4) or to cause such Highly
Compensated Employee's Deferral Percentage (or
Contribution Percentage) to equal that of the Highly
Compensated Employee with the next highest Deferral
Percentage (or Contribution Percentage).
(b) If the nondiscrimination requirements set forth in
section 6.1 (or Section 6.4) are still not satisfied
after the reduction in subsection (a) is made, the
Highly Compensated Employees with the highest Deferral
Percentage (or Contribution Percentage) shall have
their total Pretax contributions (or Employer Matching
Contributions) reduced to the extent required to meet
the nondiscrimination requirements of Section 6.1 (or
Section 6.4) or to cause such Highly Compensated
Employee's Deferral Percentage (or Contribution
Percentage) to equal that of the Highly Compensated
Employee with the next highest Deferral Percentage (or
Contribution Percentage).
(c) If the nondiscrimination requirements set forth in
Section 6.1 (or Section 6.4) are still not satisfied
after the reduction in subsection (b) is made, the
process shall be repeated until the nondiscrimination
requirements of Section 6.1 (or Section 6.4) are
satisfied.
6.9 Aggregation of Plans. In the event this Plan is aggregated
with any other plan maintained by an Affiliated Employer and
treated as a single plan for purposes of Code Section
401(a)(4) and 410(b) (other than Section 410(b)(2)(A)(ii),
all Pretax Contributions and Employer Matching Contributions
made under the two plans shall be treated as made under a
single plan, and if two or more of such plans are
permissively aggregated for purposes of Sections 401(k) and
401(m) of the Code, such plans shall be treated as a single
plan for purposes of satisfying Section 401(a)(4) and 410(b)
of the Code.
6.10 Disaggregation of Plan. Notwithstanding anything contained
in the Plan to the contrary, in the event the mandatory
disaggregation rules of Reg. Section 1.401(k)-1(g)(11)(iii)
and/or 1.401(m)-1(b)(3)(ii) require that this Plan be
treated as two (2) or more separate plans, the provisions of
the Plan shall be applied separately with respect to each
deemed separate plan, as necessary and appropriate.
In the case of a deemed separate plan that covers Eligible
Employees employed within a classification with respect to
which retirement benefits have been the subject of
collective bargaining, the provisions of Sections 6.1, 6.2
and 6.3 shall apply to such deemed separate plan effective
for Plan Years beginning on or after January 1, 1993 and the
provisions of Sections 6.4, 6.5, 6.6 and 6.7 shall be deemed
satisfied by such deemed separate plan.
6.11 Code Section 415 Limits. The annual additions made on
behalf of a Participant hereunder shall be limited to the
extent required by Section 415 of the Code and rulings,
notices and regulations issued thereunder. To the extent
applicable, Section 415 of the Code and rulings, notices and
regulations issued thereunder are hereby incorporated by
reference into this Plan. In calculating these limits, the
following rules shall apply:
(a) In the event the Committee determines that the annual
additions made on behalf of a Participant during any
Limitation Year are in excess of the limitations of
this Section 6.11 as the result of a mistake in
estimating a Participant's compensation, a reasonable
error in determining the amount of Pretax Contributions
that may be made with respect to any Participant or
under other limited facts and circumstances which the
Commissioner of Internal Revenue Service finds justify
the use of these rules, such annual additions shall be
reduced by returning the Participant's Pretax
contributions, as appropriate, plus any gains or
losses, for such Limitation Year in such amount so that
the limitations of this Section 6.11 are not exceeded.
Any Pretax Contributions thus distributed shall be
disregarded for purposes of Sections 1.13 and 4.1, as
appropriate.
If, following the return of all the Participant's
Pretax Contributions that may be refunded, the annual
additions made on behalf of a Participant during the
Limitation Year are still exceeded, such annual
additions shall be reduced to the extent necessary,
first from unmatched Pretax Contributions, then from
Employer Matching Contributions, then from any
remaining Pretax Contributions for such Limitation
Year, so that the limitations of this Section 6.11 are
not exceeded. The amount of such reduction shall be
credited to an unallocated Employer Contributions
account, shall not be subject to adjustment in
accordance with Section 7.2 and shall be deemed to be
an Employer Matching Contribution for the Participant
for the next succeeding Limitation Year (and succeeding
Limitation Years as necessary) and used to fulfill the
Employer's obligation under 5.1 in such following
Limitation Year. However, if the Participant is not
covered under the Plan as of the end of the Limitation
Year, the excess amounts must be held in the
unallocated Employer Contribution account and
reallocated in the next Limitation Year to all the
remaining Participants in the Plan.
(b) If the Participant is, or ever has been, covered under
one or more qualified defined benefit plans maintained
by the Employer or Affiliated Employer, the combined
plan limits of Code Section 415(e) shall be calculated
by reducing the limits applicable to the defined
benefit plans first, prior to restricting annual
additions to this Plan.
ARTICLE 7
PARTICIPANT ACCOUNTS
7.1 Participant Accounts. The Committee shall establish the
following accounts for each Participant, as appropriate:
(a) Pretax Account. The value of Pretax Contributions made
on behalf of each Participant shall be accounted for in
his Prates Account.
(b) Rollover Account. The value of a Participant's
Rollover Contribution under Section 4.6 shall be
accounted for in his Rollover Account.
(c) Employer Account. The value of Employer Matching
Contributions made on behalf of each Participant shall
be accounted for in his Employer Account. In addition,
the value of any Qualified Non-Elective Contributions
made pursuant to Sections 6.1 and 6.4 shall be
accounted for in a subaccount established within the
Employer Account for this type of contribution.
(d) Loan Account. If a Participant takes a loan from the
Plan pursuant to Section 9.4, the promissory note shall
be accounted for in his Loan Account.
The maintenance of such Accounts is for accounting purposes
only and segregation of the Fund's assets shall not be
required. Contributions shall be allocated to Participants'
Accounts as soon as practicable after they are made.
7.2 Allocations to Accounts. As of each Valuation Date, the
Funding Agent shall determine the fair market value of the
Fund and the Committee shall determine the fair market value
of each Participant Account. The Account balances of each
Participant shall be adjusted on a reasonable and consistent
basis to reflect the following events since the preceding
Valuation Date:
(a) Forfeitures and distributions from his Accounts;
(b) Investment elections and his pro rata share of
gains/losses and expenses of the investment funds in
which his Account balances are invested;
(c) His Pretax and Rollover Contributions, if any;
(d) His allocations of Employer contributions made pursuant
to Section 5.1; and
(e) Other credits and charges properly allocable.
In determining the value of the Fund and each individual
Account, the Funding Agent and the Committee shall exercise
their best judgment, and all determinations of value shall
be binding upon all Participants and their Beneficiaries.
All allocations shall be deemed to have been made as of the
Valuation Date, regardless of when allocations are actually
made.
The Committee shall also have the right to authorize the
Funding Agent to determine the fair market value of the Fund
on a date other than a Valuation Date when it deems
necessary to preserve the assets of the Plan.
ARTICLE 8
INVESTMENT OF CONTRIBUTIONS
8.1 Investment Funds. The agreement entered into between the
Employer and the Funding Agent pursuant to Section 14.1 to
invest and retain the assets of the Plan shall provide at
least four (4) investment fund options in which Participants
can invest their Pretax Contributions, Qualified Nonelective
Contributions and Rollover Contributions. Those funds shall
include:
(a) The Fixed Income Fund -- a fund consisting primarily of
one or more fixed income investments.
(b) The Money Market fund -- a fund primarily invested in a
blend of short term money market investments.
(c) The Equity Fund -- a fund primarily invested in common
stocks.
(d) The Company Stock Fund -- a fund which invests in U.S.
Industries, Inc. Common Stock (the "Employer
Securities").
Employer Matching Contributions will be invested exclusively
in Employer Securities.
8.2 Election of Investment Fund for Contributions. A
Participant shall direct, at the time he becomes a
Participant in the Plan, on forms prescribed by the
Committee, in multiples of 25%, the manner in which his
Pretax and Rollover Contributions are to be invested.
Qualified Nonelective Contributions shall be invested in the
same manner as a Participant's Employer Matching
Contributions are to be invested, provided, however, that
Qualified Nonelective Contributions made on behalf of
Eligible Employees who are not otherwise Participants shall
be invested in the Money Market Fund. Investments shall be
made in one (1) or more of the investment funds available
under Section 8.1.
8.3 Change in Election of Investment Fund for Future
Contributions. Subject to any limitations imposed by the
Funding Agent and the Committee, a Participant may, on forms
prescribed by the Committee, change his investment election
for future Pretax Contributions. Qualified Nonelective
Contributions shall be invested in the same manner as a
Participant's Employer Matching Contributions are to be
invested, provided, however, that Qualified Nonelective
Contributions made on behalf of Eligible Employees who are
not otherwise Participants shall be invested in the Money
Market Fund. Changes may be made at any time during the
Plan Year and shall become effective on the Valuation date
coincident with or next following the filing of the forms
provided the form was filed with the Plan Administrator at
least 15 days before the effective date.
8.4 Change in Election of Investment Fund for Past
Contributions. Subject to any limitations imposed by the
Funding Agent and the Committee, a Participant may, on forms
prescribed by the Committee, transfer all or a portion of
the value of his Accounts other than his Employer Account
attributable to Employer Matching Contributions and earnings
thereon from one fund to another fund. Transfer may be made
at anytime during the Plan Year and shall become effective
on the Valuation Date coincident with or next following the
filing of the forms or a soon as practicable thereafter.
ARTICLE 9
WITHDRAWALS AND LOANS
9.1 Withdrawals of Pretax and Employer Contributions. A
Participant who is an Employee shall have no right to
withdraw any portion of his Qualified Nonelective
Contribution subaccount of his Employer Account. A
Participant who is an Employee shall have no right to
withdraw any portion of his Pretax Account or his Employer
Account or Rollover Account except as provided in Section
9.2.
9.2 Hardship Withdrawals.
(a) A Participant who is an Employee may, in the event of
Hardship, be permitted to make a withdrawal from his
Accounts. For purposes of this Section 9.2, the term
"Hardship" shall mean:
(1) Medical expenses as defined in Code Section 213(d)
incurred by the Participant, the Participant's
Spouse or any of his dependents or necessary for
these persons to obtain such medical care;
(2) Purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition and related educational fees
for the next twelve (12) months of post-secondary
education for the Participant, his Spouse, or any
of his dependents;
(4) The need to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence;
(5) Expenses arising from circumstances of sufficient
severity that a Participant is confronted by
present or impending financial ruin or his family
is clearly endangered by present or impending want
or deprivation; and
(6) Any other expenses that he Internal Revenue
Service announces as qualifying as a "hardship"
under Code Section 401(k).
(b) For a Hardship withdrawal to be granted, the following
requirements must be met:
(1) The amount of the withdrawal must not be in excess
of the amount necessary to alleviate the Hardship,
including amounts necessary to pay any Federal,
State and local income taxes or penalties
reasonably expected to result from the
distribution.
(2) The Participant must have made all withdrawals,
other than hardship withdrawals, and take all
nontaxable loans currently available to him under
this Plan and any other plan maintained by an
Affiliated Employer.
(3) Notwithstanding Sections 4.1 and 4.2, such
Participant shall not be permitted to have
elective contributions made on his behalf or to
make employee contributions to any other plan
maintained by an Affiliated Employer during the
twelve (12) month period following his receipt of
such withdrawal. For this purpose, the phrase
"any other plan maintained by an Affiliated
Employer" means all qualified and nonqualified
plans of deferred compensation maintained by an
Affiliated Employer. The phrase includes a stock
option, stock purchase, or similar plan, or a cash
or deferred arrangement under a cafeteria plan,
within the meaning of Code Section 125, but does
not include a health or welfare benefit plan,
including one that is part of such a cafeteria
plan.
(4) The maximum Pretax contribution such Participant
is permitted to have made on his behalf under Code
Section 402(g) to this Plan and any other plan
maintained by an Affiliated Employer for the
calendar year following the calendar year of the
Hardship withdrawal shall be reduced by the amount
of such elective contributions made on behalf of
the Participant in the calendar year of the
Hardship withdrawal to this Plan and all other
plans maintained by an Affiliated Employer in
which the Participant participated.
(5) Besides meeting the other conditions, the amount
of the withdrawal must be at least $500. Only one
withdrawal is permitted in any 12-month period.
(c) The amount necessary to fund the withdrawal shall be
taken first from the value of the Participant's
Rollover Account, if any, and then from the value of
the Participant's Employer Account, excluding the value
of the Participant's Qualified Nonelective
Contributions subaccount. Any further amounts
necessary to alleviate the Hardship shall be taken from
the Participant's Pretax Account up to an amount not in
excess of the value of the Pretax Account as of
December 31, 1988 and the total of the Participant's
Pretax Contributions made after December 31, 1988.
(d) A request for a withdrawal under this Section 9.2 shall
be made on forms prescribed by the Committee. The
Committee shall establish a uniform and
nondiscriminatory policy for reviewing withdrawal
applications and any determination made by the
Committee shall be final but subject to appeal under
Section 13.8.
9.3 Valuation and Payment of Withdrawals. In the event of a
withdrawal under this Article 9, the value of a
Participant's Accounts shall be determined by the Trustee as
of the Valuation Date coincident with or next following the
date on which the Trustee receives instructions from the
Committee to make the Hardship withdrawal. Withdrawals
shall be paid to the Participant in cash on the earliest
practicable date following the aforementioned Valuation
Date.
9.4 Loans. A Participant who is an Employee or a former
Employee who is a party-in-interest (as defined in Section
3(14) of ERISA) of the Employer may, on forms and in
accordance with procedures prescribed by the Committee,
apply to borrow from the value of the nonforfeitable portion
of his Accounts. Any loan made under this Section 9.4 shall
be subject to the following provisions:
(a) Only one (1) loan shall be made to a Participant in any
12-month period and no loan will be made if there is
another loan outstanding.
(b) The amount of a loan shall not be less than five
hundred dollars ($500). At the time a loan is made,
the amount of such loan shall not exceed the lesser of
(i) fifty thousand dollars ($50,000) reduced by the
Participant's highest outstanding loan balance during
the one (1) year period ending on the day before the
date on which a loan is made, and (ii) fifty percent
(50%) of the value of the nonforfeitable portion of the
Participant's Accounts as of the last Valuation Date.
(c) The rate of interest that will be charged on a loan for
its duration shall be the prevailing rate charges by
commercial lenders for loans made under similar
circumstances, as of the first day of the calendar
quarter in which the loan is made, provided the rate
does not violate applicable usuary laws. such rate
shall be determined by the Committee, in its sole
discretion.
(d) The term of the loan shall not be less than six (6)
months nor exceed five (5) years, unless the loan is
used to acquire a dwelling unit which, within a
reasonable period of time (determined at the time the
loan is made), is to be used as the principal residence
of the Participant, and except as provided by the
Secretary of the Treasury, shall require substantially
level amortization of the loan (with payments not less
frequent than quarterly) over its term. All loans
shall be repaid by payroll deductions. Any loan may be
repaid in whole or in part without penalty subject to
such rules as the Committee may determine, provided the
amount of any pre-payment is made through certified
check.
(e) An amount having a value equal to the principal amount
of the loan shall be deducted from the Account of a
Participant to whom a loan is made. Unless the
Participant otherwise elects, such amount shall be
deducted from the investment funds in which the
Participant's Account is invested in the following
order: first from the Fixed Income Fund, next the
Equity Fund, next the Money Market Fund and finally the
Hanson ADS Fund, pursuant to Article 8, at the time the
loan is made provided that amounts will be deducted
last from the Participant's Employer Account. Payroll
deductions made to repay the loan shall be invested in
accordance with the Participant's investment election
under Article 8, which is in effect at the time such
payment is made.
(f) As evidence of a loan, a Participant shall provide an
interest-bearing promissory note to the Committee in
such form as shall be prescribed by the Committee and
bearing the rate of interest determined pursuant to
Section 9.4(c). A Participant's note shall be secured
by the vested portion of his Account. The promissory
note shall be an asset of the Fund which is allocated
to the Loan Account of the Participant. For purposes
of the Plan, such note shall have a fair market value
at any given time equal to the unpaid balance of the
note, plus the amount of any accrued but unpaid
interest.
(g) Notwithstanding any provision herein to the contrary,
if any unpaid balance remains on a loan when a
Participant terminates his employment with the
Employer, the Committee shall deduct the unpaid amount
of the loan plus accrued interest, if any, from the
benefits which become payable to or on behalf of the
Participant under the Plan.
(h) Loans shall be available to all Participants on a
reasonably equivalent basis. The terms of all
Participant loans are subject to the review and
approval of the Committee and the denial of a loan to a
Participant is subject to appeal by the Participant
under Section 13.8.
(i) Notwithstanding the foregoing, no loan shall be made to
a Participant during the period in which the Committee
is making a determination of whether a domestic
relations order affecting the Participant's Account is
a qualified domestic relations order, within the
meaning of Code Section 414(p). Further, if the
Committee is in receipt of a qualified domestic
relations order with respect to any Participant's
Account, it may prohibit such Participant from
obtaining a loan until the alternate payee's rights
under the order are satisfied.
(j) Any trustee fees associated with the loan will be
charged to the Participant's Account.
(k) The Committee shall establish such rules and
regulations as may be necessary to administer loans
hereunder. Specifically, such rules and regulations
shall specify the procedure for applying for Plan
loans, the basis on which loans shall be approved or
denied, the events constituting default and the steps
that will be taken to preserve Plan assets in the event
of default.
ARTICLE 10
ENTITLEMENT TO BENEFITS
10.1 Retirement. A Participant who retires from employment with
the Employer or an Affiliated Employer on or after his Early
Retirement Age shall be entitled to receive a retirement
benefit equal to one hundred percent (100%) of the value of
his Accounts.
10.2 Disability. A Disabled Participant shall be entitled to
receive a disability benefit equal to one hundred percent
(100%) of the value of his Accounts.
10.3 Termination of Employment. A Participant whose employment
with the Employer or an Affiliated Employer is terminated
for any reason other than retirement in accordance with
Section 10.1 or disability in accordance with Section 10.2,
shall be entitled to receive:
(a) one hundred percent (100%) of the value of his Pretax
Account;
(b) one hundred percent (100%) of the value of his Rollover
Account, and
(c) one hundred percent (100%) of the value of the
Qualified Nonelective Contribution subaccount of his
Employer Account; and
(d) a percentage of the value of his Employer Account based
on his Years of Vesting Service in accordance with the
following schedule:
If the Participant's Years The Vested
of Vesting Service are: Portion is
Less than 0%
4 or more 100%
10.4 Vesting on Plan Termination. In the event of termination or
partial termination of the plan, each affected Participant
shall be one hundred percent (100%) vested in his Accounts.
The foregoing sentence shall not apply to a former
participant who has been cashed-out (including those deemed
cashed out under Section 10.7) or who has incurred five (5)
consecutive One Year Breaks in Service.
10.5 Vesting on Disposition of Business. In the event that a
Participant incurs an involuntary Termination due to the
Employer selling, completely liquidating or otherwise
disposing of a complete division or significant segment of
its business, as conclusively determined by the Committee in
its sole discretion, each affected participant shall become
one hundred percent (100%) vested in his Accounts. The
foregoing sentence shall not apply to a former participant
who has been cashed-out (including those deemed cashed out
under Section 10.7).
10.6 Forfeitures. A Participant who does not have a one hundred
percent (100%) nonforfeitable interest in his Employer
Account and whose employment with the Employer or an
Affiliated Employer is terminated under Section 10.3 shall
be deemed to be cashed out and shall forfeit that portion of
his Employer Account in which he does not have a
nonforfeitable interest. Such forfeiture shall be effective
on the Valuation Date coincident with or next following the
Participant's Termination Date. Forfeited amounts shall be
applied to reduce subsequent Employer contributions made
under Section 5.1.
A Participant or former Participant who is subsequently
reemployed by the Employer or an Affiliated Employer prior
to incurring five (5) consecutive One-Year Breaks in Service
shall have the forfeited part of his Employer Account
restored. Upon reemployment, the Employer shall make a
contribution on behalf of such Participant equal to the
amount forfeited, unadjusted for any gains or losses that
may have resulted had the amount not been forfeited.
10.7 Death.
(a) A death benefit shall be payable to the Beneficiary of
a Participant who dies while actively employed by the
Employer or an Affiliated Employer. The death benefit
shall be equal to one hundred percent (100%) of the
value of the Participant's Accounts.
(b) A death benefit shall be payable to the Beneficiary of
a Participant who dies after this Termination Date but
prior to receiving the full value of the nonforfeitable
portion of his Accounts to which he was entitled under
Section 10.1, 10.2 or 10.3, as the case may be. The
death benefit shall be equal to the value of the
undistributed portion of such Accounts.
(c) The value of a Participant's Accounts shall be
determined as of the Valuation Date coincident with or
next following the date of the Participant's death and
distributed in accordance with Sections 11.1 and 11.2.
10.8 Beneficiary. Each Participant shall have the right to
designate, on forms provided by the Committee, one or more
Beneficiaries to receive any amount that may be payable
under the Plan because of such Participant's death.
A Participant shall have the right to revoke or change his
Beneficiary designations at any time. If no Beneficiary is
designated, the Beneficiary cannot be found, or if the
designated Beneficiary is deceased, any amount payable under
the Plan shall be paid to the Spouse, if any, of the
Participant. If the Participant has no Spouse, or if the
Spouse is deceased, any amount payable under the plan shall
be paid to the children of the Participant per capita. If
the Participant has no children, or if the children are
deceased, any amount payable under the Plan shall be paid to
the estate of the Participant.
Notwithstanding the foregoing, the Beneficiary of a
Participant who is legally married at the time of death
shall be the Participant's surviving Spouse unless the
surviving Spouse has consented in writing to the
Participant's designation of another Beneficiary, the
consent acknowledges the effect of the designation, names
the specific Beneficiary or class of Beneficiaries (if
applicable), and the designation is witnessed by a notary
public. Notwithstanding the foregoing, if the Participant
establishes to the satisfaction of the Committee that such
consent cannot be obtained because there is no Spouse or the
Spouse cannot be located, the Spouse will be deemed to have
consented to the designation of such other Beneficiary.
10.9 Small Payments. Notwithstanding Section 10.1, 10.2, 10.3
and 10.6, the Committee shall direct that the value of the
nonforfeitable Accounts of a Participant be immediately
distributed if such value is less than three thousand five
hundred dollars ($3,500). The value of the Accounts shall
be determined as of the Valuation Date coincident with or
next following the date on which the Participant becomes a
Disabled Participant, the Participant's Termination or the
date of the Participant's death, as the case may be, and
shall be distributed as soon as practicable following such
Valuation Date.
10.10 Distributions to an Alternate Payee under Qualified Domestic
Relations Order. Each alternate payee under a Qualified
Domestic Relations order as defined in Section 414(p) of the
Code is entitled to the forms of payment specified under
Section 11.1. Unless specifically provided for under the
Qualified Domestic Relations Order, each alternate payee
shall be treated as a Participant who has incurred a one-year
Break-in-Service regardless of the employment status of
the Participant under the plan for whom benefits have been
assigned to an alternate payee. In no event will the
Qualified Domestic Relations Order be permitted to provide
benefits payable to the alternate payee that are not
provided under the plan.
ARTICLE 11
DISTRIBUTION OF BENEFITS
11.1 Form of Benefit Payment. A Participant shall receive the
value of his Accounts to which he is entitled under the Plan
pursuant to Article 10 through payment to him, in a single
sum, of cash equal to the value of his Accounts.
11.2 Benefit Commencement. The Plan shall make distributions to
Participants and Beneficiaries as soon as practicable after
the Valuation Date coincident with or next following the
Participant's retirement, becoming a Disabled Participant,
Termination Date or death. Any amounts that may be credited
to a Participant's Employer Account after the payment of
value of such Account shall be paid as soon as practicable
after the Valuation Date coincident with such amounts being
credited to the Participant's Employer Account. The
Participant may elect to delay the distribution of his
Accounts payable pursuant to Section 10.1, 10.2 or 10.3,
subject to the requirements of this Section and Section
11.3. If a Participant delays payment hereunder, the Plan
shall make distributions to such a Participant as soon as
practicable after the Valuation Date coincident with or next
following the date the Participant elects to receive his
Accounts.
Notwithstanding the foregoing, unless the Participant elects
otherwise, a distribution from the Plan shall not commence
later than sixty (60) days after the end of the Plan Year in
which the latest of the following occurs:
(a) the Participant attains or would have attained age
sixty-five (65);
(b) the Participant terminates employment with the Employer
and any Affiliated Employer; or
(c) the Participant's fifth (5th) anniversary of
commencement of participation in the Plan.
11.3 Minimum Required Distributions. Notwithstanding any
provision in the Plan to the contrary, all distributions
under the Plan shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the
regulations thereunder, including the incidental death
benefit requirement of IRS Proposed Regulations Section
1.401(a)(9)-2. The provisions in this section override any
distribution options under the Plan if inconsistent with the
requirements of Section 401(a)(9).
(a) Pre-Death Distribution. Distributions to a Participant
shall commence no later than the April 1st of the
calendar year following the calendar year in which a
Participant attains age seventy and one-half (70 and 1/2).
However, if a Participant attained age 70 and 1/2 before
January 1, 1988, distributions to such Participant
shall commence no later than the April 1 following the
calendar year in which such Participant retires.
Distributions shall be made in one of the forms
specified under Section 11.1. In no event shall
distributions be made for a period greater than the
life expectancy of the Participant or joint life
expectancy of the Participant and his Spouse,
determined as of April 1st of the calendar year in
which the Participant attains age 70 1/2 or retires, as
the case may be.
(b) Post-Death Distributions. In the event of the death of
the Participant, any payments due following the death
of the Participant shall be made in accordance with
Section 10.7. In the case of a Participant who has
begun to receive distributions under Section 11.3(a),
distributions shall be made after such Participant's
death at least as rapidly as before his death. In the
case of other Participants, in no event shall
distributions be made later than the end of the
calendar year which contains the fifth (5th)
anniversary of the date of the Participant's death.
11.4 Eligible Rollover Distributions
(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 any time and in the manner
prescribed by the Committee, to have any portion of an
eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee
in a direct rollover.
(b) Definitions.
(1) Eligible rollover distribution. An eligible
rollover distribution is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: any distribution
that is one of a series of substantially equal
periodic payments (not less frequently than
annually) made for the life (or life expectancy)
of the distributee or the joint lives (or joint
life expectancies) of the distributee and the
distributee's designated beneficiary, or for a
specified period of ten years or more; any
distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and
the portion of any distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) Eligible retirement plan. An eligible retirement
plan is an individual retirement account described
in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement
account or individual retirement annuity.
(3) Distributee. A distributee includes an Employee
or former Employee. In addition, the Employee's
or former Employee's surviving Spouse and the
Employee's or former Employee's Spouse or former
Spouse who is the alternate payee under a
qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with
regard to the interest of the Spouse or former
Spouse.
(4) Direct rollover. A direct rollover is a payment
by the Plan to the eligible retirement plan
specified by the distributee.
ARTICLE 12
VOTING EMPLOYER SECURITIES AND TENDER OFFERS
12.1 Voting of Shares. Each Participant shall have the right and
shall be afforded the opportunity to direct the manner in
which Employer Securities held in the Company Stock Fund and
attributable to his account as of the Valuation date
coincident with or preceding the record date shall be voted.
The Employer shall appoint an independent third-part
("Agent") for the purpose of confidentially receiving and
tallying the instructions from Participants. The Agent
shall transmit such instructions solely to the Funding
Agent. Neither the Funding Agent nor the third-party shall
disclose such instructions to the Employer or the Committee
or any officer, director or affiliate. Any Employer
Securities for which a signed voting-direction instrument is
not received from the Participant, or is not subject to
being received, shall be voted by the Funding Agent in the
same proportion as the Employer Securities for which signed
voting-direction instruments are received as to the matter
to be voted upon.
12.2 Tender Offers. A Participant may direct the Funding Agent
in writing how to respond to a tender or exchange offer for
any or all Employer Securities held in the Company Stock
Fund and attributable to his Account as of the Valuation
Date preceding, or coincident with, the offer. A
Participant's instructions hereunder shall be confidential
and shall not be disclosed to the Company or the Committee.
The Committee shall notify each Participant and timely
distribute or cause to be distributed to him such
information as will be distributed to Employer Security
holders in connection with any such tender or exchange
offer. The Committee shall engage an independent third-party
("Agent") to confidentially receive instructions from
Participants and transmit them to the Funding Agent. The
Agent shall transmit solely to the Funding Agent
instructions of Participants and shall not disclose such
instructions to the Company or the Committee. Upon receipt
of such instructions, the Funding Agent shall tender such
Employer Securities as and to the extent so instructed. If
the Funding Agent shall not receive instructions with
respect to a Participant regarding any such tender or
exchange offer for Employer Securities (or shall receive
instructions not to tender or exchange such Employer
Securities, the Funding Agent shall have no discretion in
such matter and shall take no action with respect thereto.
Any Employer Securities for which instructions are not
subject to being received shall be tendered by the Funding
Agent only in the same proportion as the Employer Securities
for which instructions to tender ar received. Any
securities received by the Funding Agent as a result of a
tender shall be held, and any cash so received, shall be
invested in short-term investments for the Account of the
Participant with respect to whom Employer Securities were
tendered pending any reinvestment by the Funding Agent
consistent with the purpose of the Plan.
ARTICLE 13
PLAN ADMINISTRATION
13.1 Appointment of Committee. A Committee consisting of at
least three (3) members shall be appointed by the chief
executive officer to administer the Plan on behalf of the
chief executive officer. Vacancies in the Committee shall
be filled from time to time by appointment of a new
Committee member by the chief executive officer. A member
of the Committee shall hold office until he gives written
notice of his resignation to the chief executive officer,
until death, or until removal by the chief executive
officer.
13.2 Powers and Duties of the Committee.
(a) The Committee shall have full power to administer the
Plan and to construe and apply all of its provisions on
behalf of the Employer. The Committee is the Named
Fiduciary within the meaning of Section 402(a) of ERISA
for purposes of Plan administration. The Committee's
powers and duties, unless properly delegated, shall
include, but shall not be limited to:
(1) Designating agents to carry out responsibilities
relating to the Plan, other than fiduciary
responsibilities.
(2) Deciding questions relating to eligibility,
continuity of employment, and amounts of benefits.
(3) Deciding disputes that may arise with regard to
the rights of Employees, Participants or
Beneficiaries and their legal representatives,
under the terms of the Plan. Decisions by the
Committee will be deemed final in each case.
(4) Obtaining information from the Employer with
respect to its Employees as necessary to determine
the rights and benefits of Participants under the
Plan. The Committee may rely conclusively on such
information furnished by the Employer.
(5) Compiling and maintaining all records necessary
for the Plan.
(6) Authorizing the Funding Agent to make payment of
all benefits as they become payable under the
Plan.
(7) Engaging such legal, administrative, consulting,
investment, accounting, and other professional
services as the Committee deems proper.
(8) Adopting rules and regulations for the
administration of the Plan that are not
inconsistent with the Plan. The Committee may, in
a nondiscriminatory manner, waive the timing
requirements of any notice or other requirements
described in the Plan. Any such waiver will not
obligate the Committee to waive any subsequent
timing or other requirements for other
Participants.
(9) Interpreting and approving Qualified Domestic
Relations Orders, in accordance with Section
414(p) of the Code.
(10) Making non-substantive amendments for the purposes
of maintaining the qualified status of the Plan
only.
(11) Performing other actions provided for in other
parts of this Plan.
(b) The Employer shall have responsibility for, and shall
be the Named Fiduciary for, the following purposes:
(1) Selection of the funding media for the Plan,
including the power to direct investments and to
appoint an investment manager or managers pursuant
to ERISA Section 402(c).
(2) Allocating fiduciary responsibilities, other than
trustee responsibilities as defined in ERISA
Section 405(c), among fiduciaries, and designation
of additional fiduciaries.
(3) Selection of insurance contracts to provide
benefits hereunder, or, if all assets are not held
under insurance contracts, the trustee.
(c) The trustee, if any, shall have responsibility for, and
shall be the Named Fiduciary for the care and custody
of, and, to the extent investment managers are not
appointed by the Employer, management of Plan assets
other than insurance contracts.
13.3 Actions by the Committee. A majority of the members
composing the Committee at any time will constitute a
quorum. The Committee may act at a meeting, or in writing
without a meeting, by the vote or assent of a majority of
its members. The Committee will appoint a Committee
Chairperson and a Secretary. The Secretary will record all
action taken by the Committee. The Committee will have
authority to designate in writing one of its members or any
other person as the person authorized to execute papers and
perform other ministerial duties on behalf of the Committee.
13.4 Interested Committee Members. No member of the Committee
will participate in an action of the Committee on a matter
which applies solely to that member. Such matters will be
determined by a majority of the remainder of the Committee.
13.5 Indemnification. The Employer, by the adoption of this
Plan, indemnifies and holds the members of the Committee,
jointly and severally, harmless from the effects and
consequences of their acts, omissions, and conduct in their
official capacities, except to the extent that the effects
and consequences result from their own willful misconduct,
breach of good faith, or gross negligence in the performance
of their duties. The foregoing right of indemnification
will not be exclusive of other rights to which each such
member may be entitled by any contract or other instrument
or as a matter of law.
13.6 Conclusive of Action. Any action on matters within the
discretion of the Committee will be conclusive, final, and
binding upon all Participants in the Plan and upon all
person claiming any rights, including Beneficiaries.
13.7 Payment of Expenses. The members of the Committee will
serve without compensation for their services. The
compensation or fees of consultants, actuaries, accountants,
counsel and other specialists and any other costs of
administering the Plan or Fund, will be paid by the
Employer.
13.8 Claim Procedure. Any Participant or Beneficiary may submit
a written application to the Committee for payment of any
benefit that may be due him under the Plan. Such
application shall set forth the nature of the claim and any
information as the Committee may reasonably request. Upon
receipt of any such application, the Committee shall
determine whether or not the Participant or Beneficiary is
entitled to the benefit hereunder.
If a claim is denied, in whole or in part, the Committee
shall give written notice to any Participant or Beneficiary
of the denial of a claim for the commencement, continuation
or calculation of amount of retirement benefits under the
Plan. The notice shall be given within ninety (90) days
after receipt of the Participant's or Beneficiary
application unless special circumstances require an
extension for processing the claim. In no event shall such
extension exceed a period of ninety (90) days from the end
of such initial review period. The notice will be delivered
to the claimant or sent to the claimant's last known
address, and will include the specific reason or reasons for
the denial, a specific reference or references to pertinent
Plan provisions on which the denial is based, a description
of any additional material or information for the claimant
to perfect the claim, which will indicate why such material
or information is needed, and an explanation of the Plan's
claims review procedure.
If the claimant wishes to appeal the claim's denial, the
claimant or a duly authorized representative will file a
written request with the Committee for a review. This
request must be made by the claimant within sixty (60) days
after receiving notice of the claim's denial. The claimant
or representative may review pertinent documents relating to
the claim and its denial, may submit issues and comments in
writing to the Committee and may request a hearing. Within
sixty (60) days after receipt of such a request for review,
the Committee shall reconsider the claim, and if the
claimant shall have so requested, shall afford the claimant
or his representative a hearing before the Committee and
make a decision on the merits of the claim. If
circumstances require an extension of time for processing
the claim, the sixty (60) day period may be extended but in
no event more than one hundred and twenty (120) days after
the receipt of a request for review. The decision on review
will be in writing and include specific reasons and
references to the pertinent Plan provisions on which the
decision is based.
ARTICLE 14
ESTABLISHMENT OF FUND
14.1 Funding Agreement. Contributions made by the Employer and
Participants pursuant to Articles 4 and 5 hereof shall be
held in a Fund or Funds. The Employer shall enter into a
trust arrangement, or a combination of a trust arrangement
and insurance company contract(s), with one or more Funding
Agents providing for the administration of the Fund or Funds
in which the assets of this Plan are held.
ARTICLE 15
AMENDMENT, TERMINATION AND MERGER OF THE PLAN
15.1 Right to Amend the Plan. The Board reserves the right to
modify, alter or amend this Plan from time to time to any
extent that it may deem advisable including, but without
limiting the generality of the foregoing, any amendment
deemed necessary to ensure the continued qualification of
the Plan under Section 401 of the Code or the appropriate
provisions of any subsequent revenue law. No such amendment
shall increase the duties or responsibilities of a Funding
Agent without its consent thereto in writing. No such
amendments(s) shall have the effect of reinvesting in the
Employer the whole or any part of the principal or income
for purposes other than for the exclusive benefit of
Participants or Beneficiaries at any time prior to the
satisfaction of all the liabilities under the plan with
respect to such persons. No amendment shall reduce a
Participant's Account balance on the effective date of the
Plan amendment or eliminate an optional form of benefit
under the Plan with respect to the Participant's Account
balance on the date of the amendment.
15.2 Right to Terminate the Plan. The Board shall have the right
to terminate this Plan at any time. In the event of such
termination all affected Participants shall be vested as
provided in Section 10.4.
15.3 Plan Mergers, Consolidations and Transfers. The Plan shall
not be automatically terminated by the Employer's
acquisition by or merger into any other company, trade or
business, but the Plan shall be continued after such merger
provided the successor employer agrees to continue the Plan
with respect to affected Participants herein. All rights to
amend, modify, suspend or terminate the Plan with respect to
Participants of the Employer shall be transferred to the
successor employer, effective as of the date of the merger
of acquisition. The merger of consolidation with, or
transfer of the allocable portion of the assets and
liabilities of the Fund to any other qualified retirement
plan trust shall be permitted only if the benefit each Plan
Participant would receive, if the Plan were terminated
immediately after such merger or consolidation, or transfer
of the allocable portion of the assets and liabilities,
would be at least as great as the benefit he would have
received had this plan been terminated immediately before
the date of merger, consolidation or transfer.
15.4 Amendment of Vesting Schedule. If the vesting provisions of
this plan are amended, including an amendment caused by the
expiration of top-heavy status under the terms of Article
16, Participants with three (3) or more Years of Service, or
three (3) or more years of employment, whether or not
consecutive, at the later of the date the amendment is
adopted or becomes effective, shall automatically be vested,
from that point forward, in the greater of the amount vested
under the vesting schedule as amended or the amount vested
under the vesting schedule prior to amendment.
ARTICLE 16
TOP-HEAVY PLAN REQUIREMENTS
16.1 General Rule. For any Plan Year for which the Plan is a
Top-Heavy Plan as defined in Section 16.5, any other
provisions of the Plan to the contrary notwithstanding, the
Plan shall be subject to the provisions of this Article 16.
16.2 Vesting Provision. Each Participant who has completed an
Hours of Service during the Plan Year in which the Plan is a
Top-Heavy Plan and has completed the number of Years of
Vesting Service specified in the following table, shall have
a nonforfeitable right to the percentage of his Employer
Account (other than the Qualified Nonelective Contribution
subaccount) under this Plan, in accordance with the
following table:
The Vested
Years of Vesting Service Portion Is
Less than 2 years 0%
2 years but less than 3 years 20%
3 years but less than 4 years 40%
4 or more 100%
Each Participant's vested portion of his Employer Account
shall not be less than his vested Employer Account
determined as of the last day of the last Plan Year in which
the Plan was not a Top-Heavy Plan. If the Plan ceases to be
a Top-Heavy Plan, an Employee with three or more years of
employment, whether or not consecutive, shall have the
vested portion of his Employer Account determined either in
accordance with this Section 16.2 or Section 10.3, as
provided in Section 15.4.
16.3 Minimum Contribution Provisions. Each Eligible Employee who
(i) is a non-key employee, as defined in Section 16.7, and
(ii) is employed on the last day of the Plan Year, even if
such Participant has failed to complete one thousand (1,000)
Hours of Service during such Plan Year, shall be entitled to
have an Employer contribution of not less than three percent
(3%) of the Participant's compensation, as defined for
purposes of Section 415 of the Code, allocated to his
Employer Account.
The minimum contribution percentage set forth above shall be
reduced for any Plan Year to the percentage at which
contributions are made under the Plan for the Plan Year for
the key employee, as defined in Section 16.7, for whom such
percentage is the highest for such Plan Year. For this
purpose, the percentage with respect to a key employee shall
be determined by dividing the contributions for such key
employee by his compensation, as defined for purposes of
Section 415 of the Code.
Contributions taken into account under the immediately
preceding sentence shall include contributions under the
Plan, including Pretax Contributions, and under all other
defined contribution and defined benefit plans required to
be included in an aggregation group, as defined in
Subsection 16.5(c), but shall not include any plan required
to be included in such aggregation group if such plan
enables a defined benefit plan required to be included in
such group to meet the requirements of Sections 401(a)(4)
and 410 of the Code.
Contributions taken into account under this Section 16.3
shall not include any contributions under Social Security or
any other federal or state law.
16.4 Coordination with Other Plans. In the event that another
defined contribution plan or defined benefit plan maintained
by the Employer or any Affiliated Employer provides
contributions or benefits on behalf of Participants in the
Plan, such other plan shall be treated as part of this plan
pursuant to applicable principles (such as Rev. Rul. 81-202
or any successor ruling) in determining whether this Plan
satisfied the requirements of Section 16.2 and 16.3.
16.5 Top-Heavy Plan Definition. The Plan shall be a Top-Heavy
Plan for any Plan Year if, as of the determination date, as
defined in Subsection (a), the aggregate of the Accounts
under the Plan for Participants who are key employees, as
defined in section 16.7, exceeds sixty percent (60%) of the
present value of the aggregate of the Accounts for all
Participants, or if this plan is required to be in an
aggregation group, as defined in subsection (c), which for
such Plan Year is a top-heavy group, as defined in
Subsection (d). For purposes of making this determination,
the Accounts of a Participant (i) who is not a key employee
but who was a key employee in a prior Plan Year or (ii) who
has not performed any service for the Employer at any time
during the five (5) year period ending on the determination
date, shall be disregarded.
(a) "Determination Date" means for any Plan Year the last
day of the immediately preceding Plan Year.
(b) The present value shall be determined as of the most
recent Valuation Date that is within the twelve (12)
month period ending on the determination date, and as
described in the regulations prescribed under the Code.
Present values for purposes of determining whether this
plan is a Top Heavy Plan shall be based on the
following interest and mortality rates:
(i) Interest Rate: 7.5%
(ii) Mortality Rate: 1983 Group Annuity Mortality
(c) "Aggregation Group" means the group of plans, if any,
that includes both the group of plans that are required
to be aggregated and the group of plans that are
permitted to be aggregated.
(1) The group of plans that are required to be
aggregated, the "required aggregation group",
includes
(i) each plan of an Affiliated Employer, in which
a key employee is a participant, including
collectively bargained plans, and
(ii) each other plan of an Affiliated Employer,
including collectively bargained plans, which
enables a plan in which a key employee is a
participant to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
(2) The group of plans that are permitted to be aggregated,
the "permissive aggregation group", includes the
required aggregation group plus one (1) or more plans
of an Affiliated Employer, that is not part of the
required aggregation group and that the Committee
certifies as constituting a plan within the permissive
aggregation group. Such plan or plans may be added to
the permissive aggregation group only if benefits are
comparable to those provided by the plans in the
required aggregation group and, if after the addition,
the aggregation group as a whole continues to meet the
requirements of Sections 401(a)(4) and 410 of the Code.
(d) "Top-Heavy Group" means the aggregation group, if, as
of the applicable determination date, the sum of the
present value of the cumulative accrued benefits for
key employees under all defined benefit plans included
in the aggregation group plus the aggregate of the
accounts of key employees under all defined
contribution plans included in the aggregation group
exceeds sixty percent (60%) of the aggregate accrued
benefits and accounts for all employees under such
defined benefit and defined contribution plans. If the
aggregation group that is a top-heavy group is a
required aggregation group, each plan in the group will
be top heavy. If the aggregation group that is a
top-heavy group is a permissive aggregation group, only
those plans that are part of the required aggregation
group will be treated as top heavy. If the aggregation
group is not a top-heavy group, no plan within such
group will be top heavy.
(e) In determining whether the Plan constitutes a Top-Heavy
Plan, the Committee shall make the following
adjustments in connection therewith:
(1) When more than one (1) plan is aggregated, the
Committee shall determine separately for each plan
as of each plan's determination date the present
value of the accrued benefits and account
balances. The results shall then be aggregated by
adding the results of each plan as of the
determination dates for such plans that fall
within the same calendar year.
(2) In determining the present value of the cumulative
accrued benefits or the value of the account of
any Employee, such present value or account shall
include the amount in dollars value of the
aggregate distributions made to such Employee
under the applicable plan during the five (5) year
period ending on the determination date, unless
reflected in the value of the accrued benefit or
account balances as of the most recent Valuation
Date. Such amounts shall include distributions to
employees which represented the entire amount
credited to their accounts under the applicable
plan, and distributions made on account of the
death of an employee to the extent such death
benefits do not exceed the present value of the
account.
(3) Further, in making such determination, such
present value or account shall include any
Rollover Contribution, or similar transfer, as
follows:
(i) If the Rollover Contribution, or similar
transfer, is initiated by the Employee and
made to or from a plan maintained by another
employer, the plan providing the distribution
shall include such distribution in the
present value or account; the plan accepting
the distribution shall not include such
distribution in the present value or account
unless the plan accepted it before December
31, 1983.
(ii) If the Rollover Contribution, or similar
transfer, is not initiated by the Employee or
made from a plan maintained by an Affiliated
Employer, the plan accepting the distribution
shall include such distribution in the
present value or account whether the plan
accepted the distribution before or after
December 31, 1983; the plan making the
distribution shall not include the
distribution in the present value or such
account.
16.6 Change in 415(e) Limits. In the event the Employer also
maintains a defined benefit plan that provides benefits to
Participants in this Plan, and if the Plan is a Top-Heavy
Plan, the combined plan limit of Section 415(e) of the Code
shall be applied by substituting "1.0" for "1.25" in Code
Sections 415(3)(2)(B) and 415(e)(3)(b). However, this
provision does not apply if the Plan would not be a Top-Heavy Plan
if "ninety percent (90%)" were substituted for
"sixty percent (60%)" in Section 16.5 or if the Plan
provides an Employer Contribution under Section 16.3 of not
less than four percent (4%) of the Participant's
compensation, as defined for purposes of Section 415 of the
Code.
16.7 Key Employee. The term "key employee' means any Employee,
including former Employees under the Plan who, at any time
during the Plan Year containing the determination date or
during any of the four (4) preceding Plan Years, is or was
one of the following:
(a) An officer of an Affiliated Employer, having annual
compensation from the Affiliated Employer greater than
fifty percent (50%) of the dollar amount in effect
under Code Section 415(b)(1)(A). Whether an individual
is an officer shall be determined by the Committee on
the basis of all the facts and circumstances, such as
an individual's authority, duties and term of office,
not on the mere fact that the individual has the title
of an officer. For any such Plan Year, there shall be
treated as officers no more than the lesser of (i)
fifty (50) Employees, or (ii) the greater of three (3)
Employees or ten percent (10%) of the greatest number
of Employees.
For this purpose, the highest paid officers shall be
selected.
(b) One of the ten (10) Employees having annual
compensation greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) and owning (or
considered as owning, within the meaning of the
constructive ownership rules of the Code) more than
one-half percent (.5%) interest in the value and the
largest percentage interests in an Affiliated Employer.
An Employee who has such an ownership interest is
considered to have one (1) of the largest interests in
the Affiliated Employer unless at least ten (10) other
Employees own a greater interest than that Employee
during any year in the testing period and such other
employees have annual compensation during such Plan
Year of ownership greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the Plan
Year. Ownership shall be determined on the basis of
percentage of ownership interest in total ownership
value and not dollar amounts.
(c) Any person who owns (or is considered as owning within
the meaning of the constructive ownership rules of the
Code) more than five percent (5%) of the outstanding
stock of an Affiliated Employer or possessing more than
fiver percent (5%) of the combined total voting power
of an Affiliated Employer.
(d) A one percent (1%) owner of the outstanding stock of an
Affiliated Employer having an annual compensation from
the Affiliated Employer of more than one hundred fifty
thousand dollars ($150,000).
For purposes of this Section 16.7, compensation shall mean
compensation as defined in Section 414(q)(7) of the Code.
For purposes of Subsections (a), (b), (c) and (d) of this
definition, a Beneficiary of a key employee shall be treated
as a key employee. For purposes of Subsections (c) and (d),
each Affiliated Employer is treated separately in
determining ownership percentages; but in determining the
amount of compensation, each Affiliated Employer is taken
into account.
16.8 Non-Key Employee. The term "non-key employee" means any
employee and any Beneficiary of an employee who is not a key
employee.
16.9 Collective Bargaining Rules. The provisions of Sections
16.2, 16.3 and 16.4 do not apply with respect to any
Employee included in a unit of employees covered by a
collective bargaining agreement unless the application of
such Sections has been agreed upon with the collective
bargaining agent.
ARTICLE 17
MISCELLANEOUS
17.1 Limitation on Distributions. Notwithstanding any provision
of this Plan regarding payment to Beneficiaries or
Participants, or any other person, the Committee may
withhold payment to any person if the Committee determines
that such payment may expose the Plan to conflicting claims
for payment. As a condition for any payments, the Committee
may require such consent, representations, releases, waivers
or other information as it deems appropriate. The Committee
may, in its discretion, comply with the terms of any
judgment or other judicial decree, order, settlement or
agreement including, but not limited to, a Qualified
Domestic Relations Order as defined in Code Section 414(p).
17.2 Limitation on Reversion of Contributions. Except as
provided in subsections (a) through (c) below, Employer
contributions made under the plan will be held for the
exclusive benefit of Participants or Beneficiaries and may
not revert to the Employer.
(a) A contribution made by the Employer under a mistake of
fact may be returned to the Employer within one (1)
year after it is contributed to the Plan.
(b) A contribution conditioned on the Plan's initial
qualification under Sections 401(a) and 501(a) of the
Code may be returned to the Employer, if the Plan does
not qualify, within one (1) year after the date the
Plan is denied qualification.
(c) A contribution conditioned upon its deductibility under
Section 404 of the Code may be returned, to the extent
the deduction is disallowed, to the Employer within one
(1) year after the disallowance.
The maximum contribution that may be returned to the
Employer will not exceed the amount actually contributed to
the Plan, or the value of such contribution on the date it
is returned to the Employer, if less.
17.3 Voluntary Plan. The Plan is purely voluntary on the part of
the Employer and neither the establishment of the Plan nor
any Plan amendment nor the creation of any fund or account,
nor the payment of any benefits will be construed as giving
any Employee or any person legal or equitable right against
the Employer, any trustee or other Funding Agent, or the
Committee unless specifically provided for in this Plan or
conferred by affirmative action of the Committee or the
Employer according to the terms and provisions of this Plan.
Such actions will not be construed as giving any Employee or
Participant the right to be retained in the service of the
Employer. All Employees and/or Participants will remain
subject to the discharge to the same extent as through this
Plan had not been established.
17.4 Nonalienation of Benefits. Participants and Beneficiaries
are entitled to all the benefits specifically set out under
the terms of the plan, but neither those benefits nor any of
the property rights in the plan are assignable or
distributable to any creditor or other claimant of a
Participant or Beneficiary. A Participant will not have the
right to anticipate, assign, pledge, accelerate, or in any
way dispose of or encumber any of the monies or benefits or
other property that may be payable or become payable to such
Participant or his Beneficiary provided, however, the
Committee shall recognize and comply with a valid Qualified
Domestic Relations Order as defined in Code Section 414(p).
17.5 Inability to Receive Benefits. If the Committee receives
evidence that a person entitled to receive any payment under
the Plan is physically or mentally incompetent to receive
payment and to give a valid release, and another person or
any institution is maintaining or has custody of such
person, and no guardian, committee, or other representative
of the estate of such person has been duly appointed by a
court of competent jurisdiction, then any distribution made
under the Plan may be made to such other person or
institution. The release of such other person or
institution will be a valid and complete discharge for the
payment of such distribution.
17.6 Missing Person. If the Committee is unable, after
reasonable and diligent effort, to locate a Participant or
Beneficiary where no contingent beneficiary is provided
under the Plan, who is entitled to a distribution under the
Plan, the distribution due such person will be forfeited
after five (5) years. If, however, such a person later
files a claim for such benefit, it will be reinstated
without any interest earned thereon. In the event that a
distribution is due to a Beneficiary where a contingent
beneficiary is provided under the Plan (including the
situation in which the contingent beneficiary is the
Participant's estate), and the Committee is unable, after
reasonable and diligent effort, to locate the Beneficiary,
the benefit shall be payable to the contingent beneficiary,
and such non-locatable Beneficiary shall have no further
claim or interest hereunder. Notification by certified or
registered mail to the last known address of the Participant
or Beneficiary will be deemed a reasonable and diligent
effort to locate such person.
17.7 Limitation of Third Party Rights. Nothing expressed or
implied in the Plan is intended or will be construed to
confer upon or give to any person, firm, or association
other than the Employer, the Participants or Beneficiaries,,
and their successors in interest, any right, remedy, or
claim under or by reason of this Plan except pursuant to a
Qualified Domestic Relations Order as defined in Code
Section 414(p).
17.8 Invalid Provisions. In case any provision of this Plan is
held illegal or invalid for any reason, the illegality or
invalidity will not affect the remaining parts of the Plan.
The Plan will be construed and enforced as if the illegal
and invalid provisions had never been included.
17.9 One Plan. This Plan may be executed in any number of
counterparts, each of which will be deemed an original and
the counterparts will constitute one and the same instrument
and may be sufficiently evidenced by any one counterpart.
17.10 Use and Form of Words. Whenever any words are used herein
in the masculine gender, they will be construed as though
they were also used in the feminine gender in all cases
where that gender would apply, and vice versa. Whenever any
words are used herein in the singular form, they will be
construed as though they were also used in the plural form
in all cases where the plural form would apply, and vice
versa.
17.11 Headings. Headings to Articles and Sections are inserted
solely for convenience and reference, and in the case of any
conflict, the text, rather than the headings, shall control.
17.12 Governing Law. The Plan will be governed by and construed
according to the federal laws governing employee benefit
plans qualified under the Code and according to the laws of
the state of West Virginia where such laws are not in
conflict with the federal laws.
EXHIBIT 4(f)
ZURN RETIREMENT SAVINGS PLAN
Amended and Restated as of June 1, 1998
<PAGE>
ZURN RETIREMENT SAVINGS PLAN
The Zurn Retirement Savings Plan (the "Plan"), as herein set forth,
is an amendment and restatement as of June 1, 1998 of the Plan
effective March 1, 1991.
This amendment and restatement of the Plan shall constitute an
amendment, restatement and continuation of the Plan. Although this
amendment and restatement is generally effective June 1, 1998,
certain provisions of this amendment and restatement are effective
as of some other date. Events occurring before the applicable
effective date of any provision of this amendment and restatement
shall be governed by the applicable provision of the Plan in effect
on the date of the event.
The rights of any person who terminated employment or who retired
on or before the effective date of any particular provision of the
Plan, including his eligibility for benefits, shall be determined
solely under the terms of the Plan as in effect on the date of his
termination of employment or retirement, unless such person is
thereafter reemployed and again becomes a Participant; provided,
however, that the time and form in which benefits, if any, will be
paid, shall be determined under the terms of the Plan as in effect
on the date benefits commence.
The Plan is intended to comply with the provisions of the Employee
Retirement Income Security Act of 1974, and to qualify under
Section 401(a) of the Internal Revenue Code of 1986, as amended,
and under any rulings or regulations pursuant thereto adopted by
the Department of Labor and/or the Department of the Treasury.
<PAGE>
ZURN RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
PAGE
Article 1. Definitions
1.01 Accounts . . . . 1
1.02 Actual Contribution Percentage . . . . . . . . . 1
1.03 Actual Deferral Percentage. . . . . . . . . . 1
1.04 Adjustment Factor . . . . . . . . . . . . . . 2
1.05 Affiliated Employer . . . . . . . . . . . . . 2
1.06 Alternate Payee . . . . . . . . . . . . . . . 2
1.07 Annuity Starting Date . . . . . . . . . . . . 2
1.08 Beneficiary. . 2
1.09 Board of Directors. . . . . . . . . . . . . . 3
1.10 Break in Service. . . . . . . . . . . . . . . 3
1.11 Code. . . . . . 3
1.12 Common Stock . 3
1.13 Company. . 4
1.14 Compensation . 4
1.15 Contribution Limit. . . . . . . . . . . . . . 5
1.16 Covered Employee. . . . . . . . . . . . . . . 5
1.17 Deferred Account. . . . . . . . . . . . . . . 5
1.18 Deferred Cash Contributions . . . . . . . . . 5
1.19 Disability . . 5
1.20 Earnings . . . . 6
1.21 Earnings Per Share. . . . . . . . . . . . . . 6
1.22 Employee . . . 6
1.23 Employee Account . . . . . . . . . . . . . . . . 6
1.24 Employer . . . . 7
1.25 Employer Account. . . . . . . . . . . . . . . 7
1.26 Employer Matching Contributions . . . . . . . 7
1.27 Enrollment Date . . . . . . . . . . . . . . . 7
1.28 ERISA . . . . . 7
1.29 Fiduciary. . . . 7
1.30 Fiscal Year. . 8
1.31 Fund or Investment Fund . . . . . . . . . . . 8
1.32 Highly Compensated Employee . . . . . . . . . 8
1.33 Hour of Service . . . . . . . . . . . . . . . 10
1.34 Hypothetical Tax Deduction. . . . . . . . . . 12
1.35 Interactive Electronic Communication. . . . . 12
1.36 International Work Assignment Agreement 12
1.37 Leased Employee. . . . . . . . . . . . . . . . . 12
1.38 Member . . 13
1.39 Normal Retirement Age . . . . . . . . . . . . 13
1.40 Notice . . 13
1.41 Pension Committee. . . . . . . . . . . . . . . . 14
1.42 Plan . . . 14
1.43 Plan Year. . . . 14
1.44 Regular Match. 14
1.45 Rollover Account. . . . . . . . . . . . . . . 14
1.46 Rollover Contributions. . . . . . . . . . . . 14
1.47 Spousal Consent . . . . . . . . . . . . . . . 14
1.48 Statutory Compensation. . . . . . . . . . . . 15
1.49 Supplemental Match. . . . . . . . . . . . . . 15
1.50 Trustee. . 15
1.51 USI Merger Transaction . . . . . . . . . . . . . 16
1.52 U.S. Industries. . . . . . . . . . . . . . . . . 16
1.53 U.S. Industries Stock. . . . . . . . . . . . . . 16
1.54 U.S. Industries Stock Fund . . . . . . . . . . . 16
1.55 Valuation Date. . . . . . . . . . . . . . . . 16
1.56 Vested Portion. . . . . . . . . . . . . . . . 16
1.57 Year of Eligibility Service . . . . . . . . . 16
1.58 Year of Vesting Service . . . . . . . . . . . 16
1.59 Zurn Stock Fund . . . . . . . . . . . . . . . 17
Article 2. Eligibility and Membership
2.01 Eligibility. . . 18
2.02 Membership . . . 18
2.03 Transferred Members. . . . . . . . . . . . . . . 19
2.04 Termination of Membership. . . . . . . . . . . . 19
Article 3. Contributions
3.01 Deferred Cash Contributions. . . . . . . . . . . 20
3.02 Employer Matching Contributions (Effective April 1, 1997
through March 31, 1998). . . . . . . . . . . . . 23
3.02A Employer Matching Contributions (Effective April 1, 1998) 26
3.03 Rollover Contributions . . . . . . . . . . . . . 28
3.04 Change in Contributions. . . . . . . . . . . . . 28
3.05 Suspension of Contributions. . . . . . . . . . . 29
3.06 Limitations Affecting Highly
Compensated Employees . . . . . . . . . . . . 29
3.07 Maximum Annual Additions . . . . . . . . . . . . 34
3.08 Return of Contributions. . . . . . . . . . . . . 37
Article 4. Investment of Contributions and Accounts; Valuation
4.01 Investment Funds . . . . . . . . . . . . . . . . 39
4.02 Investment of Members' Accounts. . . . . . . . . 39
4.03 Responsibility for Investments . . . . . . . . . 40
4.04 Change of Election . . . . . . . . . . . . . . . 40
4.05 Reallocation of Accounts Among the Funds 40
4.06 Diversification Election on Employer Account 41
4.07 Limitation Imposed by Contract . . . . . . . . . 41
4.08 Valuation of the Investment Funds. . . . . . . . 42
4.09 Discretionary Power of the Pension Committee 42
4.10 Statement of Accounts. . . . . . . . . . . . . . 42
Article 5. Employer Stock Fund
5.01 Zurn Stock Fund. . . . . . . . . . . . . . . . . 43
5.02 U.S. Industries Stock Fund . . . . . . . . . . . 44
5.03 Restrictions on Transfer and Withdrawal of
Amounts Invested in Zurn Stock Fund or
U.S. Industries Stock Fund . . . . . . . . . . . 45
5.04 Voting on Common Stock . . . . . . . . . . . . . 46
Article 6. Vested Portion of Accounts
6.01 Deferred Account and Rollover Account. . . . . . 49
6.02 Employer Account . . . . . . . . . . . . . . . . 49
6.03 Forfeitures and Restoration. . . . . . . . . . . 49
Article 7. Withdrawals While Still Employed
7.01 Withdrawal of Rollover Contributions . . . . . . 52
7.02 Withdrawal After Age 59-1/2. . . . . . . . . . . 52
7.03 Hardship Withdrawal. . . . . . . . . . . . . . . 52
7.04 Procedures and Restrictions. . . . . . . . . . . 55
Article 8. Loans to Members
8.01 Amount Available . . . . . . . . . . . . . . . . 56
8.02 Terms . . . . . 57
Article 9. Distribution of Accounts Upon Termination of Employment
9.01 Eligibility. . . 59
9.02 Form of Distribution. . . . . . . . . . . . . 59
9.03 Date of Payment of Distribution . . . . . . . 59
9.04 Required Distributions. . . . . . . . . . . . 62
9.05 Distributions Under a Qualified Domestic
Relations Order . . . . . . . . . . . . . . . 63
9.06 Status of Accounts Pending Distribution 64
9.07 Proof of Death and Right of Beneficiary
or Other Person. . . . . . . . . . . . . . 64
9.08 Distribution Limitation . . . . . . . . . . . 65
Article 10. Administration of Plan
10.01 Appointment of Pension Committee. . . . . . . 66
10.02 Powers of Pension Committee . . . . . . . . . 66
10.03 Individual Accounts . . . . . . . . . . . . . 68
10.04 Meetings . . . . 69
10.05 Action of Majority. . . . . . . . . . . . . . 69
10.06 Compensation and Bonding. . . . . . . . . . . 69
10.07 Prudent Conduct . . . . . . . . . . . . . . . 70
10.08 Service in More Than One Fiduciary Capacity 70
10.09 Limitation of Liability . . . . . . . . . . . 70
10.10 Indemnification . . . . . . . . . . . . . . . 70
10.11 Delegation of Fiduciary Responsibility 71
Article 11. Management of Funds
11.01 Trust Agreement . . . . . . . . . . . . . . . 72
11.02 Exclusive Benefit Rule. . . . . . . . . . . . 72
11.03 Appointment of Investment Manager . . . . . . 72
11.04 Expenses of Plan. . . . . . . . . . . . . . . 73
Article 12. General Provisions
12.01 Nonalienation. 74
12.02 Conditions of Employment Not Affected by Plan 74
12.03 Facility of Payment . . . . . . . . . . . . . 74
12.04 Information. . 75
12.05 Construction . 75
12.06 Benefit Claim Appeals . . . . . . . . . . . . 75
12.07 Severability . 77
12.08 Employer Records. . . . . . . . . . . . . . . 77
12.09 Application of Plan Provisions. . . . . . . . 77
12.10 IRC 414(u) Compliance Provision . . . . . . . 77
Article 13. Amendment, Merger and Termination
13.01 Amendment of Plan . . . . . . . . . . . . . . 78
13.02 Merger, Consolidation or Transfer . . . . . . 78
13.03 Additional Participating Employer . . . . . . 79
13.04 Termination of Plan . . . . . . . . . . . . . 80
13.05 Distribution of Accounts Upon a Sale of Assets 80
13.06 Distribution of Accounts Upon a Sale of
a Subsidiary . 81
Article 14. Top-Heavy Provisions
14.01 Top-Heaviness Defined . . . . . . . . . . . . 82
14.02 Employer Contributions. . . . . . . . . . . . 86
<PAGE>
ZURN RETIREMENT SAVINGS PLAN
As Amended and Restated as of June 1, 1998
Article 1. Definitions
1.01 "Accounts" means accounts held under the Plan for a Member,
consisting of, to the extent applicable, his Deferred Account,
Employer Account and Rollover Account.
1.02 "Actual Contribution Percentage" means, with respect to a
specified group of Employees who during a given Plan Year were
Covered Employees, the average of the ratios, calculated
separately for each Covered Employee in that group, of (a) the
amount of Employer Matching Contributions for that Plan Year,
to (b) his Statutory Compensation for that Plan Year (Statutory
Compensation shall only be counted if received during the
period a Covered Employee is a Member or is eligible to become
a Member). The Actual Contribution Percentage for each group
and the ratio determined for each Covered Employee in the group
shall be calculated to the nearest one-hundredth of one
percent.
1.03 "Actual Deferral Percentage" means, with respect to a
specified group of Employees who during a given Plan Year were
Covered Employees, the average of the ratios, calculated
separately for each Covered Employee in that group, of (a) the
amount of Deferred Cash Contributions made pursuant to Section
3.01 for that Plan Year (whether or not such Contributions are
returned to the Member pursuant to Section 3.01(c)), to (b) the
Covered Employee's Statutory Compensation for that Plan Year
(Statutory Compensation shall only be counted if received
during the period a Covered Employee is a Member or is eligible
to become a Member). The Actual Deferral Percentage for each
group and the ratio determined for each Covered Employee in the
group shall be calculated to the nearest one-hundredth of one
percent.
1.04 "Adjustment Factor" means the cost of living adjustment
factor prescribed by the Secretary of the Treasury under
Section 415(d) of the Code and applied to such items and in
such manner as the Secretary shall provide.
1.05 "Affiliated Employer" means any company not participating in
the Plan which is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) which
also includes as a member the Employer; any trade or business
under common control (as defined in Section 414(c) of the Code)
with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the
Employer; and any other entity required to be aggregated with
the Employer pursuant to regulations under Section 414(o) of
the Code. Notwithstanding the foregoing sentence, for purposes
of Section 3.07, the definitions in Sections 414(b) and (c) of
the Code shall be modified as provided in Section 415(h) of the
Code.
1.06 "Alternate Payee" means any spouse, former spouse, child or
other dependent of a Member who is recognized by a qualified
domestic relations order (within the meaning of Section 414(p)
of the Code) as having a right to receive all, or a portion of,
the Member's Accounts under the Plan.
1.07 "Annuity Starting Date" means the first day on which all
events have occurred which entitle a Member to a distribution
under Article 9 hereof.
1.08 "Beneficiary" means any person, persons or entity named by a
Member by written designation filed with the Pension Committee
to receive benefits payable in the event of the Member's death;
provided, however, if the Member is married, his spouse shall
be deemed to be the Beneficiary unless or until he elects
another Beneficiary by a written designation filed with the
Pension Committee which designation shall not be effective
without Spousal Consent. If no such designation is in effect
at the time of death of the Member, or if no person, persons or
entity so designated shall survive the Member, the Member's
surviving spouse, if any, shall be deemed to be the
Beneficiary; otherwise, the Beneficiary shall be the estate of
the Member.
1.09 "Board of Directors" means the Board of Directors of the
Company.
1.10 "Break in Service" shall mean a Plan Year during which an
Employee fails to complete more than 500 Hours of Service;
provided, however, that, solely for purposes of determining
whether a Break in Service has occurred, an Employee who is
absent from work due to the Employee s pregnancy, the birth of
the Employee s child, the placement of a child with the
Employee in connection with the adoption of that child by the
Employee or for purposes of caring for that child for a period
immediately following that birth or placement shall be deemed
to have completed Hours of Service equal to the number of Hours
of Service such Employee would normally have completed but for
such absence provided that any Hours of Service credited for
any single such absence shall not include more than 501 Hours
of Service which shall be applied:
(a) with respect to an Employee who would otherwise incur a
Break in Service, to the Plan Year in which such absence
commenced; or
(b) with respect to any other Employee, to the Plan Year
immediately following the Plan Year in which such absence
commenced.
The House of Service credit under the preceding sentence shall
apply only to the extent that the Employee is not otherwise
provided with service credit under procedures adopted by the
Employer in response to The Family and Medical Leave Act of
1993.
1.11 "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
1.12 "Common Stock" means, for periods on and after February 1,
1996 and before the consummation of the USI Merger Transaction,
the common stock, $0.50 par value, of Zurn Industries, Inc.
and, for periods on and after the USI Merger Transaction, U.S.
Industries Stock. Common Stock is a qualifying employer
security within the meaning of Section 407(d)(5) of ERISA.
1.13 "Company" means Zurn Industries, Inc. or any successor by
merger, purchase or otherwise.
1.14 "Compensation" means the basic cash remuneration paid by an
Employer to an Employee for services rendered to the Employer,
determined prior to any Hypothetical Tax Deduction or any
reduction pursuant to Section 3.01 or pursuant to a cafeteria
plan as described in Section 125 of the Code. Compensation
shall include overtime pay, vacation pay, severance pay, sick
pay (paid through payroll) and sales commissions, and shall
exclude bonuses, incentive pay and all other forms of special
pay. In no event shall the amount of Compensation taken into
account under the Plan for any Plan Year exceed the adjusted
annual limitation permitted under Section 401(a)(17) of the
Code for such Plan Year. Such adjusted annual limitation shall
be, for each Plan Year beginning on and after the Plan's
effective date of March 1, 1991 and prior to January 1, 1994,
$200,000 as adjusted for such year in the same manner as under
Section 415(d) of the Code and, for each Plan Year beginning on
and after January 1, 1994, $150,000 as adjusted for such year
as provided under Section 401(a)(17)(B) of the Code. In
applying this limitation with respect to Plan Years beginning
before January 1, 1997, the family group of a Highly
Compensated Employee who is subject to the family member
aggregation rules of Section 414(q)(6) of the Code because such
Member is either a 5% owner of the Employer or one of the top
10 Highly Compensated Employees on the basis of Statutory
Compensation, shall be treated as a single Member. For this
purpose, family members shall include the Member, the Member's
spouse and any lineal descendants who have not attained age 19
before the close of the year. If, as a result of the
application of such rules, the adjusted annual limitation is
exceeded, then the limitation shall be prorated among the
affected family members in proportion to each such family
member's Compensation as determined prior to the application of
the adjusted annual limitation.
1.15 "Contribution Limit" means the maximum amount, established by
the Pension Committee pursuant to Section 3.05(a), of Deferred
Cash Contributions that Employers may contribute to the Plan
with respect to any calendar year on behalf of some or all
Members who are Highly Compensated Employees.
1.16 "Covered Employee" means any Employee of an Employer who is
classified as an hourly or salaried Employee by the Employer
and who receives stated compensation other than a pension,
retainer or fee under contract; provided, however, that the
following classes of individuals shall not be considered
Covered Employees hereunder:
(a) any person who is included in a unit of Employees covered
by a collective bargaining agreement which does not provide
for his membership in the Plan;
(b) any nonresident alien as defined in the Code;
(c) any leased employee including any such individual who is
a Leased Employee;
(d) factory Employees of the Wilkins Regulator division of
the Company; and
(e) Employees of Affiliated Employers.
1.17 "Deferred Account" means the account into which shall be
credited the Deferred Cash Contributions made on a Member's
behalf and earnings on those contributions.
1.18 "Deferred Cash Contributions" means all amounts contributed
pursuant to Section 3.01 of the Plan.
1.19 "Disability" means total and permanent physical or mental
disability, as evidenced by: (a) receipt of a Social Security
disability pension, (b) receipt of disability payments under
the Employer s long-term disability program, or (c)
certification by a physician or physicians chosen by the Member
and satisfactory to the Pension Committee.
1.20 "Earnings" means the amount of earnings to be returned with
any excess deferrals under Section 3.01, excess contributions
and excess aggregate contributions under Section 3.06 or excess
annual additions under Section 3.07 as determined in accordance
with regulations prescribed by the Secretary of the Treasury
under the provisions of Sections 401(k), 402(g) or 415(c) of
the Code, whichever applicable.
1.21 "Earnings Per Share" or "EPS" means the "Basic Earnings Per
Share", as defined by generally accepted accounting principles
in the United States (hereinafter "GAAP"), of the Company from
continuing operations determined in conformity with GAAP before
(a) extraordinary items and the cumulative effects of changes
in accounting principles and (b) unusual items, net of
applicable income taxes, as the Board of Directors may, in its
sole discretion, determine shall be excluded from continuing
operations in the computation of EPS for the purposes of the
Plan. The EPS of a prior period that is being compared to the
EPS of a current period in the determination of the amount, if
any, of Supplemental Match as provided under Section 3.02 shall
be adjusted for the effects of any pooling of interests,
recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, extraordinary
redemption or exchange of outstanding Common Stock, or any
other similar corporate transaction or event in respect of the
Common Stock so that such prior period EPS as adjusted is
determined on a basis comparable with the current period EPS.
1.22 "Employee" means a person employed by the Employer or an
Affiliated Employer.
1.23 "Employee Account" means, with respect to any Member or
Covered Employee, the total of any Deferred Account and any
Rollover Account maintained on behalf of the Member or Covered
Employee.
1.24 "Employer" means the Company and all majority-owned
subsidiaries of the Company incorporated under the laws of the
United States, or any political subdivision thereof, which are
not Affiliated Employers with respect to their Employees, or
any successor by merger, purchase or otherwise, with respect to
their Employees; or any other entity participating in the Plan
as provided in Section 13.03(a) with respect to its Employees.
1.25 "Employer Account" means the account into which shall be
credited the Employer Matching Contributions and earnings on
those contributions.
1.26 "Employer Matching Contributions" means, collectively or
distributively as the context may indicate, the Supplemental
Match and the Regular Match.
1.27 "Enrollment Date" means the first day of the month coincident
with or next following the date the Covered Employee satisfies
the age and service requirements of Section 2.01 and the first
day of any month thereafter.
1.28 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.29 "Fiduciary" means any person who:
(a) exercises any discretionary authority or discretionary
control respecting management of the Plan or the trust fund or
exercises any authority or control respecting management or
disposition of assets of the trust fund;
(b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any part of
the trust fund, or has any authority or responsibility to do
so; or
(c) has any discretionary authority or discretionary
responsibility in the administration of the Plan or the trust
fund.
Except as otherwise provided, the Pension Committee and the
Trustee shall be named Fiduciaries under ERISA.
Notwithstanding the foregoing, Members, Employees, Alternate
Payees and Beneficiaries with Accounts under the Plan shall be
considered Named Fiduciaries solely to the extent of those
fiduciary duties and responsibilities which are directly
related to the exercise of voting and tender offer rights with
respect to Plan interests invested in the Zurn Stock Fund or
U.S. Industries Stock Fund (and not to other aspects of Plan
operation and/or administration).
1.30 "Fiscal Year" means the 12-month fiscal year of the Company
beginning on any April 1.
1.31 "Fund" or "Investment Fund" means the separate funds in which
contributions to the Plan are invested in accordance with
Article 4 and, as applicable, Article 5.
1.32 "Highly Compensated Employee" means:
(a) For a given Plan Year beginning on and after January 1,
1997, any Employee who is a more than five percent (5%) owner
of the Employer at any time during the Plan Year or the
preceding Plan Year or who both received Statutory
Compensation during the preceding Plan Year in excess of
$80,000 multiplied by the Adjustment Factor and was a member
of the Top Paid Group during such Plan Year.
(b) For a given Plan Year beginning prior to January 1, 1997,
any Employee who satisfies one or more of the following
criteria:
(i) During that Plan Year (the "determination year") or the
preceding Plan Year (the "lookback year") the Employee:
(A) was at any time a 5% owner of the
Employer;
(B) received Statutory Compensation in
excess of $75,000 multiplied by the Adjustment Factor;
(C) received Statutory Compensation in
excess of $50,000 multiplied by the Adjustment Factor and
was a member of the Top Paid Group; or
(D) was at any time an officer of the
Employer or an Affiliated Employer and
received Statutory Compensation greater than 50% of the
dollar limitation on maximum benefits under Section
415(b)(1)(A) of the Code for such Plan Year.
(ii) The Statutory Compensation paid to any family member
(spouse, lineal ascendant or descendant, and their spouses)
of a 5% owner or one of the top 10 Highly Compensated
Employees on the basis of Statutory Compensation, shall be
aggregated with the Statutory Compensation of such Employee
for purposes of this definition.
(iii) Notwithstanding the foregoing, an
Employee who meets the criteria under (B), (C) or (D) of
Section 1.32(b)(i) for the current Plan Year, but not for the
preceding Plan Year, will not be considered a Highly
Compensated Employee for the current Plan Year unless the
Employee is one of the 100 highest paid Employees of the
Employer or an Affiliated Employer and for purposes of (D) of
Section 1.32(b)(i) above, no more than 50 Employees (or, if
lesser, the greater of 3 or 10% of Employees) shall be
treated as officers.
(c) Notwithstanding the foregoing, Employees who are
nonresident aliens and who receive no earned income from the
Employer or an Affiliated Employer which constitutes income
from sources within the United States shall be disregarded for
all purposes of this Section.
(d) Top Paid Group means all active Employees of the Employer
or an Affiliated Employer who, as of a given year, are in the
top twenty percent (20%) of the work force of the Employer and
all Affiliated Employers on the basis of Statutory
Compensation for such year, excluding the following:
(i) Employees who have not completed six (6) months of
service by the end of such year;
(ii) Employees who work less than seventeen and one-half (17-1/2)
hours per week for such year;
(iii) Employees who normally do not work more
than six (6) months in a year;
(iv) Employees under age twenty-one (21) at the end of such
year;
(v) Non-resident aliens; and
(vi) Except as provided in regulations, Employees who are
included in a unit of Employees covered by a collective
bargaining agreement.
(f) To the extent permitted under regulations or other
guidance issued by the Internal Revenue Service, the Pension
Committee may elect to determine the status of Highly
Compensated Employees on a basis other than that provided
above.
(g) The provisions of this Section shall be further subject
to such additional requirements as shall be described in
Section 414(q) of the Code and its applicable regulations,
which shall override any aspects of this Section inconsistent
therewith.
1.33 "Hour of Service" means, with respect to any applicable
computation period:
(a) Each hour for which the Employee is paid or entitled to
payment for the performance of duties for the Employer or an
Affiliated Employer;
(b) Each hour for which an Employee is paid or entitled to
payment by the Employer or an Affiliated Employer on account
of a period during which no duties are performed due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence, but not
more than 501 hours for any single continuous period;
provided, however, that Hours of Service shall include those
hours in excess of 501 which the Employee would have completed
during a period of military service if the Employee returns to
service with the Employer or an Affiliated Employer within the
period in which his reemployment rights are protected by law;
(c) Each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer or
an Affiliated Employer, excluding any hour credited under (a)
or (b), which shall be credited to the computation period or
periods to which the award, agreement or payment pertains,
rather than to the computation period in which the award,
agreement or payment is made;
(d) Each hour for which service credit is required under The
Family and Medical Leave Act of 1993 with respect to an
Employee who is on leave as provided by said Act; and
(e) Solely for purposes of determining whether an Employee
has incurred a Break in Service under the Plan, each hour for
which an Employee would normally be credited under paragraph
(a) or (b) above during a period of absence due to the
Employee's pregnancy, the birth of the Employee's child, the
placement of a child with the Employee in connection with the
adoption of that child by the Employee or for purposes of
caring for that child for a period beginning immediately
following that birth or adoption, but not more than 501 hours
for any single continuous period. However, the number of
hours credited to an Employee under this paragraph (e) during
the computation period in which such absence began, when added
to the hours credited to an Employee under paragraphs (a)
through (d) above during that computation period, shall not
exceed 501. If the number of hours credited under this
paragraph (e) for the computation period in which such absence
begins is zero, the provisions of this paragraph (e) shall
apply as though such absence began in the immediately
following computation period.
No hours shall be credited on account of any period during
which the Employee performs no duties and receives payment
solely for the purpose of complying with unemployment
compensation, workers' compensation or disability insurance
laws. The Hours of Service credited shall be determined as
required by Title 29 of the Code of Federal Regulations
Sections 2530.200-2(b) and (c).
1.34 "Hypothetical Tax Deduction" means the amount by which an
Employee's Statutory Compensation paid by the Employer is
reduced for taxes pursuant to an International Work Assignment
Agreement.
1.35 "Interactive Electronic Communication" means a communication
between a Member or Beneficiary and the person or entity
designated by the Pension Committee to perform recordkeeping
and other administrative services on behalf of the Plan
pursuant to a system maintained by such person or entity and
communicated to each Member and Beneficiary whereby each such
individual may make elections and exercise options as described
herein with respect to his Accounts through the use of such
system and a personal identification number. If a Member or
Beneficiary in writing (i) consents to participate in
Interactive Electronic Communication procedures adopted by the
Pension Committee and (ii) acknowledges that actions taken by
him through the use of his personal identification number
pursuant to the Interactive Electronic Communication procedure
constitute his signature for purposes of initiating Investment
Fund changes, Member loans and Plan withdrawals and/or
distributions, the Member or Beneficiary, as the case may be,
will be deemed to have given his written consent and
authorization to any such action resulting from the use of the
Interactive Electronic Communication system by the Member or
Beneficiary.
1.36 "International Work Assignment Agreement" means an agreement
between the Employee and the Employer or Affiliated Employer
made in connection with the Employee having a work assignment
outside the United States, or a territory or possession that
imposes tax on Statutory Compensation pursuant to the Code,
which provides for the payment to, or on behalf of, the
Employee by the Employer or Affiliated Employer of the
Employee's United States and foreign income tax liabilities.
1.37 "Leased Employee" means any person (other than an Employee of
the Employer or an Affiliated Employer) who pursuant to an
agreement between the recipient and a leasing organization
performs services for the Employer or Affiliated Employer and
related person as defined in Section 414(n)(6) of the Code on a
substantially full-time basis for a period of at least one
year, which services, for periods on an after January 1, 1997,
are performed under the primary direction or control by the
recipient. A person satisfying the foregoing criteria shall be
treated as an Employee hereunder unless the safe harbor rule of
Section 414(n)(5) of the Code is applicable with respect to
such person. Contributions or benefits provided to a Leased
Employee by the leasing organization that are attributable to
services performed for the Employer or Affiliated Employer
shall be treated as provided by the Employer or Affiliated
Employer.
1.38 "Member" means any Employee included in the membership of the
Plan as provided in Article 2 and shall include former
Employees to the extent provided under Section 2.04. Any
person who was a "member" in the Zurn/NEPCO Retirement Savings
Plan as of December 31, 1997 shall become a member hereof as of
January 1, 1998, subject to the provisions of Section 2.04.
1.39 "Normal Retirement Age" means the later of a Member's age 65
or the fifth anniversary of the date he is first eligible to
enter the Plan.
1.40 "Notice" means, unless otherwise
specifically provided herein, (i) written Notice on an
appropriate form provided by the Pension Committee that is, in
the discretion of the Pension Committee, properly completed and
executed by the party giving such Notice and which is delivered
by hand or by mail to the Pension Committee or to such other
party designated by the terms of the Plan or by the Pension
Committee to receive the Notice, or (ii) Notice by Interactive
Electronic Communication to the person or entity designated by
the Pension Committee to perform recordkeeping and other
administrative services on behalf of the Plan. The form of
Notice satisfactory in any given circumstance under the Plan
shall be determined by the Pension Committee, in its discretion,
and shall be applied uniformly to all Members. Notice to any
party as provided herein shall be deemed to be given when it is
actually received (either physically or by Interactive Electronic
Communication, as the case may be) by the party to whom such
Notice is given.
1.41 "Pension Committee" means the persons named to administer and
supervise the Plan as provided in Article 10.
1.42 "Plan" means the Zurn Retirement Savings Plan as set forth in
this document as the same may be amended from time to time.
For purposes of Sections 401(a)(27) and 401(k) of the Code and
Section 407(d)(3) of ERISA, the Plan is a profit sharing plan.
1.43 "Plan Year" means the 12-month period beginning on any
January 1.
1.44 "Regular Match" means, for periods beginning on and after
April 1, 1997 and before April 1, 1998, the Employer Matching
Contribution described in Section 3.02(a) and, for periods
beginning on and after April 1, 1998, the Employer Matching
Contribution described in Section 3.02A(a).
1.45 "Rollover Account" means the account into which shall be
credited Rollover Contributions and earnings on those
contributions.
1.46 "Rollover Contributions" means all amounts contributed
pursuant to Section 3.03 of the Plan.
1.47 "Spousal Consent" means a written consent given by a Member's
spouse to a Member's designation of a specified Beneficiary or
Beneficiaries (including the designation of any class of
Beneficiaries or any contingent Beneficiaries). Any Spousal
Consent shall be effective only with respect to such spouse.
Such consent shall be duly witnessed by a Plan representative
or a notary public and shall acknowledge the effect on the
spouse of the Member's election. The Member may revoke an
election any number of times without Spousal Consent at any
time before the Annuity Starting Date. Any new election will
require a new Spousal Consent. The requirement for Spousal
Consent may be waived by the Pension Committee if it is
established to the satisfaction of the Pension Committee that
there is no spouse, the spouse cannot be located, the Member
has a court order evidencing a legal separation from or
abandonment by the spouse, or for such other circumstances as
shall be prescribed by applicable law.
1.48 "Statutory Compensation" means the wages, salaries, and other
amounts paid by an Employer or Affiliated Employer in respect
of an Employee for services actually rendered to an Employer or
an Affiliated Employer, for which the Employer or Affiliated
Employer is required to furnish a written statement under
Sections 6041(d) and 6051(a)(3) of the Code. Statutory
Compensation shall include Deferred Cash Contributions and
amounts contributed on a Member's behalf on a salary reduction
basis to a cafeteria plan as described in Section 125 of the
Code. Statutory Compensation for Plan purposes in any given
year shall not exceed the adjusted annual limitation in effect
for such year (as set forth in Section 1.14), provided that
such limitation shall not be applied in determining the status
of an Employee as a Highly Compensated Employee under
Section 1.32 and for purposes of the maximum limitations under
Section 3.07.
1.49 "Supplemental Match" means, for periods beginning on and
after April 1, 1997 and before April 1, 1998, the Employer
Matching Contribution described in Section 3.02(b) and, for
periods beginning on and after April 1, 1998, the Employer
Matching Contribution described in Section 3.02A(b).
1.50 "Trustee" means the trustee or trustees by whom the funds of
the Plan are held as provided in Article 11.
1.51 "USI Merger Transaction" means the merger transaction
documented in the February 16, 1998 merger agreement between
USI Inc., U.S. Industries, Inc., Zurn Industries, Inc. and
others (as the same may be amended).
1.52 "U.S. Industries" means U.S. Industries, Inc., a Delaware
corporation (formerly known as USI, Inc.) as said corporation
exists following the consummation of the USI Merger
Transaction.
1.53 "U.S. Industries Stock" means the common stock, $0.01 par
value, of U.S. Industries.
1.54 "U.S. Industries Stock Fund" means the Investment Fund
described in Section 5.02.
1.55 "Valuation Date" means the last business day of each Plan
Year and, where appropriate given the context, the last
business day preceding the date of a Member's withdrawal,
distribution, loan or other event requiring a valuation of a
Member's Accounts. Subject to the provisions of Section 4.09,
the fair market value of Investment Funds on any Valuation Date
shall be determined as of the close of trading on said
Valuation Date.
1.56 "Vested Portion" means the portion of the Accounts in which
the Member has a nonforfeitable interest as provided in Article
6.
1.57 "Year of Eligibility Service" means, with respect to any
Employee, the 12-month period of employment with the Employer
or an Affiliated Employer, whether or not as a Covered
Employee, beginning on the date he first completes an Hour of
Service.
1.58 "Year of Vesting Service" means a Plan Year during which an
Employee is credited with at least 1,000 Hours of Service with
the Employer or any Affiliated Employer.
In the case of any Employee who has any one-year Break in
Service, Years of Vesting Service before such Break in Service
shall be disregarded until he has completed a 12-month period
of service, commencing upon the cessation of the Break in
Service, in which he has completed at least 1,000 Hours of
Service.
In the case of a Member who does not have a non-forfeitable
right to his Employer Account and whose number of consecutive
one-year Breaks in Service equals or exceeds the greater of (a)
five, or (b) the total number of Years of Vesting Service
rendered before the consecutive one-year Breaks in Service
(excluding any Years of Vesting Service disregarded under this
sentence by reason of any earlier one-year Breaks in Service),
the service rendered before the consecutive one-year Breaks in
Service shall be excluded from his Years of Vesting Service.
In addition, in the case of any Member whose number of
consecutive one-year Breaks in Service equals or exceeds five,
service rendered after such one-year Breaks in Service shall be
excluded for purposes of determining the Vested Portion of his
Employer Account attributable to those Employer Matching
Contributions made on his behalf before such one-year Breaks in
Service.
1.59 "Zurn Stock Fund" means the Investment Fund described in
Section 5.01.
<PAGE>
Article 2. Eligibility and Membership
2.01 Eligibility
(a) Each Covered Employee shall be eligible to become a
Member on any Enrollment Date coinciding with or following the
date he completes the required Year of Eligibility Service or
his 21st birthday, whichever is later. Any person reemployed
by the Employer who was previously a Member or who was
previously eligible to become a Member, shall be eligible to
become a Member of the Plan on the next Enrollment Date.
(b) Notwithstanding the provisions of Section 2.01(a), a
Covered Employee who is an Early-Eligible Employee (as
hereinafter defined) shall be eligible to become a Member of
any Enrollment Date coinciding with or following August 1,
1997 or the date he attains his 21st birthday, whichever is
later. For purposes hereof, an "Early-Eligible Employee"
shall mean a person who (i) is an Employee of the Employer as
of the date on which the Employer announces to Covered
Employees the special eligibility provisions of this Section
2.01(b), (ii) is a Covered Employee on or before July 31,
1997, and (iii) attains his 21st birthday on or before July
31, 1997.
2.02 Membership
A Covered Employee who is eligible to become a Member under
Section 2.01 shall become a Member on the first Enrollment Date
coinciding with or following the date the Covered Employee
gives Notice to the Pension Committee or its designee; provided
such Notice is given within such time and in accordance with
such means as is designated by the Pension Committee and
communicated to Covered Employees. For purposes of this
Section 2.02, the Covered Employee s Notice must include, at a
minimum, his:
(a) election as described in Section 3.01;
(b) written authorization to the Employer to reduce his
Compensation;
(c) investment election as described in Article 4; and
(d) designation of a Beneficiary.
The Deferred Cash Contributions elected by the Covered Employee
shall begin as of the first day of the payroll period following
the Covered Employee s Notice; provided, however, such day
shall not precede an Enrollment Date.
2.03 Transferred Members
A Member who remains in the employ of the Employer or an
Affiliated Employer but ceases to be a Covered Employee shall
continue to be a Member of the Plan but shall not be eligible
to have Deferred Cash Contributions made on his behalf while
his employment status is other than as a Covered Employee. In
the event the Member again becomes a Covered Employee, he shall
be eligible to have Deferred Cash Contributions made on his
behalf by submitting the enrollment forms prescribed by
Section 2.02.
2.04 Termination of Membership
A Member's membership shall terminate on the date he terminates
employment with the Employer and Affiliated Employers unless
the Member is entitled to vested benefits under the Plan, in
which event his membership shall terminate when those vested
benefits are distributed to him and any nonvested benefits are
forfeited.<PAGE>
Article 3. Contributions
3.01 Deferred Cash Contributions
(a) A Covered Employee may give Notice to reduce his
Compensation payable while a Member by not less than 1% and
not more than 18% (20% prior to August 1, 1997), in multiples
of 1%, and have that amount contributed to the Plan by the
Employer as Deferred Cash Contributions in a manner to be
determined by the Pension Committee. Any Deferred Cash
Contributions elected under this Section 3.01 shall be
allocated to the Member within the Plan Year for which they
are contributed and shall be paid to the Trustees in cash as
soon as such amounts can reasonably be segregated from the
Employer's general assets. Deferred Cash Contributions shall
be further limited as provided in Sections 3.01(b), 3.06 and
3.07.
(b) Any provision of this Plan to the contrary
notwithstanding, no Employer shall be permitted:
(i) During any calendar year, to make with respect to such
calendar year, Deferred Cash Contributions on behalf of a
Member under the Plan that, when combined with the Member's
elective deferrals under any other plans, contracts, or
arrangements described in Section 1.402(g)-1(b) of the Income
Tax Regulations, will exceed $7,000, as indexed for such year
under Section 402(g)(5) of the Code; and
(ii) With respect to any given pay period or group of pay
periods as determined by the Pension Committee within a given
calendar year, to make Deferred Cash Contributions to the
Plan on behalf of a Member who is a Highly Compensated
Employee that will exceed the prorated portion of the
Contribution Limit then in effect for that Member for the
given pay period or group of pay periods.
(c) In the event any amount of Deferred Cash Contributions
made on behalf of a Member for a calendar year exceeds the
limitation specified in Section 3.01(b)(i) for such calendar
year, such excess amount (hereafter described for purposes of
this Section, as "excess deferrals"), as adjusted for any
income or loss allocable thereto in accordance with Income Tax
Regulations shall, to the extent possible, be distributed to
such Member as provided in subparagraphs (i), (ii) and (iii)
below:
(i) At a date not later than the March 1st of the calendar
year immediately following the calendar year to which such
excess deferrals are attributable, any Member to whom this
Section 3.01(c) applies may notify, in writing, the Pension
Committee by submitting a form as may be provided by the
Pension Committee which shall specify the amount of the
Member's excess deferrals for the given calendar year and
shall contain a certified statement by the Member indicating
that if such amount is not distributed, such excess deferrals
will exceed the limit imposed on the Member by Section 402(g)
of the Code for the year in which the Deferred Cash
Contributions occurred. Notwithstanding the foregoing, in
the event a Member has excess deferrals in a given year
calculated by taking into account Deferred Cash Contributions
made on his behalf and his elective deferrals under all other
plans, contracts or arrangements maintained by the Employer
or an Affiliated Employer, the Member will be deemed to have
notified the Pension Committee in the manner provided in this
subparagraph.
(ii) At a date not later than the April 15 of the calendar
year immediately following the calendar year to which such
excess deferrals are attributable, the Plan may distribute to
the Member the amount of the excess deferrals allocated to
the Plan and Earnings. Any excess deferrals distributed
pursuant to this subparagraph are to be included in the gross
income of the Member for the year to which such excess
deferrals relate. Any Earnings distributed pursuant to this
subparagraph are to be included in the gross income of the
Member for the year in which the Earnings are distributed.
In making a distribution as permitted under this Section, the
Employer shall specifically designate the distribution as
that consisting of excess deferrals within the meaning of
Section 402(g)(1) of the Code. Any distribution of less than
the entire amount of excess deferrals plus Earnings shall be
treated as a pro rata distribution of such excess deferrals
and Earnings.
(iii) To the extent provided by the Secretary
of the Treasury or his delegate, such excess deferrals
distributed pursuant to this Section 3.01(c) are to be taken
into account for purposes of applying the actual deferral
percentage test specified in Section 3.06 (except if such
excess is both prohibited under Section 401(a)(30) of the
Code and is attributable to an Employee who is not a Highly
Compensated Employee), and for any other purpose of the Code
which may be prescribed by the Secretary of the Treasury or
his delegate. No corrective distribution under this section
shall be recognized for purposes of determining whether the
minimum distribution requirements of Section 401(a)(9) of the
Code are satisfied with respect to any Member.
(iv) Any distribution in accordance with this Section 3.01(c)
shall be made without regard to any notice or consent
otherwise required under Sections 411(a)(11) or 417 of the
Code.
(d) Deferred Cash Contributions constitute Employer
contributions under the Plan and are intended to qualify as
elective contributions under Section 401(k) of the Code.
Deferred Cash Contributions may be made only with respect to
an amount which the Member could otherwise elect to receive in
cash and which is not currently available to the Member as of
the date an election specified in this Section 3.01 is made.
Any Deferred Cash Contributions made on behalf of a Member in
any given Plan Year that is taken into account for purposes of
the actual deferral percentage limitation described in
Section 3.06 shall be attributable to services performed by
the Member in such Plan Year and shall relate to Compensation
which would have been paid in such Plan Year (or within 2-1/2
months after such Plan Year) but for the deferral election.
3.02 Employer Matching Contributions (Effective April 1, 1997
through March 31, 1998)
The Employer shall contribute on behalf of each of its Members
who, pursuant to the election described in Section 3.01, makes
Deferred Cash Contributions for pay periods beginning on or
after April 1, 1997. The Employer Matching Contribution
allocated to a Member during the period beginning April 1, 1997
and ending March 31, 1998 shall be the sum of the Regular Match
and the Supplemental Match allocated to such Member as provided
in (a) and (b), as follows:
(a) Except as provided under Section 3.02(a)(iii), the amount
of Regular Match allocated to a Member for any given pay
period within a Plan Year shall equal the difference between
(i) and (ii), where:
(i) equals the lesser of:
(A) 25% of
the Deferred Cash Contributions made on behalf of the Member
to the Plan with respect to such Plan Year (including the
Deferred Cash Contributions made for the given pay period);
or
(B) 1.5% of
the Member s Compensation for such Plan Year (including
Compensation payable for the given pay period); and
(ii) equals the Regular Match made on behalf of the Member
under the Plan with respect to such Plan Year determined
immediately prior to the given pay period.
(iii) Solely for purposes of determining the
amount of Regular Match to be allocated to a Member for the
Plan Year beginning on January 1, 1997, the term "Plan Year"
as used in Sections 3.02(a)(i) and (ii) shall be deemed to
mean the period commencing April 1, 1997 and ending December
31, 1997; provided, however, that the allocation of a Regular
Match with respect to Deferred Cash Contributions made on
behalf of a Member for pay periods beginning on or after
April 1, 1997 and before July 31, 1997 shall be conditioned
upon the Member being employed by the Employer on July 31,
1997 and, provided further, that the Regular Match shall be
paid to the Trustee and credited to Members Employer
Accounts as soon as practicable following July 31, 1997.
Except as provided in Section 3.02(a)(iii), the Regular Match
shall be paid to the Trustee and credited to Members Employer
Accounts as soon as practicable following each pay period.
(b) As soon as practicable after the determination of the
Earnings Per Share for a given Fiscal Year, the Pension
Committee shall determine in accordance with the provisions of
this Section 3.02(b), whether a Supplemental Match is payable
with respect to such Fiscal Year. In the event the Pension
Committee determines that a Supplemental Match is payable
hereunder, the Pension Committee, or its delegate, shall
promptly direct the Employer to make a contribution to the
trust fund equal to the sum of the amounts individually
determined as follows:
(i) Subject to Section 3.02(b)(ii), the total Supplemental
Match for a given Fiscal Year that is allocated to the Employer
Account maintained on behalf of a Member shall be equal to the
product of:
(A) the Applicable Percentage (as defined in (C) below); and
(B) the sum of:
(1) those Deferred Cash Contributions, if any, made on behalf
of the Member to the Plan during the first nine months of the
Fiscal Year which do not exceed 6% of the Member s Compensation
for such nine-month period; and
(2) those Deferred Cash Contribution, if any, made on behalf
of the Member to the Plan during the final three months of the
Fiscal Year which do not exceed 6% of the Member s Compensation
for such three-month period.
(C) For purposes of this Section 3.02(b), the Applicable
Percentage for any given Fiscal Year shall be determined on the
basis of the percentage increase in Earnings Per Share computed
at the end of the given Fiscal Year as compared to the Earnings
Per Share computed at the end of the immediately prior Fiscal
Year, as follows:
Increase in Level of
Earnings Supplemental
Per Share Match
Under 10% 0%
10% but less than 15% 25%
15% but less than 20% 50%
20% or more 75%
(ii) Notwithstanding any provision of the Plan to the
contrary:
(A) The allocation of a Supplemental Match with respect to
Deferred Cash Contributions described in Section
3.02(b)(i)(B)(1) shall be conditioned upon a Member being
employed by the Employer on the last day of the Plan Year
ending within the given Fiscal Year. The allocation of such
Supplemental Match on behalf of a Member who satisfies such
condition shall be made as of the last day of such Plan Year.
(B) The allocation of a Supplemental Match with respect to
Deferred Cash Contributions described in Section
3.02(b)(i)(B)(2) shall be conditioned upon a Member being
employed by the Employer on the last day of the given Fiscal
Year. The allocation of such Supplemental Match on behalf of a
Member who satisfies such condition shall be made as of the
last day of the given Fiscal Year.
(c) Employer Matching Contributions made for any given Plan
Year shall be subject to the limitations provided in Sections
3.06 and 3.07.
(d) Employer Matching Contributions may be made in cash, in
Common Stock, or in any combination of cash and Common Stock,
as determined by the Pension Committee acting in its sole
discretion. Notwithstanding any provision of Article 4 to the
contrary, all Employer Matching Contributions under this
Section 3.02 shall be invested in the Zurn Stock Fund and
shall not be subject to Member investment elections under
Section 4.04.
3.02A Employer Matching Contributions (Effective April 1, 1998)
The Employer shall contribute on behalf of each of its Members
who, pursuant to the election described in Section 3.01, makes
Deferred Cash Contributions for pay periods beginning on or
after April 1, 1998. The Employer Matching Contribution
allocated to a Member during periods on and after April 1, 1998
shall be the sum of the Regular Match and the Supplemental
Match, if any, allocated to such Member as provided in (a) and
(b), as follows:
(a) Except as provided under Section 3.02A(a)(iii), the
amount of Regular Match allocated to a Member for any given
pay period within a Plan Year shall equal the difference
between (i) and (ii), where:
(i) equals the lesser of:
(A) 50% of the Deferred Cash Contributions made on behalf of
the Member to the Plan with respect to such Plan Year
(including the Deferred Cash Contributions made for the given
pay period); or
(B) 3.0% of the Member s Compensation for such Plan Year
(including Compensation payable for the given pay period);
and
(ii) equals the Regular Match made on behalf of the Member
under the Plan with respect to such Plan Year determined
immediately prior to the given pay period.
(iii) Solely for purposes of determining the amount of Regular
Match to be allocated to a Member for the Plan Year beginning
on January 1, 1998, the term "Plan Year" as used in Section
3.02A(a)(i) and (ii) shall be deemed to mean the period
commencing April 1, 1998 and ending December 31, 1998;
provided, however, that the allocation of a Regular Match at
the levels set forth in the foregoing provisions of this
Section 3.02A(a) with respect to Deferred Cash Contributions
made on behalf of a Member for pay periods beginning on or
after April 1, 1998 and before June 30, 1998 shall be
conditioned upon the Member being employed by the Employer on
June 30, 1998 and, provided further, that such Regular Match
shall be paid to the Trustee and credited to Members Employer
Accounts as soon as practicable following June 30, 1998.
Except as provided in Section 3.02A(a)(iii), the Regular Match
shall be paid to the Trustee and credited to Members Employer
Accounts as soon as practicable following each pay period.
(b) Effective with respect to any Plan Year or other period
ending after March 31, 1998, the Pension Committee may, in its
discretion, determine that a Supplemental Match be made and
allocated with respect to those Deferred Cash Contributions
made by some or all Members during such Plan Year or other
period; provided, however, that unless otherwise specified by
the Pension Committee, the allocation of such Supplemental
Match on behalf of any given Member shall be conditioned upon
the Member being employed by the Employer on the last day of
such given Plan Year or other period and the allocation shall
be made as of such last day.
(c) Employer Matching Contributions made for any given Plan
Year shall be subject to the limitations provided in Section
3.06 and 3.07.
(d) Employer Matching Contributions may be made in cash, in
Common Stock, or in any combination of cash and Common Stock,
as determined by the Pension Committee acting in its
discretion. Notwithstanding any provision of Article 4 to the
contrary but subject to the discretion of the Pension
Committee, all Employer Matching Contributions made prior to
the consummation of the USI Merger Transaction shall be
invested in the Zurn Stock Fund and all Employer Matching
Contributions made on and after the consummation of the USI
Merger Transaction shall be invested in the U.S. Industries
Stock Fund. Such Employer Matching Contributions shall not be
subject to Member investment elections under Section 4.04.
3.03 Rollover Contributions
With the permission of the Pension Committee and without regard
to any limitations on contributions set forth in Section 3.06
or 3.07, the Plan may receive from a Member, or a Covered
Employee who has not yet met the eligibility requirements for
membership, a check made payable to the Plan which represents
an amount previously received by the Member or Covered Employee
from a qualified plan (either directly or indirectly), provided
that such amount is eligible to be rolled over to a qualified
trust in accordance with Section 402(c) of the Code and the
Member or Covered Employee provides evidence satisfactory to
the Pension Committee that such amount qualifies for rollover
treatment. The Pension Committee may require the Member or
Covered Employee to provide an opinion of counsel satisfactory
to the Pension Committee that amounts to be rolled over meet
the requirements of this section. The Rollover Contributions
must be paid to the Trustee on or before the 60th day after the
day the amounts were received by the Member or the Covered
Employee.
3.04 Change in Contributions
The percentage of Compensation designated by a Member under
Section 3.01 shall remain in effect, notwithstanding any change
in his Compensation, until the Member gives Notice to change
such percentage. Subject to the provisions of Section 3.01, a
Member may change the percentage of the Deferred Cash
Contributions made on his behalf by giving Notice to the
Pension Committee or its designee within such time and in
accordance with such means as are designated by the Pension
Committee and communicated to Members. The changed percentage
shall become effective as of the first day of the payroll
period following the Member s Notice.
3.05 Suspension of Contributions
(a) A Member may suspend the Deferred Cash Contributions made
on his behalf under Section 3.01. To suspend such
contributions, the Member must give Notice to the Pension
Committee or its designee within such time and in accordance
with such means as are designated by the Pension Committee and
communicated to Members. The suspension of Deferred Cash
Contributions shall become effective as of the first day of
the payroll period following the Member s Notice.
(b) A Member who has suspended the Deferred Cash
Contributions made on his behalf may again have his
Compensation reduced by providing Notice to the Pension
Committee or its designee which satisfies the requirements
under Section 3.01 and which is accompanied by a written
authorization to the Employer to reduce his Compensation. The
election to have Deferred Cash Contributions resumed shall
become effective as of the first day of the payroll period
next following the Member s Notice. An election to resume
Deferred Cash Contributions under this Section 3.05(b) shall
not limit a period of suspension required under Section
7.03(c).
3.06 Limitations Affecting Highly Compensated Employees
(a) Limitation Based on Actual Deferral Percentage: The
Actual Deferral Percentage for Highly Compensated Employees
who are Members or eligible to become Members shall not exceed
the Actual Deferral Percentage for all other Employees who are
Members or eligible to become Members multiplied by 1.25. If
the Actual Deferral Percentage for Highly Compensated
Employees does not meet the foregoing test, the Actual
Deferral Percentage for Highly Compensated Employees may not
exceed the Actual Deferral Percentage for all other Employees
who are Members or eligible to become Members by more than two
percentage points, and the Actual Deferral Percentage for
Highly Compensated Employees may not be more than 2.0 times
the Actual Deferral Percentage for all other Employees. The
Pension Committee may, from time-to-time, establish a
Contribution Limit and may adopt such rules as it sees fit to
assist the Plan in complying with the requirements of
Section 401(k)(3) of the Code and to equalize the effect of
the Contribution Limit. If the Pension Committee determines
that the limitation under this Section 3.06(a) has been
exceeded for any Plan Year beginning on or after January 1,
1997, the following provisions shall apply:
(i) The amount of Deferred Cash Contributions made on behalf
of some or all Highly Compensated Employees for the Plan Year
shall be reduced by determining the total dollar amount of
Deferred Cash Contributions which must be reduced to satisfy
the limitation and by allocating these amounts, in accordance
with guidance provided by the Secretary of the Treasury or
his delegate, to the Highly Compensated Employees on behalf
of whom the largest dollar amounts of Deferred Cash
Contributions have been made to the Plan for the given Plan
Year.
(ii) Deferred Cash Contributions subject to reduction under
this Section 3.06(a) ("excess contributions") and Earnings
shall be paid to the Member before the close of the Plan Year
following the Plan Year in which the excess contributions
were made and, to the extent practicable, within 2-1/2 months
of the close of the Plan Year in which the excess
contributions were made. However, any excess contributions
for any Plan Year shall be reduced by any Deferred Cash
Contributions previously returned to the Member under Section
3.01(c) for that Plan Year.
In the event any Deferred Cash Contributions returned under
this Section 3.06(a) were matched by Employer Matching
Contributions, such corresponding Employer Matching
Contributions and Earnings shall be forfeited and may be used
to reduce future Employer Matching Contributions or used in
lieu of the Employer transmitting additional cash amounts to
the Trustee for future Deferred Cash Contributions.
(b) Limitation Based on Actual Contribution Percentage: The
Actual Contribution Percentage for Highly Compensated
Employees who are Members or eligible to become Members shall
not exceed the Actual Contribution Percentage for all other
Employees who are Members or eligible to become Members
multiplied by 1.25. If the Actual Contribution Percentage for
Highly Compensated Employees does not meet the foregoing test,
the Actual Contribution Percentage for Highly Compensated
Employees may not exceed the lesser of the Actual Contribution
Percentage of all other Employees who are Members or eligible
to become Members plus two percentage points or such
Contribution Percentage multiplied by 2.0 (or such lesser
amount as the Pension Committee shall determine to satisfy the
provisions of Section 3.06(c)). If the Pension Committee
determines that the limitation under this Section 3.06(b) has
been exceeded for any Plan Year beginning on or after January
1, 1997, the following provisions shall apply:
(i) The amount of Employer Matching Contributions made on
behalf of some or all Highly Compensated Employees for the
Plan Year shall be reduced by determining the total dollar
amount of Employer Matching Contributions which must be
reduced to satisfy the limitation and by allocating these
amounts, in accordance with guidance provided by the
Secretary of Treasury or his delegate, to the Highly
Compensated Employees on behalf of whom the largest dollar
amounts of Employer Matching Contributions have been made to
the Plan for the given Plan Year.
(ii) Any Employer Matching Contributions subject to reduction
under this paragraph ("excess aggregate contributions") and
Earnings shall be reduced as shall be necessary to equal the
balance of the excess aggregate contributions, with the
vested Employer Matching Contributions and Earnings being
paid to the Member and the Employer Matching Contributions
which are forfeitable under the Plan being forfeited. Such
forfeited amounts may be used to reduce future Employer
Matching Contributions or used in lieu of the Employer
transmitting additional cash amounts to the Trustee for
future Deferred Cash Contributions.
(iii) Any payment or forfeiture of excess
aggregate contributions shall be made before the close of the
Plan Year following the Plan Year for which the excess
aggregate contributions were made and, to the extent
practicable, any repayment shall be made within 2-1/2 months
of the close of the Plan Year in which the excess aggregate
contributions were made.
(c) Notwithstanding the provisions of Sections 3.06 (a) and
(b), in no event shall the sum of the Actual Deferral
Percentage of the group of eligible Highly Compensated
Employees and the Actual Contribution Percentage of such
group, after applying the provisions of Sections 3.06 (a) and
(b), exceed the "aggregate limit" as such term is defined
under Section 1.401(m)-2 of the Income Tax Regulations. In
the event the aggregate limit is exceeded for any Plan Year,
the Actual Contribution Percentages of the Highly Compensated
Employees shall be reduced to the extent necessary to satisfy
the aggregate limit in accordance with the procedure set forth
in Section 3.06(b) above.
(d) In making a distribution under this Section, the Pension
Committee shall specifically designate such distribution as a
distribution consisting of excess contributions or excess
aggregate contributions and Earnings. Any distribution of
less than the entire amount of excess contributions or excess
aggregate contributions and Earnings shall be treated as a pro
rata distribution of such excess contribution or excess
aggregate contribution and Earnings.
(e) Except as otherwise provided by the Secretary of the
Treasury or his delegate, any excess contributions and any
excess aggregate contributions shall be taken into account for
purposes of determining the Member's annual additions
limitation as provided in Section 3.07 and shall be taken into
account for purposes of Section 404 of the Code,
notwithstanding the correction of such excess amounts by
distribution. No corrective distribution under this Section
shall be recognized for purposes of determining whether the
minimum distribution requirements of Section 401(a)(9) of the
Code are satisfied with respect to any Member.
(f) Any distribution in accordance with this Section shall be
made without regard to any notice or consent otherwise
required under Sections 411(a)(11) or 417 of the Code.
(g) The provisions of this Section 3.06(g) shall be
applicable solely with respect to Plan Years beginning prior
to January 1, 1997. If any Highly Compensated Employee is
either (i) a 5% owner, or (ii) one of the top 10 Highly
Compensated Employees on the basis of Statutory Compensation,
then any benefit or contribution paid to or made on behalf of
any member of his "family" (spouse, lineal ascendant or
descendant and their spouses) shall be deemed paid to or made
on behalf of such Highly Compensated Employee for purposes of
Sections 3.06(a) and (b), to the extent required under
regulations prescribed by the Secretary of the Treasury or his
delegate under Section 401(k) and Section 401(m) of the Code.
Any return of excess contributions required under
Section 3.06(a), (b) or (c) with respect to the family group
shall be made in accordance with such regulations. The total
benefit shall then be apportioned among the Highly Compensated
Employees and the members of his family in a manner determined
by the Pension Committee, which shall be uniformly applicable
to all Employees similarly situated.
(h) If any Highly Compensated Employee is a member of another
qualified plan of the Employer or an Affiliated Employer under
which Deferred Cash Contributions or Employer Matching
Contributions are made on behalf of the Highly Compensated
Employee, the Committee shall implement rules, which shall be
uniformly applicable to all Employees similarly situated, to
take into account all such contributions for the Highly
Compensated Employee under all such plans in applying the
limitations of this Section.
(i) If two or more plans of the Employer to which cash or
deferred contributions, matching contributions, Employee
contributions or all of them, are made and treated as one plan
for the purposes of Code Section 401(a)(4) of the Code or
Section 410(b) (other than for purposes of Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan for
the purposes of determining the limitation on Highly
Compensated Employees under Section 3.06.
(j) Any provision of this Article 3 to the contrary
notwithstanding, the provisions of Section 3.06 shall be
deemed to include the provisions of Sections 401(k)(3) and
401(m)(3) of the Code and Sections 1.401(k)-1(b), 1.401(m)-1(b)
and 1.401(m)-2 of the Income Tax Regulations which are
incorporated herein by reference.
3.07 Maximum Annual Additions
(a) The annual addition to a Member's Accounts for any Plan
Year, which shall be considered the "limitation year" for
purposes of Section 415 of the Code, when added to the
Member's annual addition for that Plan Year under any other
qualified defined contribution plan of the Employer or an
Affiliated Employer, shall not exceed an amount which is equal
to the lesser of: (i) 25% of his remuneration (as hereinafter
defined) for that Plan Year, or (ii) $30,000, as adjusted by
applying the Adjustment Factors to years up to and including
the given Plan Year.
(b) For purposes of this Section, the "annual addition" shall
be the sum of the following amounts to the extent allocated to
the Member's Accounts under the Plan or to his account under
such other plan or plans described below:
(i) The total contributions, including Deferred Cash
Contributions and Employer Matching Contributions made on the
Member's behalf by the Employer or an Affiliated Employer;
(ii) All Member contributions, exclusive of any Rollover
Contributions;
(iii) Reallocated forfeitures; and
(iv) Amounts allocated to an individual medical account, as
defined in Section 415(l)(2) of the Code, as part of a
pension or annuity plan and amounts derived from
contributions paid or accrued which are attributable to post-retirement
medical benefits described in Section 419A(d) of
the Code, under a welfare benefit fund (as defined in Section
419(e) of the Code) maintained by the Employer or an
Affiliated Employer.
(c) For purposes of this Section, the term "remuneration"
with respect to any Member shall mean Statutory Compensation;
provided, however, that with respect to limitation years
beginning before January 1, 1998, Statutory Compensation shall
be determined after any reduction of Compensation pursuant to
Section 3.01 or pursuant to a cafeteria plan as described in
Section 125 of the Code.
(d) In the event that a Member's total annual additions for
any limitation year exceed the limitations of Section 3.07(a)
because of a reasonable error in estimating a Member's
Compensation, a reasonable error in determining the amount of
Deferred Cash Contributions that a Participant may make within
the limitations of Section 3.07(a), or due to such other facts
and circumstances as the Commissioner of Internal Revenue
finds justifiable, his total annual additions shall be reduced
in the following order until such limitations are met:
(i) After-tax Member contributions made in the limitation
year under any other plan maintained by the Employer or
Affiliated Employer shall be returned to the Member in
accordance with the provisions of such plan to the extent
necessary to meet the above limitations;
(ii) The Deferred Cash Contributions made on the Member's
behalf in the limitation year that are in excess of six
percent of the Member's Compensation shall be distributed to
the Member;
(iii) The Deferred Cash Contributions made on
the Member's behalf in the limitation year that are not in
excess of six percent of the Member's Compensation and the
Employer Matching Contributions made on the Member's behalf
in the limitation year shall be reduced proportionately.
Deferred Cash Contributions so reduced shall be distributed
to the Member. Employer Matching Contributions so reduced
shall be held unallocated in a suspense account and shall be
applied to reduce the Deferred Cash Contributions and the
Employer Matching Contributions with respect to all Members
for the subsequent limitation year. For limitation years
beginning on and after January 1, 1996, any distribution
under this Section 3.07(d) which includes Deferred Cash
Contributions shall also include Earnings on such Deferred
Cash Contributions.
The Pension Committee may change the order of the reductions
listed above in any manner which, in the judgment of the
Pension Committee, is in the Member's best interest.
(e) If a Member is also a member in a defined benefit plan
maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction for
any limitation year beginning after January 1, 1982 and before
January 1, 2000 shall not exceed 1.0. The defined benefit
plan fraction for any such limitation year is a fraction, the
numerator of which is the projected annual benefit of the
Member under such plan (determined as of the close of the
limitation year), and the denominator of which is the lesser
of 1.25 times the dollar limit in Section 415(b)(1)(A) of the
Code or 1.4 times 100% of the Member's average remuneration
over that period of consecutive calendar years (not more than
three) during which his remuneration was the highest. The
defined contribution plan fraction for any such limitation
year is a fraction the numerator of which is the sum of the
annual additions on behalf of the Member under the Plan and
any other defined contribution plan or plans maintained by the
Employer as of the close of the year and the denominator of
which is the sum of 1.25 times the maximum dollar limit or 1.4
times the maximum percentage limit, whichever is smaller on a
year-by-year basis, which could have been made under Section
415(c) of the Code for such year and for each prior year of
service with the Employer, subject to any transition
adjustments allowed by law and adopted by the Pension
Committee. Any adjustment necessary to comply with the
limitations of Section 3.07(e) shall be made in the Member's
benefit payable under the defined benefit plan.
(f) The sole purpose of this Section 3.07 is to comply with
the formal requirements of Section 415(c) and 415(e) of the
Code and the terms of this Section 3.07 shall be interpreted,
applied, and if and to the extent necessary, shall be deemed
modified so as to satisfy solely the minimum requirements of
Section 415(c) and 415(e) of the Code.
3.08 Return of Contributions
(a) Any provision of the Plan to the contrary
notwithstanding, the total contributions made by the Employer
with respect to any Plan Year, when added to any other
contributions made by the Employer to a plan qualified under
Section 401(a) of the Code, shall not exceed such amount which
is deductible for such Plan Year pursuant to
Sections 404(a)(3) or 404(a)(7) of the Code. In any event,
all contributions for a Plan Year shall be paid within the
regular or extended time for filing the Employer's federal
income tax return for the fiscal year which includes the Plan
Year end.
(b) The Employer's contributions to the Plan are conditioned
upon their deductibility under Section 404 of the Code. If it
is determined that all or part of the Employer's contributions
to the Plan are not currently deductible under Section 404 of
the Code, the Employer shall direct the Trustee to return the
nondeductible portion of the contribution to the Employer
without interest but reduced by any investment loss
attributable to the nondeductible contribution. The return
shall be made within one year after the contribution is
determined to be nondeductible.
(c) The Employer may recover without interest the amount of
its contributions to the Plan made on account of a mistake of
fact, reduced by any investment loss attributable to those
contributions, if recovery is made within one year after the
date of those contributions.
(d) In the event that the Deferred Cash Contributions made
under Section 3.01 are returned to the Employer in accordance
with the provisions of this Section 3.08, the elections to
reduce Compensation which were made by Members on whose behalf
those contributions were made, to the extent the elections
apply to amounts returned, shall be void retroactively to the
beginning of the period for which those contributions were
made. The Deferred Cash Contributions so returned shall be
distributed in cash to those Members for whom those
contributions were made. In the event the Pension Committee
determines that an amount to be deferred pursuant to the
election provided in Section 3.01 would cause the Employer's
contributions under this and/or any other tax-qualified
retirement plan maintained by the Employer or an Affiliated
Employer to exceed the applicable deduction limits contained
in Section 404 of the Code, or to exceed the maximum annual
addition determined with respect to a Member in accordance
with Section 3.07, the Pension Committee may, in its
discretion, authorize a suspension or reduction of Deferred
Cash Contributions in accordance with rules promulgated by the
Pension Committee.<PAGE>
Article 4. Investment of Contributions and
Accounts; Valuation
4.01 Investment Funds
(a) Contributions to the Plan shall be invested in one or
more Investment Funds, as authorized by the Pension Committee,
from time to time.
(b) The Trustee may keep such amounts of cash as the Pension
Committee, in its sole discretion, shall deem necessary or
advisable as part of the Funds, all within the limitations, if
any, specified in the trust agreement.
(c) Dividends, interest, and other distributions received on
the assets held by the Trustee in respect to each of the Funds
shall be reinvested in the respective Fund.
4.02 Investment of Members' Accounts
A Member or a Covered Employee making a Rollover Contribution
shall give Notice regarding the investment of all contributions
to be made to the Deferred Account on his behalf and, if there
is no separate election, to the Rollover Account maintained on
his behalf under the Plan. Such Notice shall be delivered to
the Pension Committee or its designee within such time and in
accordance with such means as are designated by the Pension
Committee and communicated to Members and Covered Employees.
Such Notice shall specify, in 10% increments from 0% to 100%,
the percentage of all future Deferred Cash Contributions and/or
Rollover Contribution to be invested in the Investment Funds
then offered under the Plan. The investment elections provided
in such Notice shall be effective as of the business day on
which the Notice is given or as of the next following business
day, in accordance with procedures established by the Pension
Committee and communicated to Members and Covered Employees and
such elections shall remain in effect until changed in
accordance with Section 4.04. Except as provided in Section
4.06, the Employer Account maintained on behalf of a Member
shall be invested in the Zurn Stock Fund or, for periods on and
after the consummation of the USI Merger Transaction, the U.S.
Industries Stock Fund and such amounts shall not be available
for transfer to any other Investment Fund.
4.03 Responsibility for Investments
Each Member and Covered Employee is solely responsible for the
selection of his investment option. The Trustee, the Pension
Committee, the Employer, and the directors, officers,
supervisors and other employees of the Employer are not
empowered to advise a Member or Covered Employee as to the
manner in which his Accounts shall be invested. The fact that
an Investment Fund is available for investment under the Plan
shall not be construed as a recommendation for investment in
that Investment Fund.
4.04 Change of Election
A Member may change his investment election with respect to
future Deferred Cash Contributions at any time by giving Notice
to the Pension Committee or its designee within such time and
in accordance with such means as are designated by the Pension
Committee and communicated to Members. The changed investment
election shall be made in the same manner as elections under
Section 4.02 and shall become effective as of the business day
on which the Notice is given or as of the next following
business day, in accordance with procedures established by the
Pension Committee and communicated to Members. Any election
under this Section 4.04 shall remain in effect until changed by
another election under this Section. Except as provided in
Section 4.06, all Employer Matching Contributions shall be
invested in the Zurn Stock Fund or, for periods on and after
the consummation of the USI Merger Transaction, the U.S.
Industries Stock Fund and such amounts shall not be subject to
Member investment elections under this Section 4.04.
4.05 Reallocation of Accounts Among the Funds
A Member or a Covered Employee with a Rollover Account
maintained on his behalf may give Notice regarding the
reallocation of his Employee Account among the Investment
Funds. Such Notice shall be delivered to the Pension Committee
or its designee within such time and in accordance with such
means as are designated by the Pension Committee and
communicated to Members and Covered Employees. Such Notice
shall specify, in 1% increments from 0% to 100%, the percentage
of the Member s entire Employee Account balance to be invested
in the Investment Funds then offered under the Plan or the
dollar amount to be exchanged out of an Investment Fund and
into one or more Investment Funds then offered under the Plan.
The reallocation election provided in such Notice shall be
effective as of the business day on which the Notice is given
or as of the next following business day, in accordance with
procedures established by the Pension Committee and
communicated to Members and those Covered Employees with an
Employee Account maintained under the Plan. Such election
shall remain in effect until changed by another election under
this Section. Subject to Sections 4.09 and 5.03, a Member or
Covered Employee may make the Employee Account reallocation
election described in this Section 4.05 at any time. Except as
elected otherwise by a Member pursuant to Section 4.06, all
Employer Accounts shall remain invested in the Zurn Stock Fund
or, for periods on and after the consummation of the USI Merger
Transaction, the U.S. Industries Stock Fund.
4.06 Diversification Election on Employer Account
Nothwithstanding the foregoing provisions of this Article 4,
any Member who has attained age 57 may elect to reallocate all
or a portion of his Employer Account among the Investment
Funds. Such reallocation election shall be made only in
connection with a reallocation election made under Section 4.05
with the result that the Member s election under Section 4.05
shall then apply to his entire Account balance under the Plan
and not only the balance of his Employee Account.
4.07 Limitations Imposed by Contract
Notwithstanding anything in Article 4 to the contrary, any
contributions invested in a guaranteed investment contract
shall be subject to any and all terms of such contract,
including any limitations placed on the exercise of any rights
otherwise granted to a Member or Covered Employee under any
other provisions of this Plan with respect to such
contributions.
4.08 Valuation of the Investment Funds
The Trustee shall value the Investment Funds on the Valuation
Date and at such other date or dates deemed necessary by the
Pension Committee. On each Valuation Date there shall be
allocated to the Accounts of each Member his proportionate
share of the increase or decrease in the fair market value of
his Accounts in each of the Funds, based on the fair market
value of the Funds on said Valuation Date.
4.09 Discretionary Power of the Pension Committee
The Pension Committee reserves the right to change from time to
time the procedures used in valuing any one or more of the
Accounts or crediting or debiting any one or more of the
Accounts if it determines, after due deliberation and upon the
advise of counsel and/or the current recordkeeper, that such an
action is justified in that it results in a more accurate
reflection of the fair market value of the Accounts. In the
event of a conflict between the provisions of Article 4 and
such new administrative procedures, the new administrative
procedures shall prevail.
4.10 Statement of Accounts
At least once a year, each Member shall be furnished with a
statement setting forth the value of his Accounts.<PAGE>
Article 5. Employer Stock Fund
The provisions of this Article shall become applicable to the
extent to which Accounts under the Plan are invested in the Zurn
Stock Fund or the U.S. Industries Stock Fund.
5.01 Zurn Stock Fund
(a) Effective February 1, 1996 or as soon thereafter as is
practicable and consistent with sound administration, the
Pension Committee shall make available under the Plan an
Investment Fund which shall consist exclusively of Common
Stock; provided, however, that a portion not exceeding ten
percent (10%) of the fair market value of the Fund may be held
in short-term interest-bearing investments or cash pending
purchase of Common Stock and to provide sufficient liquidity
for exchanges out of the Fund, withdrawals and loans. Such
Investment Fund shall be referred to as the "Zurn Stock Fund".
Except as otherwise provided in this Article 5, for periods
prior to the consummation of the USI Merger Transaction, a
Member or Covered Employee shall be permitted to invest all or
a portion of the contributions made on his behalf and/or his
Accounts in the Zurn Stock Fund in accordance with the
provisions of Article 4. Unless otherwise limited under the
terms of the trust agreement, the Trustee may purchase or sell
Common Stock on the open market or by privately-negotiated
transaction; provided however, that any such purchase or sale
shall be made only in exchange for fair market value as
determined by the Trustee and, provided further that, except
for purchases or sales of Common Stock on a stock exchange
registered with the Securities and Exchange Commission, no
commission shall be charged or paid with respect to any
purchase or sale of Common Stock by the Trustee. Any
distributions, dividends or other income received by the
Trustee with respect to the Zurn Stock Fund shall be
reinvested by the Trustee in the Zurn Stock Fund. The Pension
Committee shall provide, at such time and in such manner as it
shall determine in its discretion, whether share or unit
accounting be performed with respect to the Zurn Stock Fund.
(b) Effective as of the date the USI Merger Transaction is
consummated, the Zurn Stock held in the Zurn Stock Fund shall
be converted to U.S. Industries Stock and the Zurn Stock Fund
shall be converted to the U.S. Industries Stock Fund.
5.02 U.S. Industries Stock Fund
Effective as of the consummation of the USI Merger Transaction,
the Zurn Stock Fund shall be converted to the U.S. Industries
Stock Fund, an Investment Fund consisting exclusively of U.S.
Industries Stock; provided, however, that a portion not
exceeding ten percent (10%) of the fair market value of the
Fund may be held in short-term interest-bearing investments or
cash pending purchase of U.S. Industries Stock and to provide
sufficient liquidity for exchanges out of the Fund, withdrawals
and loans. Except as otherwise provided in this Article 5, a
Member or Covered Employee shall be permitted to invest all or
a portion of the contributions made on his behalf and/or his
Accounts in the U.S. Industries Stock Fund in accordance with
the provisions of Article 4. Unless otherwise limited under
the terms of the trust agreement, the Trustee may purchase or
sell U.S. Industries Stock on the open market or by privately-negotiated
transaction; provided however, that any such
purchase or sale shall be made only in exchange for fair market
value as determined by the Trustee and, provided further that,
except for purchases or sales of U.S. Industries Stock on a
stock exchange registered with the Securities and Exchange
Commission, no commission shall be charged or paid with respect
to any purchase or sale of U.S. Industries Stock by the
Trustee. Any distributions, dividends or other income received
by the Trustee with respect to the U.S. Industries Stock Fund
shall be reinvested by the Trustee in the U.S. Industries Stock
Fund. The Pension Committee shall provide, at such time and in
such manner as it shall determine in its discretion, whether
share or unit accounting be performed with respect to the U.S.
Industries Stock Fund.
5.03 Restrictions on Transfer and Withdrawal of Amounts Invested
in Zurn Stock Fund or U. S. Industries Stock Fund
(a) The restrictions in Section 5.03(b) shall apply to that
portion of Accounts maintained on behalf of Members, Covered
Employees, Beneficiaries and Alternate Payees which are
invested in the Zurn Stock Fund or U.S. Industries Stock Fund
and, if and to the extent necessary, any election made by a
Member, Covered Employee, Beneficiary or Alternate Payee under
the Plan shall be deemed modified to be consistent with this
Section 5.02.
(b) Notwithstanding the provisions of Sections 4.02, 4.05,
4.06 and Articles 7 and 8:
(i) No Member, Covered Employee, Beneficiary or Alternate
Payee shall, on the basis of material nonpublic information
with respect to the Company or its affiliates, make an
election permitted by those Sections or Articles if (A) such
election would result in an exchange into or out of, loans
from, withdrawals from, or an increase or decrease in the
amount of contributions to the Zurn Stock Fund, and (B) the
transaction resulting from such election is prohibited by
Rule 10b-5.
(ii) No officer shall make an election permitted by those
Sections or Articles if such election would result in a
transaction involving the Zurn Stock Fund which is not an
exempt transaction pursuant to Rule 16b-3.
(c) The provisions of Section 5.03(b) shall continue to apply
upon the consummation of the USI Merger Transaction by
substituting "U.S. Industries" for "Company" and by
substituting "U.S. Industries Stock Fund" for "Zurn Stock
Fund" in each place where the latter term is used.
(d) For purposes of this Section 5.03, the terms "Rule 10b-5"
and Rule 16b-3" shall mean the rules, as amended, having those
designations promulgated by the United States Securities and
Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended, and the terms "affiliate" and "officer"
shall have the meanings set forth in Rule 12b-2 and
Rule 16a-1(f), respectively, both as so promulgated and
amended.
5.04 Voting of Common Stock
(a) Each Member, Covered Employee, Beneficiary or Alternate
Payee who has an Account maintained on his behalf with an
investment in the Zurn Stock Fund shall have the following
powers and responsibilities:
(i) Prior to each annual or special meeting of the
shareholders of the Company, the Company shall cause to be
sent to each person described in Section 5.04(a), a copy of
the proxy solicitation material for such meeting, together
with a form requesting confidential voting instructions for
the voting of the Common Stock held in the Zurn Stock Fund in
proportion to the number of units of the Zurn Stock Fund held
by such a person's Accounts or, if applicable, the number of
full shares of Common Stock credited under the Zurn Stock
Fund to such a person s Accounts. Upon receipt of such a
person's instructions, the Trustee shall then vote in person,
or by proxy, such Common Stock as so instructed.
(ii) The Company shall cause the Trustee to furnish, as soon
as practicable after receipt by the Trustee, to each person
described in Section 5.04(a) notice of any tender or exchange
offer for, or a request or invitation for tenders or
exchanges of, Common Stock made to the Trustee. The Trustee
shall request from each such person instructions as to the
tendering or exchanging of Common Stock held in the Zurn
Stock Fund in proportion to the number of units of the Zurn
Stock Fund held by such a person's Accounts or, if
applicable, the number of full shares of Common Stock
credited under the Zurn Stock Fund to such a person s
Accounts. Within the time specified by the notice of any
tender or exchange offer for, or request or invitation for
tenders or exchanges of, Common Stock, the Trustee shall
tender or exchange such Common Stock as to which the Trustee
has received instructions to tender or exchange from the
persons described in Section 5.04(a).
(iii) Instructions received from the persons
described in Section 5.04(a) by the Trustee regarding the
voting, tendering, or exchanging of Common Stock held in the
Zurn Stock Fund shall be held in strictest confidence and
shall not be divulged to any other person, including
directors, officers or employees of the Company, except as
otherwise required by law, regulation or lawful process.
(b) Each Member, Covered Employee, Beneficiary or Alternate
Payee who has an Account maintained on his behalf with an
investment in the U.S. Industries Stock Fund shall have the
following powers and responsibilities:
(i) Prior to each annual or special meeting of the
shareholders of U.S. Industries, U.S. Industries or the
Company shall cause to be sent to each person described in
Section 5.04(b), a copy of the proxy solicitation material
for such meeting, together with a form requesting
confidential voting instructions for the voting of the Common
Stock held in the U.S. Industries Stock Fund in proportion to
the number of units of the U.S. Industries Stock Fund held by
such a person s Accounts or, if applicable, the number of
full shares of Common Stock credited under the U.S.
Industries Stock Fund to such a person s Accounts. Upon
receipt of such a person s instructions, the Trustee shall
then vote in person, or by proxy, such Common Stock as so
instructed.
(ii) U. S. Industries shall cause the Trustee to furnish, as
soon as practicable after receipt by the Trustee, to each
person described in Section 5.04(b) notice of any tender or
exchange offer for, or a request or invitation for tenders or
exchanges of, Common Stock made to the Trustee. The Trustee
shall request from each such person instructions as to the
tendering or exchanging of Common Stock held in the U.S.
Industries Stock Fund in proportion to the number of units of
the U.S. Industries Stock Fund held by such a person s
Accounts or, if applicable, the number of full shares of
Common Stock credited under the U.S. Industries Stock Fund to
such a person s Accounts. Within the time specified by the
notice of any tender or exchange offer for, or request or
invitation for tenders or exchanges of, Common Stock, the
Trustee shall tender or exchange such Common Stock as to
which the Trustee has received instructions to tender or
exchange from the persons described in Section 5.04(b).
(iii) Instructions received from the persons
described in Section 5.04(b) by the Trustee regarding the
voting, tendering, or exchanging of Common Stock held in the
U.S. Industries Stock Fund shall be held in strictest
confidence and shall not be divulged to any other person,
including directors, officers or employees of U.S.
Industries, except as otherwise required by law, regulation
or lawful process.
(c) The Trustee shall vote Common Stock for which the Trustee
does not receive affirmative direction in accordance with the
instructions of the Pension Committee. The Trustee shall, in
its discretion, determine whether to tender or exchange Common
Stock with respect to which the Trustee does not receive any
affirmative direction.
<PAGE>
Article 6. Vested Portion of Accounts
6.01 Deferred Account and Rollover Account
Members and Covered Employees having Rollover Accounts
maintained on their behalf shall at all times be 100% vested
in, and have a nonforfeitable right to, their Deferred Accounts
and their Rollover Accounts.
6.02 Employer Account
(a) Any Employee who is both (i) a Member as of August 1,
1997 and (ii) in the active employment of an Employer as of
August 1, 1997 shall at all times be 100% vested in, and have
a nonforfeitable right to, his Employer Account.
(b) Any Member who is not described in Section 6.02(a) shall
become vested in, and have a nonforfeitable right to, his
Employer Account as provided in the following schedule based
on Years of Vesting Service:
Years Vested
of (Nonforfeitable)
Vesting Percentage
Service
less than 1 0%
1 but less than 3 50%
3 or more 100%
(c) Notwithstanding the foregoing, a Member shall be 100%
vested in, and have a nonforfeitable right to, his Employer
Account upon death, Disability or the attainment of his Normal
Retirement Age.
6.03 Forfeitures and Restoration
(a) In the event a Member terminates his employment with all
Employers and Affiliated Employers prior to such time as he
becomes fully vested in accordance with Section 6.02, the
Member s nonvested interest in his Employer Account shall be
forfeited as of the earlier of:
(i) the date
on which the Member incurs a one-year Break in Service; or
(ii) the date
on which the Member receives a distribution of his Vested
Portion in accordance with Article 9.
As of such date of forfeiture, the Member shall no longer be
considered a Member hereunder.
(b) In the event an individual described in Section
6.03(a)(i) returns to the service of an Employer or Affiliated
Employer prior to both his receiving a distribution of his
Vested Portion and his incurring five (5) consecutive one-year
Breaks in Service such Employee shall have restored on his
behalf the full balance of his Employer Account that was
previously forfeited under Section 6.03(a)
(c) In the event an individual described in Section
6.03(a)(ii) returns to the service of an Employer as a Covered
Employee prior to incurring five (5) consecutive one-year
Breaks in Service, such Covered Employee may restore such
portion of his Employer Account as was forfeited under
paragraph (a) by repaying to the Plan the full amount of his
previous distribution. The period during which such repayment
must be made shall end on the earlier of the fifth anniversary
of the Covered Employee s reemployment or the date on which
the Covered Employee incurs five (5) consecutive one-year
Breaks in Service.
(d) Any forfeitures occurring under this Section 6.03 shall
be exchanged into, and held unallocated in, a suspense account
and may be used to reduce future Deferred Cash Contributions
and Employer Matching Contributions. In the event a suspense
account contains insufficient funds to effect a restoration of
an Employer Account as provided above, the deficiency in funds
shall be contributed without regard to the limitations set
forth in any Section of the Plan by the Employer of the
Employee at the time of his reemployment or, if the Member is
reemployed by an Affiliated Employer, by the Employer which is
designated to make the contribution by the Pension Committee.
(e) Employer Accounts restored under the provisions of this
Section 6.03 prior to the consummation of the USI Merger
Transaction shall be invested in the Zurn Stock Fund on behalf
of the affected Employees. Employer Accounts restored under
the provisions of this Section 6.03 on and after the
consummation of the USI Merger Transaction shall be invested
in the U.S. Industries Stock Fund on behalf of the affected
Employees.
<PAGE>
Article 7. Withdrawals While Still Employed
7.01 Withdrawal of Rollover Contributions
Subject to the provisions of Section 7.04, an active Employee
who meets the hardship criteria of Section 7.03 (treating as
ineffective for this purpose the last sentence of
Section 7.03(c)) may elect to make a cash withdrawal from his
Rollover Account.
7.02 Withdrawal After Age 59-1/2
Subject to the provisions of Section 7.04, an active Employee
who shall have attained age 59-1/2 as of the effective date of
any withdrawal pursuant to this Section may elect a withdrawal
of all or part of his Rollover Account or his Deferred Account.
The withdrawal may be in cash or, to the extent the Rollover
Account or Deferred Account is invested in the Zurn Stock Fund
or U.S. Industries Stock Fund, in shares of Common Stock not to
exceed the number of full shares of Common Stock credited under
the Zurn Stock Fund, or the U.S. Industries Stock Fund as the
case may be, to such person s Accounts or, if applicable, not
to exceed the whole number of shares represented by the
proportion of the units of the Zurn Stock Fund (or U.S.
Industries Stock Fund) in the Employee's Rollover Account or
Deferred Account to the total number of units of the Zurn Stock
Fund (or U.S. Industries Stock Fund) then outstanding.
Notwithstanding the preceding sentence, no withdrawal in shares
of Common Stock shall be made unless the withdrawal includes at
least 50 shares of Common Stock.
7.03 Hardship Withdrawal
(a) Subject to the provisions of Section 7.04, a Member may
elect to make a cash withdrawal of his Deferred Cash
Contributions (without any earnings) provided that he
furnishes proof of "hardship" satisfactory to the Pension
Committee in accordance with the provisions of
Sections 7.03(b) and (c).
(b) As a condition for hardship there must exist with respect
to the Member an immediate and heavy financial need to draw
upon his Accounts. The Pension Committee shall presume the
existence of such immediate and heavy financial need if the
requested withdrawal is on account of any of the following:
(i) Medical expenses described in Section 213(d) of the Code
incurred by the Member, his spouse or any of his dependents
(as defined in Section 152 of the Code) or expenses necessary
for these persons to obtain medical care described in Section
213(d) of the Code; or
(ii) Costs directly related to the purchase of a principal
residence of the Member (excluding mortgage payments); or
(iii) Payment of tuition and related
educational fees for a period not to exceed 12 months of
post-secondary school education of the Member, his spouse,
children or dependents; or
(iv) Payment of amounts necessary to prevent eviction of the
Member from his principal residence or to avoid foreclosure
on the mortgage on his principal residence; or
(v) The inability of the Member to meet such other expenses,
debts or other obligations recognized by the Internal Revenue
Service as giving rise to immediate and heavy financial need
for purposes of Section 401(k) of the Code.
In evaluating the relevant facts and circumstances, the
Pension Committee shall act in a nondiscriminatory fashion and
shall treat uniformly those Members who are similarly
situated. The Member shall furnish to the Pension Committee
such supporting documents as the Pension Committee may request
in accordance with uniform and nondiscriminatory rules
prescribed by the Pension Committee.
(c) As a condition for a hardship withdrawal, the Member must
certify (i) that the requested withdrawal is necessary to
satisfy the financial need described in Section 7.03(b) and
(ii) that the need cannot reasonably be relieved (A) through
reimbursement or compensation by insurance or otherwise; (B)
by reasonable liquidation of the Member's assets or the assets
of the Member's spouse and minor children reasonably available
to the Member, (C) by cessation of Deferred Cash Contributions
under the Plan, or (D) by other distributions or nontaxable
(at the time of the loan) loans from the Plan or other plans
of the Employer or by borrowing from commercial sources on
reasonable commercial terms. For purposes of the foregoing, a
need shall not reasonably be relieved by any of the actions
described in (A), (B), (C) or (D) if a Member demonstrates, to
the satisfaction of the Pension Committee, that the effect
would be to increase the amount of the need. The Member shall
furnish to the Pension Committee such supporting documents as
the Pension Committee may request in accordance with uniform
and nondiscriminatory rules prescribed by the Pension
Committee. If the Member's certification and supporting
documents are satisfactory to the Pension Committee in both
form and substance and the Pension Committee has no actual
knowledge contradicting the Member's certification and
supporting documents, the Pension Committee shall find that
the requested withdrawal is necessary to meet the Member's
financial need. Notwithstanding the foregoing, as a condition
of receiving a hardship withdrawal, a Member's Deferred Cash
Contributions shall be suspended for a period of at least 12
months after the date the Member receives the hardship
distribution.
(d) The Pension Committee shall have full discretionary
authority to modify the provisions of Section 7.03 provided
that any modification shall be evidenced by a writing in the
administrative record of the Pension Committee, shall be
consistently applied and shall not operate so as to reduce or
eliminate any benefit protected under Section 411(d)(6) of the
Code that has accrued as of the date of modification.<PAGE>
7.04 Procedures and Restrictions
To make a withdrawal, a Member or Employee must deliver Notice
to the Pension Committee or its designee within such time and
in accordance with such means as are designated by the Pension
Committee and communicated to Members. A withdrawal shall be
made as soon as administratively practicable after the first
day of any month, as elected by the Member or Employee,
following the date the Notice of withdrawal is delivered to the
Pension Committee or its designee. The withdrawal shall be
based upon the applicable Account(s) as of the Valuation Date
next preceding the date the withdrawal is made. Not more than
two withdrawals may be made in any Plan Year except that a
withdrawal under Section 7.03 may be made in addition to any
other withdrawal made during the Plan Year. The minimum
withdrawal shall be $500 or the total value of the Vested
Portion of the Accounts maintained on behalf of the person
making the withdrawal which are available for withdrawal, if
less. The amount of the withdrawal shall be allocated among
the Investment Funds as determined by the person making the
withdrawal.<PAGE>
Article 8. Loans to Members
8.01 Amount Available
(a) Subject to the provisions of Article 8, a Member who is
an Employee (and who is not on leave of absence or layoff) may
borrow an amount from his Accounts which, when added to the
outstanding balance of any other loans to the Member from the
Plan, does not exceed the lesser of: (i) 50% of the Vested
Portion of his Accounts; or (ii) $50,000 reduced by the
excess, if any, of (A) the highest outstanding balance of
loans to the Member from the Plan during the one year period
ending on the day before the day the loan is made, over (B)
the outstanding balance of loans to the Member from the Plan
on the date on which the loan is made. Notwithstanding the
foregoing, any Plan loan is contingent upon (i) the eligible
Member making application to the Pension Committee or its
designee by giving Notice within such time and in accordance
with such means as are designated by the Pension Committee and
communicated to Members and (ii) the Pension Committee's
approval of such application under such rules as it shall
adopt. A Plan loan shall be effective as soon as
administratively practicable after the first day of any month,
as elected by the eligible Member, following the date the
Notice of loan application is both delivered to the Pension
Committee or its designee and is approved by the Pension
Committee. No Plan loan shall be permitted to access amounts
in the Member s Employer Account. The minimum loan shall be
$1,000. Solely for purposes of Article 8, an Employee who is
not a Member but who has made a Rollover Contribution pursuant
to Section 3.03 shall be considered a "Member" of the Plan.
(b) The interest rate to be charged on loans shall be
determined as of the beginning of the month in which the
Member's loan application is received by the Pension Committee
and shall be 1% plus the prime rate of interest charged by
persons in the business of lending money for loans of similar
purpose and duration. The interest rate so determined shall
be fixed for the duration of each loan.
(c) The amount of the loan is to be transferred from the
Investment Funds in which the Member's Employee Account is
invested to a "Loan Fund" for the Member under the Plan. The
Loan Fund shall consist solely of the amount transferred to
the Loan Fund and such amount shall be invested solely in the
loan made to the Member. The amount transferred to the Loan
Fund shall be held as security for the loan. Payments of
principal on the loan will reduce the amount held in the
Member's Loan Fund. Those payments, together with the
attendant interest payment, will be reinvested in the
Investment Funds in accordance with the Member's then
effective investment election.
8.02 Terms
(a) In addition to such rules as the Pension Committee, in
its discretion, may adopt, all loans shall comply with the
following terms and conditions:
(i) An application for a loan by a Member shall be made by
Notice to the Pension Committee or its designee and the
action of the Pension Committee, in approving or disapproving
the application, shall be final;
(ii) Each loan shall be evidenced by a promissory note payable
to the Plan;
(iii) The period of repayment for any loan
shall be arrived at by mutual agreement between the Pension
Committee and the Member, but that period shall not exceed
five years unless the loan is to be used in conjunction with
the purchase of the principal residence of the Member, in
which case the period shall not exceed ten years;
(iv) Payments of principal and interest will be made by
payroll deductions implemented by the Employer or Affiliated
Employer or in such manner as may be agreed to by the Member
and the Pension Committee; provided, however, that any
repayment arrangement shall require repayment in
substantially level amounts, made no less frequently than
quarterly, in an amount sufficient to amortize the loan over
the repayment period;
(v) A loan may be prepaid in full as of any date without
penalty;
(vi) No more than one loan may be made to a given Member in
any calendar year;
(vii) No more than two loans may be
outstanding at any given time; and
(viii) The Pension Committee may require
Members to pay a reasonable fee to defray administrative
costs associated with each loan.
(b) If a loan is not repaid in accordance with the terms
contained in the promissory note and a default occurs, the
Plan may execute upon its security interest in the Member's
Accounts under the Plan to satisfy the debt; however, the Plan
shall not levy against any portion of the Member's Accounts
until such time as a distribution of the Member's Accounts
could otherwise be made under the Plan. In the event a Member
on whose behalf a Plan loan is outstanding transfers
employment to an Affiliated Employer and such loan is not
transferred to a qualified plan under which such Affiliated
Employer participates, such Affiliated Employer shall accept,
to the extent applicable under the terms of the loan
agreement, the duties and obligations of the Employer under
the repayment terms of the loan agreement.
(c) Any additional rules, procedures or restrictions
applicable to the administration of the loan program and which
may be required to be set forth in writing to satisfy the
requirements of Title 29 of the Code of Federal Regulations
Section 2550.408b-1(d) shall be contained in the application
and disclosure forms provided to prospective loan applicants
by the Pension Committee. Such further documentation is
hereby incorporated into the Plan by reference, and the
Pension Committee is hereby authorized to make such revisions
to these rules as it deems necessary or appropriate.
<PAGE>
Article 9. Distribution of Accounts Upon Termination of Employment
9.01 Eligibility
Upon a Member's termination of employment with all Employers
and Affiliated Employers, the Vested Portion of his Accounts,
as determined under Article 6, shall be distributed as provided
in this Article.
9.02 Form of Distribution
Distribution of the Vested Portion of a Member's Accounts shall
be made to the Member, or to his Beneficiary in the event of a
Member s death, in a cash lump sum; provided, however, that the
Member or Beneficiary may elect to have the Vested Portion of
the Accounts maintained on his behalf which is, as of the time
of distribution, invested in the Zurn Stock Fund or in the U.S.
Industries Stock Fund, paid in shares of Common Stock not to
exceed the number of full shares of Common Stock credited under
the Zurn Stock Fund, or the U.S. Industries Stock Fund as the
case may be, to such person s Accounts or, if applicable, not
to exceed the whole number of shares represented by the
proportion of the units of the Zurn Stock Fund (or U.S.
Industries Stock Fund) in the Member's Accounts to the total
number of units of the Zurn Stock Fund (or U.S. Industries
Stock Fund) then outstanding. Notwithstanding the preceding
sentence, no distribution in shares of Common Stock shall be
made unless the distribution includes at least 50 shares of
Common Stock.
9.03 Date of Payment of Distribution
(a) In the event of the termination of the Member's
employment with all Employers and Affiliated Employers, the
Member, or his Beneficiary in the event of the Member s death,
shall be paid the Vested Portion of the Member's Accounts in
the form of a lump sum if the fair market value of such Vested
Portion is not currently, and was not at the time of any prior
distribution, in excess of $3,500 (or, on and after June 1,
1998, $5,000). If, as of the time of any distribution, the
fair market value of the Vested Portion of the Member's
Accounts exceeds $3,500 (or, on and after June 1, 1998,
$5,000), the Member may elect payment of such Vested Portion
upon termination. In lieu thereof, a Member may elect to
defer payment of such amount until a later date by giving
Notice to the Pension Committee or its designee. Subject to
the terms of Section 9.04, the failure of any Member to make
an election with respect to Accounts, the Vested Portion of
which have a fair market value in excess of the $3,500
($5,000) threshold, shall be deemed to be an election by the
Member to defer payment of such Vested Portion. All
determinations of fair market value under this Article 9 shall
be made as of the applicable Valuation Date. Notwithstanding
the foregoing, distribution of the Vested Portion of a
Member's Accounts shall be made no later than the sixtieth
(60th) day after the latest of the close of the Plan Year in
which (i) the Member attains his Normal Retirement Age, or
(ii) the Member terminates employment with all Employers and
Affiliated Employers, unless the Member specifically elects to
defer distribution until a later date permitted under
Section 9.04. If a Member s Vested Portion is distributed
prior to a final allocation of Employer Matching Contributions
to which he is entitled hereunder, a final payment equal to
the additional allocation shall be made in cash on behalf of
the Member as soon as practicable following such allocation.
(b) The Pension Committee or its designee shall notify a
Member or Beneficiary of his election right under Section 9.02
and, in the case of a Member who may defer payment of the
Vested Portion of his Accounts in accordance with
Section 9.03(a), of his right to defer payment. Such
notification shall be provided to a Member or Beneficiary not
less than 30 days before the account is distributed without
the Member's or Beneficiary's affirmative election to be paid
the Vested Portion of the Member's Accounts. A Member's or
Beneficiary's affirmative election to be paid the Vested
Portion of the Member's Accounts may be implemented by the
Pension Committee or its designee less than 30 days after the
Member or Beneficiary receives the notice provided under this
Section 9.03(b).
(c) Notwithstanding any provision of the Plan to the
contrary, a Distributee may elect, subject to rules adopted by
the Pension Committee which shall be consistent with income
tax regulations, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee in a direct rollover to such
plan. The Pension Committee or its designee shall notify a
Distributee of his right to elect a direct rollover. Such
notice shall be provided to the Distributee not less than 30
days before the account is distributed without the
Distributee's affirmative election to make or not make a
direct rollover. A Distributee's affirmative election to make
or not make a direct rollover may be implemented by the
Pension Committee less than 30 days after the Distributee
receives such notice of his direct rollover rights, but only
if the Pension Committee or its designee notifies the
Distributee that he has the right to consider the decision of
whether or not to elect a direct rollover for up to 30 days.
A Distributee who is eligible for an automatic lump sum
distribution under Section 9.03(a) and who has been given a
timely notice and explanation of the election to have his
Eligible Rollover Distribution paid to an Eligible Retirement
Plan, will be presumed to have elected to have his benefit
paid directly to him if the Distributee fails to make the
election within 31 days of being notified of his rights to
make the election. Notwithstanding the provisions of this
Section, in the event the provisions of Section 9.03(c) should
not be required as a condition for plan qualification under
Section 401(a) of the Code, it shall automatically be deemed
null, void, and of no force or effect. For purposes of this
Section:
(i) The term "Distributee" shall mean an Employee or former
Employee. In addition, such an individual's surviving spouse
or such an individual's spouse or former spouse who is an
alternate payee within the meaning of Section 414(p)(8) of
the Code are Distributees with respect to the interest of the
spouse or former spouse.
(ii) The term "Eligible Rollover Distribution" shall mean any
distribution of all or any portion of the balance to the
credit of the Distributee other than (A) any distribution
that is one of a series of substantially equal periodic
payments made for the life, or life expectancy, of the
Distributee or the joint lives, or joint life expectancies,
of the Distributee and his beneficiary, or for a specified
period of ten years or more, (B) any distribution to the
extent such distribution is required under Section 401(a)(9)
of the Code, and (C) the portion of any distribution that is
not includible in gross income.
(iii) The term "Eligible Retirement Plan"
shall mean an individual retirement account or annuity, as
described in Sections 408(a) and 408(b) of the Code,
respectively, an annuity plan described in Section 403(a) of
the Code, or a qualified trust described in Section 401(a) of
the Code that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to a surviving spouse, an "Eligible Retirement
Plan" is an individual retirement account or annuity.
9.04 Required Distributions
(a) Distribution of the Vested Portion of the Accounts
maintained on behalf of a Member who attained the age of 70-1/2
in 1995 or any prior calendar year must commence no later
than the April 1st of the calendar year following the calendar
year in which the Member attains age 70-1/2. Effective
January 1, 1997 with respect to any employed Member who
attains age 70-1/2 during or after the 1996 calendar year,
distribution of the Vested Portion must commence no later than
the April 1st of the calendar year following the calendar year
in which the Member retires; provided, however, that if the
Member is a five percent (5%) owner (as described in Section
416(i) of the Code) during the calendar year in which he
attains age 70-1/2 or in any subsequent calendar year,
distribution must commence to the Member no later than the
April 1st of the calendar year following the calendar year in
which the Member is both age 70-1/2 and a five percent (5%)
owner.
(b) In the event a Member is an Employee and is required to
begin receiving payments under the provisions of
Section 9.04(a), the Member shall receive a lump sum
distribution, made in accordance with Section 9.02, on or
before the date specified in Section 9.04(a). The amount of
the lump sum shall be equal to the fair market value of the
Vested Portion of the Member's Accounts. Thereafter, in each
distribution calendar year, the Plan shall distribute to the
employed Member a lump sum payment made in accordance with
Section 9.02 which shall be equal to the fair market value of
the Vested Portion of the Member Accounts which accrued during
such calendar year. The commencement of payments under
Section 9.04 while a Member is an Employee shall be considered
an Annuity Starting Date for purposes of Section 72, Section
401(a)(11) and Section 417 of the Code.
(c) Except as provided under Section 9.03(a), a distribution
to a Beneficiary shall be made as soon as administratively
practicable following the Member's date of death. In no event
shall distribution to a Beneficiary be made later than the
December 31 of the calendar year which contains the fifth
anniversary of the Member's death.
9.05 Distributions Under a Qualified Domestic Relations Order
(a) Upon determination by the Pension Committee that a
domestic relations order is a "qualified domestic relations
order" as described in Section 414(p) of the Code, the
following shall apply:
(i) If the fair market value of the vested interest to be
distributed to an Alternate Payee does not exceed $3,500,
such vested interest shall be paid to the Alternate Payee in
the form of a cash lump sum. Such payment shall be made as
soon as practicable following the creation of such Alternate
Payee's interest.
(ii) If the fair market value of the vested interest to be
distributed to an Alternate Payee exceeds $3,500, the
Alternate Payee may elect to be paid such vested interest as
soon as administratively practicable in the form of a cash
lump sum or may elect to receive the fair market value of
such vested interest in a cash lump sum at any time after the
"earliest retirement age" described in Section 414(p)(4)(B)
of the Code.
(b) To the extent that, because of a qualified domestic
relations order, more than one individual is to be treated as
a Beneficiary of a Member, the total amount payable from the
Plan as a result of the death of the Member shall not exceed
the amount that would be payable if there were only one
Beneficiary.
9.06 Status of Accounts Pending Distribution
Until distributed under Section 9.03, 9.04 or 9.05, the
Accounts of Members, Beneficiaries and Alternate Payees shall
continue to be invested as part of the assets of the Plan. A
Member or an Alternate Payee may reallocate the Account(s)
maintained on his behalf among the Investment Funds offered
under the Plan in accordance with Article 4. A Beneficiary
shall not be permitted to reallocate the Accounts of a deceased
Member among such Investment Funds.
9.07 Proof of Death and Right of Beneficiary or Other Person
The Pension Committee may require and rely upon such proof of
death and such evidence of the right of any Beneficiary or
other person to receive the value of the Accounts of a deceased
Member as the Pension Committee may deem proper and its
determination of the right of that Beneficiary or other person
to receive payment shall be conclusive.
<PAGE>
9.08 Distribution Limitation
Notwithstanding any other provision of this Article 9, all
distributions from the Plan shall conform to the regulations
issued under Section 401(a)(9) of the Code, including the
incidental death benefit provisions of Section 401(a)(9)(G) of
the Code. Further, such regulations shall override any Plan
provision that is inconsistent with Section 401(a)(9) of the
Code.<PAGE>
Article 10. Administration of Plan
10.01 Appointment of Pension Committee
The general administration of the Plan and the responsibility
for carrying out the provisions of the Plan shall be placed in
a Pension Committee of not less than three persons appointed,
together with the chairman of the Pension Committee, from time
to time by the Board of Directors to serve at the will of the
Board of Directors. Any member of the Pension Committee may
resign by delivering his written resignation to the Board of
Directors and the Secretary of the Pension Committee. The
chairman of the Pension Committee shall serve as secretary or
shall appoint a secretary who may, but need not, be one of the
members of the Pension Committee. The members of the Pension
Committee may appoint from their number such subcommittees with
such powers as they shall determine, provided such powers are
consistent with the provisions of Section 10.02, and may
authorize one or more of their number or any agent to execute
or deliver any instrument or make any payment on their behalf.
Whenever any action is required or permitted to be taken in the
administration of the Plan, such action shall be taken by the
Pension Committee unless the Pension Committee's power is
expressly limited herein or by operation of law. Unless
otherwise delegated by the Pension Committee, the Pension
Committee shall be the Plan "Administrator", as such term is
defined in Section 3(16) of ERISA.
10.02 Powers of Pension Committee
The Pension Committee shall have sole and absolute discretion
to interpret and apply the provisions of the Plan to determine
the rights and status of Covered Employees, Members and all
others under the Plan, to decide disputes arising under the
Plan, and to make any determinations and findings of fact with
respect to benefits payable hereunder and the persons entitled
thereto as may be required for any purpose under the Plan.
Without limiting the generality of the above, the Pension
Committee is hereby granted the following authority which it
shall discharge in its sole and absolute discretion in
accordance with Plan provisions as interpreted by the Pension
Committee:
(a) To make all determinations of fact relating to the
eligibility of any Employee to become a Member, to make
Deferred Cash Contributions, to receive allocations of
Employer Matching Contributions and to receive distributions
from the Plan.
(b) To authorize the Trustee to make payment of benefits from
the trust fund to Members, Alternate Payees and Beneficiaries
entitled to such benefits under the Plan and to establish
procedures governing the manner in which such authorizations
will be made.
(c) To develop procedures for the establishment and
verification of service and Compensation of Members, and,
after affording Members and the Employer an opportunity to
make objection with respect thereto, to establish such facts
conclusively from time to time in advance of retirement.
(d) To obtain from the Employer, Members, Alternate Payees
and Beneficiaries such information as shall be necessary for
the proper administration of the Plan.
(e) To establish rules and procedures relating to the
administration of the Plan and the transaction of its business
and to enforce the rules and procedures in the manner in which
it sees fit.
(f) To retain counsel, employ agents and provide for such
clerical, accounting and consulting services as may be
necessary or appropriate in connection with the administration
of the Plan.
(g) To perform all reporting and disclosure requirements
imposed upon the Plan by ERISA, the Code, the Securities Act
of 1933, as amended, the Securities and Exchange Act of 1934,
as amended, or any other lawful authority.
(h) To ensure that procedures are established which are
sufficient to safeguard the confidentiality of information
relating to the purchase, holding, and sale of Common Stock
held in the Zurn Stock Fund or U.S. Industries Stock Fund and
the exercise of voting, tender, and similar rights with
respect to Common Stock held in the Zurn Stock Fund or U.S.
Industries Stock Fund and to ensure that such procedures are
being followed.
(i) To appoint and remove an independent Fiduciary for the
purpose of carrying-out activities relating to any situations
which the Pension Committee determines involves an
unreasonable potential for undue Employer influence with
regard to the direct or indirect exercise of shareholder
rights with respect to Common Stock holdings in the Zurn Stock
Fund or U.S. Industries Stock Fund.
(j) To take such steps as it, in its discretion, considers
necessary or appropriate to remedy any inequity under the Plan
that results from incorrect information received or
communicated or as the consequence of administrative error.
(k) To correct any defect, reconcile any inconsistency or
supply any omission under the Plan.
(l) To allocate among its members or, except as provided
otherwise herein, to delegate to other persons all or a
portion of its powers and duties as it sees fit.
(m) To exercise such other authority and responsibility as is
specifically assigned to it under the terms of the Plan and to
perform any other acts necessary to the performance of its
powers and duties.
All powers of the Pension Committee shall be exercised in a
uniform manner consistent with all provisions of the Plan
unless the power is being exercised in order to correct or
reconcile provisions which are inconsistent.
10.03 Individual Accounts
The Pension Committee shall maintain, or cause to be
maintained, records showing the individual balances in each
Account maintained on behalf of Members and other persons under
the Plan. However, maintenance of those records and Accounts
shall not require any segregation of the funds of the Plan.
<PAGE>
10.04 Meetings
The Pension Committee shall hold meetings upon such notice, at
such place or places, and at such time as it may from time to
time determine.
10.05 Action of Majority
Any act which the Plan authorizes or requires the Pension
Committee to do may be done by a majority of its members. The
action of that majority expressed from time to time by a vote
at a meeting, or in writing without a meeting, shall constitute
the action of the Pension Committee and shall have the same
effect for all purposes as if assented to by all members of the
Pension Committee at the time in office. All decisions of the
Pension Committee, including those regarding the facts of any
case, the interpretation of any provision of the Plan or its
application to any case, and as to any other interpretative
matter or other determination or question under the Plan shall
be final and binding upon the Employer, Covered Employees,
Members, Alternate Payees, Beneficiaries and all other persons,
subject to the provisions of Section 12.06. Any action taken
by the Pension Committee with respect to the rights or benefits
of any person under the Plan shall be revocable by the Pension
Committee as to payments or distributions from the trust fund
not theretofore made pursuant to such action; and appropriate
adjustments may be made in future payments or distributions to
a Member, Alternate Payee or Beneficiary to offset any excess
payment or make up for any underpayment previously made to such
Member, Alternate Payee or Beneficiary from the trust fund. No
ruling or decision of the Pension Committee in any one case
shall create a basis for an adjustment in any other case prior
to the date of written filing of each specific claim.
10.06 Compensation and Bonding
No member of the Pension Committee shall receive any
compensation from the assets of the trust fund for his services
as such. Except as may otherwise be required by law, no bond
or other security need be required of any member in that
capacity in any jurisdiction.<PAGE>
10.07 Prudent Conduct
The members of the Pension Committee shall use that degree of
care, skill, prudence and diligence that a prudent man acting
in a like capacity and familiar with such matters would use in
his conduct in a similar situation.
10.08 Service in More Than One Fiduciary Capacity
Any individual, entity or group of persons may serve in more
than one Fiduciary capacity with respect to the Plan or the
funds of the Plan.
10.09 Limitation of Liability
The Employer, the Board of Directors, the members of the
Pension Committee, its delegates and appointees or any other
person who may be determined to be a Fiduciary, other than
persons who are independent of the Employer and are rendering
services to or with respect to the Plan, and any officer or
employee of the Employer shall not incur any liability
individually or on behalf of any other individuals or on behalf
of the Employer for any act or failure to act, made in good
faith in relation to the Plan or the funds of the Plan.
However, this limitation shall not act to relieve any such
individual or the Employer from a responsibility or liability
for any fiduciary responsibility, obligation or duty under Part
4, Title I of ERISA.
10.10 Indemnification
The members of the Pension Committee, its delegates and
appointees or any other person who may be determined to be a
Fiduciary, other than persons who are independent of the
Employer and are rendering services to or with respect to the
Plan, the Board of Directors and the officers or employees of
the Employer shall be indemnified against any and all
liabilities arising by reason of any act, or failure to act, in
relation to the Plan or the funds of the Plan, including,
without limitation, expenses reasonably incurred in the defense
of any claim relating to the Plan or the funds of the Plan, and
amounts paid in any compromise or settlement relating to the
Plan or the funds of the Plan, except for actions or failures
to act made in bad faith. The foregoing indemnification shall
be paid from any insurance purchased by, or on behalf of, the
Employer for this purpose and, to the extent of any deductible
amount from the insurance coverage, excess of an insured amount
or any uninsured amount from the assets of the Employer, the
Company or the Company's wholly-owned subsidiaries; otherwise,
from the funds of the Plan to the extent of those funds and to
the extent permitted under applicable law.
10.11 Delegation of Fiduciary Responsibility
Any named Fiduciary may, by an instrument in writing filed with
the Plan records, delegate a Fiduciary responsibility which it
is obligated to discharge to another person or party who shall,
as a consequence, be a Fiduciary; provided, however, that no
such delegation shall contravene the provisions of ERISA nor
conflict with a prior, written determination by the Pension
Committee or the Company that certain duties and
responsibilities are nondelegable.<PAGE>
Article 11. Management of Funds
11.01 Trust Agreement
All the funds of the Plan shall be held by the Trustee
appointed from time to time by the Pension Committee under a
trust agreement adopted, or as amended, by the Pension
Committee for use in providing the benefits of the Plan and
paying its expenses not paid directly by the Employer. The
Pension Committee shall establish the funding policy of the
Plan, which shall set forth the current liquidity needs and
investment philosophy, and which shall be communicated from
time to time to the Trustee and any investment manager
appointed pursuant to Section 11.03. However, no person or
entity other than the Plan shall have any liability for the
payment of benefits under the Plan.
11.02 Exclusive Benefit Rule
Except as otherwise provided in the Plan, no part of the corpus
or income of the funds of the Plan shall be used for, or
diverted to, purposes other than for the exclusive benefit of
Members and other persons entitled to benefits under the Plan;
provided, however, the Vested Portion of the Accounts
maintained on behalf of a Member, Covered Employee, Alternate
Payee, or Beneficiary shall be escheated to the state of such
person's last known address in the United States of America no
later than the last date prescribed by such state's statutes
pertaining to the disposition of unclaimed property if the
whereabouts of such person or his Beneficiary has been unknown
to the Pension Committee or its delegates and appointees for
the time period specified in such statutes. No person shall
have any interest in or right to any part of the earnings of
the funds of the Plan, or any right in, or to, any part of the
assets held under the Plan, except as and to the extent
expressly provided in the Plan.
11.03 Appointment of Investment Manager
The Pension Committee may, in its discretion, appoint one or
more investment managers (within the meaning of Section 3(38)
of ERISA) to manage all or part of the assets of the Plan,
including the power to acquire and dispose of said assets, as
the Pension Committee shall designate. In that event authority
over and responsibility for the management of the assets so
designated shall be the sole responsibility of that investment
manager.
11.04 Expenses of Plan
All reasonable expenses, taxes and fees of the Plan, the
Pension Committee and the Trustee incurred in the
administration of the Plan and trust fund (other than taxes on
remuneration for providing services to the Plan and expenses
incurred for which a fee is paid) shall be paid from the trust
fund; provided, however, that the obligation of the trust fund
to pay such expenses, taxes and fees shall cease to exist to
the extent that the same are paid, at the discretion of the
Employer, by the Employer.<PAGE>
Article 12. General Provisions
12.01 Nonalienation
Neither the trust fund nor any benefit or Account held under
the Plan shall in any manner be liable for or subject to the
debts or liabilities of any Member, Beneficiary or Alternate
Payee. No right or benefit under the Plan shall at any time be
subject to alienation, sale, transfer, assignment, pledge or
encumbrances of any kind and any attempt to do so shall be
void. However, payment shall be made in accordance with the
provisions of any judgment, decree, or order which:
(a) Creates for, or assigns to, an Alternate Payee the right
to receive all or a portion of the Member's benefits under the
Plan for the purpose of providing child support, alimony
payments or marital property rights to that Alternate Payee;
(b) Is made pursuant to a State domestic relations law;
(c) Does not require the Plan to provide any type of benefit,
or any option, not otherwise provided under the Plan; and
(d) Otherwise meets the requirements of Section 206(d) of
ERISA, as amended, as a "qualified domestic relations order,"
as determined in accordance with Section 9.05.
12.02 Conditions of Employment Not Affected by Plan
The establishment and maintenance of the Plan shall not confer
any legal rights upon any Employee or other person for a
continuation of employment, nor shall it interfere with the
rights of an Employer or Affiliated Employer to discharge any
Employee and to treat him without regard to the effect which
that treatment might have upon him as a Member or potential
Member of the Plan.
12.03 Facility of Payment
If the Pension Committee shall find that a Member, Beneficiary
or other person entitled to a benefit is unable to care for his
affairs because of illness or accident or is a minor, the
Pension Committee may direct that any benefit due him, unless
claim shall have been made for the benefit by a duly appointed
legal representative, be paid to his spouse, a child, a parent
or other blood relative, or to a person with whom he resides.
Any payment so made shall be a complete discharge of the
liabilities of the Plan for that benefit.
12.04 Information
Each Member, Beneficiary or other person entitled to a benefit,
before any benefit shall be payable to him or on his account
under the Plan, shall file with the Pension Committee the
information that it shall require to establish his rights and
benefits under the Plan. The Pension Committee and any member,
delegate or appointee thereof shall be entitled to rely on the
correctness of any information furnished by the Employer,
Trustee, Members, Alternate Payees and Beneficiaries.
12.05 Construction
(a) The Plan shall be construed, regulated and administered
under ERISA and the laws of the State of Texas, except where
ERISA controls.
(b) The masculine pronoun shall mean the feminine wherever
appropriate.
(c) Any terms defined in the singular shall mean the plural
wherever appropriate.
(d) The titles and headings of the Articles and Sections in
this Plan are for convenience only. In the case of ambiguity
or inconsistency, the text rather than the titles or headings
shall control.
12.06 Benefit Claim Appeals
Claims for benefits under the Plan shall be filed on forms
prescribed by the Pension Committee. Written notice of the
disposition of the claim shall be furnished to the claimant
within 90 days after the application therefor is filed. This
response deadline may be extended for another 90 days in
special cases provided the claimant is notified of the delay
and the reasons therefor. In the event the claim is denied,
the reasons for the denial shall be specifically set forth,
pertinent provisions of the Plan shall be cited and, where
appropriate, the explanation as to how the claimant can perfect
the claim shall be provided. Any Employee, former Employee,
Beneficiary or Alternate Payee who has been denied a benefit or
feels aggrieved by any other action of the Employer, the
Pension Committee or the Trustee shall have the right, to be
exercised by written application filed with the Pension
Committee within 60 days after receipt of notice of the denial
of such claim, to request a review of such claim. A request
for review which is not timely filed shall be barred. A
claimant's request for review may contain such additional
information and comments as the claimant may wish to present.
The Pension Committee shall reconsider the claim in the light
of such additional information and comments as the claimant may
have presented, and, if the claimant shall have so requested,
shall afford him or his designated representative a hearing
before the Pension Committee. The Pension Committee shall also
permit the claimant or his designated representative to review
pertinent documents in its possession, including copies of the
Plan document and information provided by the Employer relating
to the claim. The Pension Committee shall make a final
determination with respect to the claim as soon as practicable,
although not later than 60 days after the receipt of the
aforesaid request for review. This 60-day period may be
extended under special circumstances, such as the necessity for
holding a hearing, but in no event beyond the expiration of 120
days after the receipt by the Pension Committee of such request
for review. Notice of the final determination of the Pension
Committee shall be furnished to the claimant in writing, in a
manner calculated to be understood by him, and shall set forth
the specific reasons for the decision and specific references
to the pertinent provisions of this Plan upon which the
decision is based. The decision of the Pension Committee in
such case shall be final and binding on the Employer, the
claimant, all persons claiming by or through the claimant, all
Employees, Members, Alternate Payees, Beneficiaries and all
other persons.
<PAGE>
12.07 Severability
If any provision of this Plan is held to be invalid or
unenforceable, such determination shall not affect the other
provisions of this Plan. In such event, this Plan shall be
construed and enforced as if such provision had not been
included herein.
12.08 Employer Records
The records of a Member's Employer shall be presumed to be
conclusive of the facts concerning his employment or non-employment,
Hours of Service, Years of Eligibility Service and
Compensation unless shown beyond a reasonable doubt to be
incorrect.
12.09 Application of Plan Provisions
This Plan shall be binding on all Members, Alternate Payees and
Beneficiaries and upon heirs, executors, administrators,
successors, and assigns of all persons having an interest
herein. The provisions of the Plan in no event shall be
considered as giving any such person any legal or equitable
right against the Employer or an Affiliated Employer, any of
its officers, Employees, directors, or shareholders, or against
the Trustee, except such rights as are specifically provided
for in the Plan or hereafter created in accordance with the
terms of the Plan.
12.10 IRC 414(u) Compliance Provision
Notwithstanding any provision of the Plan to the contrary and
effective as of October 1, 1996, contributions, benefits and
service credit with respect to qualified military service shall
be provided in accordance with Section 414(u) of the Code.<PAGE>
Article 13. Amendment, Merger and Termination
13.01 Amendment of Plan
The Board of Directors reserves the right at any time and from
time to time, and retroactively if deemed necessary or
appropriate, to amend in whole or in part any or all of the
provisions of the Plan. Any such amendment shall be expressed
in an instrument executed, adopted or ratified by the Board of
Directors, or executed by such Board's delegate. However, no
amendment shall make it possible for any part of the funds of
the Plan to be used for, or diverted to, purposes other than
for the exclusive benefit of persons entitled to benefits under
the Plan. No amendment shall be made which has the effect of
(i) decreasing the balance of the Accounts of any Member,
Beneficiary or Alternate Payee, (ii) eliminating an optional
form of benefit in a manner contrary to Section 411(d)(6) of
the Code and regulations promulgated thereunder, or (iii)
reducing the nonforfeitable percentage of the balance of any
Accounts below the nonforfeitable percentage computed under the
Plan as in effect on the date on which the amendment is adopted
or, if later, the date on which the amendment becomes
effective. In the event an amendment is made that changes the
schedule of vesting under the Plan, each Member having not less
than three Years of Vesting Service shall be permitted to
elect, within 60 days after the later of: (i) adoption of the
amendment; (ii) the effective date of the amendment; or (iii)
the date on which the Member receives written notice of such
amendment, to have his nonforfeitable benefits computed under
the Plan without regard to such amendment.
13.02 Merger, Consolidation or Transfer
(a) The Plan may not be merged or consolidated with, and its
assets or liabilities may not be transferred to, any other
plan unless each person entitled to benefits under the Plan
would, if the resulting plan were then terminated, receive a
benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he
would have been entitled to receive immediately before the
merger, consolidation, or transfer if the Plan had then
terminated.
(b) Effective as of January 1, 1998, the Zurn/NEPCO
Retirement Savings Plan shall be merged into the Plan and,
except as otherwise specifically provided herein, the
provisions of the Plan shall in all respects govern the
maintenance and distribution of Accounts brought under the
Plan as a result of such merger.
13.03 Additional Participating Employers
(a) If any company is or becomes a subsidiary of or
associated with the Company or any of its subsidiaries or
associated companies, the Pension Committee may designate such
company as an Employer upon appropriate action necessary to
adopt the Plan being taken by that company. In that event, or
if any persons become Covered Employees of an Employer as the
result of merger or consolidation or as the result of
acquisition of all or part of the assets or business of
another company, the Pension Committee shall determine to what
extent, if any, previous service with the subsidiary,
associated or other company shall be recognized under the
Plan, but subject to the continued qualification of the trust
for the Plan as tax-exempt under the Code.
(b) Any Employer may terminate its participation in the Plan
upon appropriate action by it. In that event, the funds of
the Plan held on account of Members in the employ of that
Employer, and any unpaid balances of the Accounts of all
Members who have separated from the employ of that Employer,
shall be determined by the Pension Committee. Those funds
shall be distributed as provided in Section 13.04 if the Plan
should be terminated, or shall be segregated by the Trustee as
a separate trust, pursuant to certification to the Trustee by
the Pension Committee, continuing the Plan as a separate plan
for the employees of the former Employer under which the board
of directors of that company shall succeed to all the powers
and duties of the Board of Directors, including the
appointment of a plan administrator.
13.04 Termination of Plan
(a) The Board of Directors may terminate the Plan or
completely discontinue contributions under the Plan for any
reason at any time. In case of termination or partial
termination of the Plan, or complete discontinuance of
Employer contributions to the Plan, the rights of affected
Members to their Accounts under the Plan as of the date of the
termination or discontinuance shall be nonforfeitable.
(b) Upon termination of the Plan, Accounts maintained on
behalf of Members, Beneficiaries and Alternate Payees shall be
distributed to such persons as soon as administratively
practicable, provided that (i) neither the Employer nor an
Affiliated Employer establishes or maintains a "successor
plan" within the meaning of Section 1.401(k)-1(d)(3) of the
Income Tax Regulations, and (ii) payment is made in the form
of a lump sum distribution. If Accounts are not distributable
in accordance with the preceding sentence, such Accounts shall
be maintained in a manner consistent with Income Tax
Regulations.
13.05 Distribution of Accounts Upon a Sale of Assets
Upon the disposition by the Employer, to an unrelated entity,
of substantially all of the assets (within the meaning of
Section 1.401(k)-1(d)(4) of the Income Tax Regulations) used by
the Employer in a trade or business, Accounts maintained on
behalf of Members may be distributed to those Members who
continue in employment with the unrelated entity acquiring such
assets, provided that (a) the Employer continues to maintain
the Plan, (b) the unrelated entity acquiring such assets does
not maintain the Plan, and (c) payment is made to the Member in
the form of a lump sum distribution.
<PAGE>
13.06 Distribution of Accounts Upon a Sale of a Subsidiary
Upon the disposition of the Employer by its owner to an
unrelated entity of the owner's majority ownership interest in
the Employer (within the meaning of Section 1.401(k)-1(d)(4) of
the Income Tax Regulations), Accounts maintained on behalf of
Members may be distributed to those Members who continue in
employment with such subsidiary, provided that (a) the Employer
continues to maintain the Plan, (b) the unrelated entity
acquiring such subsidiary does not maintain the Plan, and (c)
payment is made to the Member in the form of a lump sum
distribution.<PAGE>
Article 14. Top-Heavy Provisions
The terms of this Article shall become applicable under the
circumstances described in this Article. In the event that the
terms contained in this Article are inconsistent with the terms
contained in the remainder of the Plan, the terms contained in this
Article shall take precedence.
14.01 Top-Heaviness Defined
(a) For purposes of this Article, the Plan shall be "top-heavy" if,
as of the Determination Date:
(i) The value of the aggregate of the Account Balances under
the Plan for Key Employees exceeds 60% of the value of the
aggregate of the Account Balances under the Plan for all Key
Employees and Non-Key Employees; or
(ii) The Plan is part of a Required Aggregation Group, and the
sum of the present values of the cumulative Account Balances
and the aggregate present values of accrued benefits of Key
Employees in all plans in the Required Aggregation Group
exceeds 60% of a similar sum determined for all Key Employees
and Non-Key Employees. Notwithstanding the results of the
said 60% test, the Plan shall not be considered "top-heavy"
for any Plan Year in which the Plan is in a Required
Aggregation Group or the Employer elects to treat the Plan as
a part of a Permissive Aggregation Group and such group is
not determined to be "top-heavy".
(b) For purposes of this Article, the following terms shall
have the meanings assigned to them in this Section 14.01(b):
(i) Account Balance means the sum of (i) the balance of a
Member's Accounts as of the most recent Valuation Date
occurring within the 12-month period ending on the
Determination Date, and (ii) the value of any contributions
actually made after the Valuation Date but on or prior to the
Determination Date. The term shall include the aggregate
distributions made with respect to such Member under the Plan
during the five-year period ending on the Determination Date
but shall not include any qualifying rollover distributions,
or similar transfers, initiated by the Employee, and shall
not include the account balance of a Non-Key Employee who was
a Key Employee for any prior Plan Year, or the account
balance of any Member who has not performed services for the
Employer during the five-year period ending on the
Determination Date.
(ii) Defined Benefit Plan means a qualified pension plan which
is not a Defined Contribution Plan; however, in the case of a
Defined Benefit Plan which provides a benefit which is based
partly on the balance of the separate account of a Member,
that plan shall be treated as a Defined Contribution Plan to
the extent benefits are based on the separate account of a
Member and as a Defined Benefit Plan with respect to the
remaining portion of the benefits under the plan.
(iii) Defined Contribution Plan means a
qualified plan which provides for an individual account for
each Member and for benefits based solely upon the amount
contributed to the Member's account, and any income,
expenses, gains and losses, and any forfeitures of accounts
of other Members which may be allocated to that Member's
accounts, subject to Section 14.01(b)(ii).
(iv) Determination Date means the last day of the Plan Year
preceding the Plan Year in question, or in the case of the
first Plan Year, the last day of that Plan Year.
(v) 5% Owner of the Employer means any person who either
directly or constructively (as defined in Section 318 of the
Code) owns more than 5% of either the value of the
outstanding stock of the Employer or the total combined
voting power of all of the Employer's stock.
(vi) Employee includes such Beneficiary or Beneficiaries who
obtain an interest in the Plan by Beneficiary designation,
will, devise or through the laws of intestacy.
(vii) Key Employee means any Employee or
former Employee who participated in the Plan at any time
during the Plan Year ending on the Determination Date, or
during any of the four preceding Plan Years, and was:
(A) An Officer of the Employer with
Statutory Compensation from the Employer greater than 50%
of the amount in effect under Section 415(b)(1)(A) of the
Code;
(B) A 5% Owner of the Employer;
(C) One of the Top Ten Owners of the
Employer; or
(D) A 1% Owner of the Employer having
Statutory Compensation from the Employer or an Affiliated
Employer of more than $150,000.
The term shall also include Beneficiaries of Key Employees.
(viii) Non-Key Employee means any Employee who
is not a Key Employee.
(ix) Officer means an Employee who, at any time during the
Plan Year or any four preceding Plan Years, served as an
administrative executive for the Employer or an Affiliated
Employer on a regular and continuous basis and during the
applicable year had Statutory Compensation from the Employer
or an Affiliated Employer greater than 50% of the amount in
effect under Section 415(b)(1)(A) of the Code. The maximum
number of Employees who shall be deemed to be Officers for
purposes of this Article shall be the lesser of:
(A) 50, or
(B) The greater of three, or 10% of all
Employees.
If the actual number of officers of the Employer exceeds the
maximum number of Employees who are deemed to be Officers
hereunder, the maximum number of Officers for purposes of
this Article shall include those Officers who had the highest
one-year Statutory Compensation while serving as an officer
of the Employer during any applicable Plan Year.
(x) 1% Owner of the Employer means any person, who either
directly or constructively (as defined in Section 318 of the
Code) owns more than 1% of either the outstanding stock of
the Employer or the total combined voting power of all of the
Employer's stock.
(xi) Permissive Aggregation Group means each plan in the
Required Aggregation Group and any other Defined Benefit Plan
and Defined Contribution Plan of the Employer or an
Affiliated Employer with contributions or benefits at least
comparable to the contributions or benefits under the Plan in
which all members are Non-Key Employees, if the resulting
aggregation group continues to meet the requirements of
Section 401(a)(4) and 410 of the Code.
(xii) Required Aggregation Group includes:
(A) Each Defined Benefit Plan and Defined
Contribution Plan of the Employer or an Affiliated
Employer, regardless of whether the Plan terminated
within the past five years, in which a Key Employee is a
Member; and
(B) Each other Defined Benefit Plan and
Defined Contribution Plan of the Employer or an
Affiliated Employer which enables any plan described in
Section 14.01(b)(xii)(A), to meet the requirements of
Section 401(a)(4) or 410 of the Code.
(xiii) Top Ten Owner means the ten Employees
who:
(A) Directly or constructively (as defined
in Section 318 of the Code), own both more than 1/2%
ownership interest in value of the Employer and all
Affiliated Employers, and the largest percentage
ownership interest in value of the Employer and all
Affiliated Employers; and
(B) During the applicable year, have
Statutory Compensation from the Employer or an Affiliated
Employer greater than 100% of the amount in effect under
Section 415(c)(1)(A) of the Code.
14.02 Employer Contributions
The following provisions shall be applicable to Members for any
Plan Year with respect to which the Plan is top-heavy:
(a) If the required minimum contribution is not provided by
the Plan for any Member who is a Non-Key Employee, then in
each Plan Year, in addition to the contributions otherwise
provided under the Plan, the Employer shall make contributions
on behalf of any such Member, or each Employee eligible to
become a Member, who is a Non-Key Employee and who has not
separated from service as of the last day of the Plan Year
(regardless of (i) whether the Non-Key Employee has less than
1,000 Hours of Service, (ii) whether his Compensation is below
any stated level, (iii) whether he declines to make a
mandatory contribution, or (iv) whether he elects to make tax-deferred
contributions) which, when added to the Employer
contributions (as determined without reference to Deferred
Cash Contributions and Employer Matching Contributions)
otherwise allocated on his behalf for the Plan Year will be
equal to a percentage of the Member's Compensation for the
Plan Year, that percentage to be the lesser of 3% or the
percentage rate, determined for the Key Employee for whom that
percentage is the highest, equivalent to the fraction the
numerator of which is the contribution made on behalf of that
Key Employee by the Employer (including Employer Matching
Contributions) and the Member's Deferred Cash Contributions
and the denominator of which is the Compensation of the Key
Employee for that Plan Year.
(b) For purposes of Section 14.02, all Defined Contribution
Plans required to be included in a Required Aggregation Group
shall be treated as one plan. Section 14.02 shall not apply
if the Plan is required to be included in a Required
Aggregation Group under Section 14.01 and if the Plan enables
a Defined Benefit Plan required to be included in such group
to meet the requirements of Section 401(a)(4) or 410 of the
Code.
(c) Notwithstanding the foregoing provisions, no minimum
contribution shall be made with respect to a Member, or an
Employee eligible to become a Member, if the required minimum
benefit under Section 416(c)(1) of the Code is provided under
an Employer sponsored Defined Benefit Plan. In the case of
Employees covered under both the Plan and any Defined Benefit
Plan maintained by the Employer, the Defined Benefit Plan
shall provide the top heavy minimum benefit which shall be
offset by any Employer contributions, other than Deferred Cash
Contributions and Employer Matching Contributions, provided
under the Plan.
IN WITNESS WHEREOF, Zurn Industries, Inc. has caused this Plan to
be executed by its duly authorized officer on this _______ day of
__________________, 1998.
EXHIBIT 4(g)
ELJER TAX REDUCTION INVESTMENT PLAN
<PAGE>
TABLE OF CONTENTS
Page No.
ARTICLE I - INTRODUCTION
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II - DEFINITIONS
2.1 Account. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Administrator. . . . . .2
2.3 Affiliated Company . . . . . . . . . . . . . . . . . . . . 2
2.4 Allocation Date. . . . . . . . . . . . . . . . . . . . . . 3
2.5 Alternate Payee. . . . . . . . . . . . . . . . . . . . . . 3
2.6 Annuity Starting Date. . . . . . . . . . . . . . . . . . . 3
2.7 Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . 3
2.8 Board of Directors . . . . . . . . . . . . . . . . . . . . 4
2.9 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.10 Committee. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.11 Company. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.12 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 Compensation . . . . . . . . . . . . . . . . . . . . . . . 4
2.13A Credited Service. . . . . . . . . . . . . . . . . . . . . 6
2.14 Disability or Disabled . . . . . . . . . . . . . . . . . . 6
2.15 Effective Date . . . . . . . . . . . . . . . . . . . . . . 6
2.16 Employee . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.17 Employer . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.18 Entry Date . . . . . . . . . . . . . . . . . . . . . . . . 6
2.19 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.20 Family Member. . . . . . . . . . . . . . . . . . . . . . . 7
2.21 Former Participant . . . . . . . . . . . . . . . . . . . . 7
2.22 Highly Compensated Employee. . . . . . . . . . . . . . . . 7
2.23 Highly Compensated Participant . . . . . . . . . . . . . . 9
2.24 Hour of Service. . . . . . . . . . . . . . . . . . . . . . 9
2.25 Investment Fund or Fund. . . . . . . . . . . . . . . . . . 9
2.26 Investment Plan Contributions. . . . . . . . . . . . . . . 9
2.27 Investment Plan Contribution Account . . . . . . . . . . . 9
2.28 Interactive Telephone Communication. . . . . . . . . . . .10
2.29 Key Employee . . . . . . . . . . . . . . . . . . . . . . .10
2.30 Leased Employee. . . . . . . . . . . . . . . . . . . . . .11
2.31 Limitation Year. . . . . . . . . . . . . . . . . . . . . .11
2.32 Matching Company Contributions . . . . . . . . . . . . . .11
2.33 Matching Company Contribution Account. . . . . . . . . . .11
2.34 Named Fiduciary. . . . . . . . . . . . . . . . . . . . . .11
2.35 Non-Highly Compensated Employee. . . . . . . . . . . . . .11
2.36 Non-Highly Compensated Participant . . . . . . . . . . . .11
2.37 Non-Key Employee . . . . . . . . . . . . . . . . . . . . .11
2.38 Normal Retirement Date . . . . . . . . . . . . . . . . . .11
2.39 Notice . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.40 Participant. . . . . . . . . . . . . . . . . . . . . . . .12
2.41 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.42 Plan Year. . . . . . . . . . . . . . . . . . . . . . . . .12
2.43 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . .12
2.44 Qualified Domestic Relations Order . . . . . . . . . . . .12
2.45 Quarterly Valuation Date . . . . . . . . . . . . . . . . .12
2.46 Recordkeeper . . . . . . . . . . . . . . . . . . . . . . .12
2.47 Rollover Account . . . . . . . . . . . . . . . . . . . . .12
2.48 Rollover Contribution. . . . . . . . . . . . . . . . . . .12
2.49 Tax Reduction Contributions. . . . . . . . . . . . . . . .13
2.50 Tax Reduction Contribution Account . . . . . . . . . . . .13
2.50A TRIP+ Contributions . . . . . . . . . . . . . . . . . . .13
2.50B TRIP+ Contribution Account. . . . . . . . . . . . . . . .13
2.51 Trust. . . . . . . . . . . . . . . . . . . . . . . . . . .13
2.52 Trust Agreement. . . . . . . . . . . . . . . . . . . . . .13
2.53 Trust Fund . . . . . . . . . . . . . . . . . . . . . . . .13
2.54 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .14
2.55 USI Merger Transaction . . . . . . . . . . . . . . . . . .14
2.56 U.S. Industries. . . . . . . . . . . . . . . . . . . . . .14
2.57 U.S. Industries Stock. . . . . . . . . . . . . . . . . . .14
2.58 U.S. Industries Stock Fund . . . . . . . . . . . . . . . .14
2.59 Valuation Date . . . . . . . . . . . . . . . . . . . . . .14
2.60 Year of Service. . . . . . . . . . . . . . . . . . . . . .14
2.61 Zurn . . . . . . . . . . . . . . . . . . . . . . . . . . .14
2.62 Zurn Stock . . . . . . . . . . . . . . . . . . . . . . . .14
2.63 Zurn Stock Fund. . . . . . . . . . . . . . . . . . . . . .14
ARTICLE III - PARTICIPATION AND YEARS OF SERVICE
3.1 Eligibility to Participate.. . . . . . . . . . . . . . . .15
3.2 Commencement of Participation. . . . . . . . . . . . . . .15
3.3 Waiver of Participation. . . . . . . . . . . . . . . . . .16
3.4 Transfers from Eligible Employment . . . . . . . . . . . .16
3.5 Hour of Service. . . . . . . . . . . . . . . . . . . . . .16
3.6 Year of Service. . . . . . . . . . . . . . . . . . . . . .17
3.7 Participation and Service Upon Reemployment. . . . . . . .18
3.8 Predecessor Service. . . . . . . . . . . . . . . . . . . .18
3.9 Credited Service . . . . . . . . . . . . . . . . . . . . .18
ARTICLE IV - CONTRIBUTIONS
4.1 Tax Reduction Contributions. . . . . . . . . . . . . . . .19
4.2 Investment Plan Contributions. . . . . . . . . . . . . . .21
4.3 Matching Company Contributions . . . . . . . . . . . . . .22
4.3A TRIP+ Contributions. . . . . . . . . . . . . . . . . . . .23
4.4 Employer Qualified Non-Elective Contributions . . . . . .23
4.5 Time of Contributions. . . . . . . . . . . . . . . . . . .24
4.6 Maximum Combined Tax Reduction and Investment Plan
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . .24
4.7 Manner of Making Contributions . . . . . . . . . . . . . .24
4.8 Reduction of Employer Contributions. . . . . . . . . . . .25
4.9 Rollover Contributions . . . . . . . . . . . . . . . . . .25
4.10 Transfers from Other Plans.. . . . . . . . . . . . . . . .25
ARTICLE V - LIMITATIONS AND RESTRICTIONS ON
TAX REDUCTION CONTRIBUTIONS
5.1 Dollar Limitation. . . . . . . . . . . . . . . . . . . . .26
5.2 Actual Deferral Percentage Tests . . . . . . . . . . . . .28
5.3 Adjustments Required to Satisfy an Actual Deferral
Percentage Test . . . . . . . . . . . . . . . . . . . . .30
5.4 Election of Applicable Correction
Methods By Highly Compensated Employees. . . . . . . . . .32
5.5 Additional Adjustments of Tax
Reduction Contributions 32
5.6 Other Permissible Methods
of Testing and Correction . . . . . . . . . . . . . . . . . . .32
ARTICLE VI - LIMITATIONS AND RESTRICTIONS ON INVESTMENT
PLAN CONTRIBUTIONS AND MATCHING COMPANY
CONTRIBUTIONS
6.1 Contribution Percentage Tests. . . . . . . . . . . . . . .33
6.2 Adjustments Required to Satisfy a Contribution
Percentage Test . . . . . . . . . . . . . . . . . . . . . . . . . .35
6.3 Procedures Applicable to Tax
Reduction Contributions Recharacterized As Investment Plan
Contributions . . . . . . . . . . . . . . . . . . . . . . . . .37
6.4 Additional Adjustments and Prospective Reductions of
Investment Plan Contributions. . . . . . . . . . . . . . .37
6.5 Testing of Tax Reduction Contributions
Under Contribution Percentage Test . . . . . . . . . . . .38
6.6 Other Permissible Methods of
Testing and Corrections 38
ARTICLE VII - AGGREGATE LIMIT ON ACTUAL DEFERRAL
AND CONTRIBUTION PERCENTAGES
7.1 General Rules. . . . . . . . . . . . . . . . . . . . . . .39
7.2 Multiple Use Limitation. . . . . . . . . . . . . . . . . .39
7.3 Prospective Reduction of Contributions . . . . . . . . . .40
ARTICLE VIII - LIMITATION ON ALLOCATIONS
8.1 Limitation on Allocations. . . . . . . . . . . . . . . . .40
8.2 Definitions. . . . . . . . . . . . . . . . . . . . . . . .41
8.3 Excess Annual Additions. . . . . . . . . . . . . . . . . .43
8.4 Combined Plan Limits . . . . . . . . . . . . . . . . . . .44
8.5 Special Rules. . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE IX - PARTICIPANTS ACCOUNTS
9.1 Establishment of Accounts. . . . . . . . . . . . . . . . .47
9.2 Allocation of Contributions to Participant's
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . .47
9.3 Trust Fund Valuation . . . . . . . . . . . . . . . . . . .48
9.4 Adjustments to Participant's Accounts. . . . . . . . . . .49
9.5 Participant-Directed Investments . . . . . . . . . . . . .49
9.6 Investment of Matching Company Contributions and
TRIP+ Contributions. . . . . . . . . . . . . . . . . . .53
9.7 Diversification Election . . . . . . . . . . . . . . . . .53
9.8 Qualified Domestic Relations Orders. . . . . . . . . . . .53
9.9 Special Restrictions on Transfer and Withdrawal of
Amounts Invested in Zurn Stock Fund or U.S.
Industries Stock Fund . . . . . . . . . . . . . . . . . . . . .54
ARTICLE X - PARTICIPANT VESTING
10.1 Vesting of Accounts. . . . . . . . . . . . . . . . . . . .55
10.2 Termination of Service Prior to Normal Retirement Date,
Disability or Death . . . . . . . . . . . . . . . . . .55
10.3 Forfeiture of Non-Vested Portion of Account. . . . . . . .56
10.4 Restoration of Non-Vested Interest . . . . . . . . . . . .56
ARTICLE XI - PAYMENT OF BENEFITS
11.1 Withdrawals During Employment. . . . . . . . . . . . . . .56
11.2 Amounts Payable Following Termination of Service . . . . .60
11.3 Time of Payment. . . . . . . . . . . . . . . . . . . . . .60
11.4 Method of Payments . . . . . . . . . . . . . . . . . . . .62
11.5 Minority or Legal Disability of Distributee. . . . . . . .64
11.6 Additional Requirements Relating to Benefit
Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . .65
11.7 Claims Procedure . . . . . . . . . . . . . . . . . . . . .65
11.8 Committee's Duty to Trustee. . . . . . . . . . . . . . . .66
11.9 Duty to Keep Committee Informed of Distributee's
Current Address . . . . . . . . . . . . . . . . . . . . . . . .66
11.10 . Distribution Pursuant to Qualified Domestic
Relations Orders. . . . . . . . . . . . . . . . . . . . . . . .67
11.11. Tax Withholding and Participant's Direct Rollover
Election. . . . . . . . . . . . . . . . . . . . . . . . . . . .67
11.12 Application of Forfeitures . . . . . . . . . . . . . . . .68
11.13 Restrictions on Distributions. . . . . . . . . . . . . . .68
ARTICLE XII - NOTICES
12.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . .68
12.2 Modification of Notice . . . . . . . . . . . . . . . . . .69
12.3 Reliance on Notice . . . . . . . . . . . . . . . . . . . .69
ARTICLE XIII - LOANS
13.1 General Provisions Regarding Loans . . . . . . . . . . . .69
13.2 Amount and Limitations Applicable to Loans . . . . . . . .69
13.3 Security for Loans . . . . . . . . . . . . . . . . . . . .70
13.4 Interest Rate for Loans. . . . . . . . . . . . . . . . . .70
13.5 Repayment of Loans . . . . . . . . . . . . . . . . . . . .70
13.6 Default on Loans . . . . . . . . . . . . . . . . . . . . .71
13.7 Acceleration of Loans Upon
Termination of Employment . . . . . . . . . . . . . . . . . . .71
13.8 Manner of Making Loans . . . . . . . . . . . . . . . . . .71
13.9 Additional Loan Procedures . . . . . . . . . . . . . . . .72
ARTICLE XIV - ADMINISTRATION OF THE PLAN
14.1 Allocation of Responsibilities Among Fiduciaries . . . . .72
14.2 Management of Plan Assets. . . . . . . . . . . . . . . . .73
14.3 Powers and Responsibilities of the Committee . . . . . . .73
14.4 Operation of Committee . . . . . . . . . . . . . . . . . .75
14.5 Compensation and Expenses of Employees and Directors
Serving as Fiduciaries . . . . . . . . . . . . . . . . . .75
14.6 Indemnification of Employees and Directors . . . . . . . .75
14.7 Action Taken in Good Faith . . . . . . . . . . . . . . . .75
14.8 Expenses of the Plan . . . . . . . . . . . . . . . . . . .76
ARTICLE XV - TRUST FUND
15.1 Establishment of Trust Fund. . . . . . . . . . . . . . . .76
15.2 Investments in Employer Stock. . . . . . . . . . . . . . .76
15.3 Title of Trust Assets. . . . . . . . . . . . . . . . . . .76
ARTICLE XVI - AMENDMENT AND TERMINATION
16.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . .76
16.2 Termination or Discontinuance of Contributions . . . . . .77
16.3 Distribution on Plan Termination . . . . . . . . . . . . .77
16.4 Distributions upon Certain Sales . . . . . . . . . . . . .78
16.5 Merger or Consolidation of Plan. . . . . . . . . . . . . .78
16.6 Merger and Other Reorganization of Employer . . . . . . .78
ARTICLE XVII - MISCELLANEOUS
17.1 No Employment or Compensation Agreement. . . . . . . . . .78
17.2 Spendthrift Provision. . . . . . . . . . . . . . . . . . .79
17.3 Construction . . . . . . . . . . . . . . . . . . . . . . .79
17.4 Titles . . . . . . . . . . . . . . . . . . . . . . . . . .79
17.5 Texas Law Applicable . . . . . . . . . . . . . . . . . . .79
17.6 Successors and Assigns . . . . . . . . . . . . . . . . . .79
17.7 Payments Only from Trust Fund. . . . . . . . . . . . . . .79
17.8 Plan Controls. . . . . . . . . . . . . . . . . . . . . . .79
17.9 Effect of Mistakes . . . . . . . . . . . . . . . . . . . .79
17.10 IRC 414(u) Compliance Provision. . . . . . . . . . . . . .79
ARTICLE XVIII - TOP HEAVY PROVISIONS
18.1 Application and Purpose. . . . . . . . . . . . . . . . . .80
18.2 Minimum Allocation Requirements. . . . . . . . . . . . . .80
18.3 Adjustment to Limitation on Allocations. . . . . . . . . .80
18.4 Vesting Schedule . . . . . . . . . . . . . . . . . . . . .80
18.5 Definitions. . . . . . . . . . . . . . . . . . . . . . . .81
<PAGE>
ELJER TAX REDUCTION INVESTMENT PLAN
WHEREAS, effective April 1, 1989, in connection with a
transaction in which Eljer Manufacturing, Inc. ceased to be a
subsidiary of Household International, Inc., Eljer Manufacturing,
Inc. established the Eljer Tax Reduction Investment Plan
(hereinafter referred to as the "Plan") as a savings and profit-sharing
plan designed to constitute a "qualified plan" within the
meaning of Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"); and
WHEREAS, the Plan was thereafter amended from time to time
and was most recently restated in its entirety in 1997 to
incorporate changes reflecting the acquisition of Eljer
Manufacturing, Inc. by Zurn Industries, Inc. (hereinafter
referred to as "Zurn") and established Zurn as sponsor of the
Plan and the entity responsible for the administration and
amendment of the Plan; and
WHEREAS, Zurn now desires to amend and restate the Plan in
its entirety to make certain changes to Plan provisions to
reflect the merger of Zurn and U.S. Industries, Inc., effective
as set forth herein;
NOW, THEREFORE, the Plan is hereby amended and restated, effective as
provided herein, as follows:
<PAGE>
ARTICLE I
INTRODUCTION
1.1 Introduction.
Zurn hereby completely amends and restates the Eljer Tax
Reduction Investment Plan (the "Plan"). The assets of the Plan
are held, administered and managed in accordance with the terms
and conditions of the Trust Agreement which is an integral part
of the Plan. Zurn intends that the Plan continue to be a plan
qualified under Section 401(a) of the Code (as hereinafter
defined) with a cash or deferred arrangement qualified under
Section 401(k) of the Code and a trust exempt from taxation under
Section 501(a) of the Code. Pursuant to the requirements of
Section 401(a)(27)(B) of the Code, Zurn also intends that the
Plan be a profit sharing plan.
The Plan may be amended further from time to time. Except as
otherwise provided in the Plan or any amendment to the Plan, the
provisions of an amendment shall apply solely to an Employee,
former Employee, Participant or Former Participant whose
employment with an Employer is terminated on or after the
effective date of the amendment. The rights of an Employee,
former Employee, Participant or Former Participant whose
employment with an Employer is terminated prior to the effective
date of an amendment shall be determined solely by the provisions
of the Plan as in effect on the date of his termination of
employment.
The benefits payable from this Plan are independent of any
benefits the Employee is or may become entitled to under any
other funded pension, profit sharing or savings plan.
ARTICLE II
DEFINITIONS
The following words and phrases when used in this Plan shall
have the respective meanings set forth below unless the context
clearly indicates otherwise:
2.1 Account means the account or record maintained by the
Trustee or the Recordkeeper reflecting the monetary value of the
undivided interest in the Trust Fund of each Participant, each
Former Participant and each Beneficiary and shall include the Tax
Reduction Contribution Account, Investment Plan Contribution
Account, Matching Company Contribution Account, Rollover Account,
TRIP+ Contribution Account and such additional Accounts as the
Company may establish from time to time, including subaccounts
and segregated accounts.
2.2 Administrator means, with respect to the administration
of the Plan as herein described, the Committee. However, with
respect to periods on and after June 30, 1997, for purposes of
applying the applicable provisions of ERISA to the Plan, Zurn
shall be the "administrator" as described in Section 3(16)(A) of
ERISA.
2.3 Affiliated Company means the Company and any other
entity which is, along with the Company, a member of a controlled
group of corporations or a controlled group of trades or
businesses [as defined in Section 414(b) or (c) of the Code], any
entity which along with the Company is included in an affiliated
service group as defined in Section 414(m) of the Code, and any
other entity which is required to be aggregated with the Company
pursuant to Section 414(o) of the Code.
2.4 Allocation Date means the last day of each month;
provided, however, that the Allocation Date for Matching Company
Contributions and TRIP+ Contributions shall be the last day of
each calendar quarter, as provided in Sections 9.2(c) and 9.2(e).
2.5 Alternate Payee means a person defined in Code Section
414(p)(8) who is entitled to benefits under the Plan pursuant to
a Qualified Domestic Relations Order.
2.6 Annuity Starting Date means (i) the first day of the
first period with respect to which an amount is payable as an
annuity, or (ii) in the case of a benefit not payable in the form
of an annuity, the first day on which all events have occurred
that entitle the Participant, Former Participant or Beneficiary
to such benefit in accordance with Article XI.
2.7 Beneficiary means any person or fiduciary designated by
a Participant or Former Participant in accordance with the terms
hereof and Section 401(a)(9) of the Code to receive benefits
hereunder following the death of such Participant or Former
Participant. Each Participant and Former Participant may, from
time to time, select one or more Beneficiaries to receive
benefits in the event of the death of such Participant or Former
Participant. Such selection shall be made in writing by Notice to
the Committee. Unless the provisions of this Plan or a Qualified
Domestic Relations Order provide otherwise, the last such
selection filed with the Committee prior to the death of the
Participant or Former Participant shall determine to whom Plan
benefits shall be paid.
If the Participant or Former Participant is married at the
date of his death, the Beneficiary shall be his surviving spouse
unless the spouse has consented in writing to the designation of
some other Beneficiary, which designation may not be changed
without consent of the spouse unless the voluntary consent of the
spouse (i) expressly permits designations by the Participant or
Former Participant without any requirement of further consent by
the spouse and (ii) acknowledges that the spouse has the right to
limit the consent to a specific Beneficiary. Such written consent
must acknowledge the effect of the Participant's or Former
Participant's Beneficiary selection and must be witnessed by a
Plan representative or a notary public. Spousal consent is not
required if it is established to the satisfaction of the
Committee that the consent may not be obtained (i) because the
Participant has no spouse, (ii) because the spouse cannot be
located or (iii) because of such other circumstances as the
Secretary of Treasury may by regulations prescribe.
If the Committee cannot determine readily whether a
Participant has a spouse under the laws of the state in which the
Participant resides resulting from an individual's claim to be a
"common law" spouse of a Participant or similar circumstances,
the Committee may request such individual to provide the
Committee with a legal opinion satisfactory to the Committee or
other evidence demonstrating the individual's status as a spouse
of a Participant. The Committee has the sole and absolute
authority to determine an individual's status as a spouse of a
Participant and any such determination shall be final, binding
and conclusive on all parties ever claiming an interest in the
Plan. Any consent by a spouse (or establishment that the consent
of the spouse may not be obtained) shall be effective only with
respect to that spouse. If a Participant s or Former
Participant's Beneficiary selection is not made in compliance
with these provisions or if all designated persons shall
predecease the Participant or Former Participant, Beneficiary
shall mean the first of the following classes of successive
preference beneficiaries then surviving, the Participant s or
Former Participant's: (a) spouse, (b) descendants, per stirpes
(including adopted children), (c) parents, (d) brothers and
sisters and (e) executors or administrators.
If more than one Beneficiary of a particular class (primary
or secondary) is entitled to benefits, payments shall be made in
equal shares to such Beneficiaries, unless some other specific
proportions are clearly designated by the Participant or Former
Participant. If more than one Beneficiary of a particular class
(primary or secondary) is named, the interest of any deceased
Beneficiary of that class shall pass to the surviving Beneficiary
or Beneficiaries of that class except to the extent that the
designation provides for payment to any secondary Beneficiary or
Beneficiaries upon the death of a primary Beneficiary. In
determining whether any person named as a Beneficiary is living
at the time of a Participant's or Former Participant's death, if
such person and the Participant or Former Participant die in a
common disaster and there is insufficient evidence to determine
which person died first, then it shall be deemed that the
Beneficiary died first.
2.8 Board of Directors means, effective on and after June
30, 1997, the Board of Directors of Zurn Industries, Inc., or any
committee of such Board of Directors authorized to act on its
behalf.
2.9 Code means the Internal Revenue Code of 1986, as it may
be amended from time to time. Reference to a section of the Code
shall include that section, applicable Treasury regulations
promulgated thereunder and any comparable section of any future
legislation that amends, supplements or supersedes said section.
2.10 Committee means, effective on and after June 30, 1997,
the Zurn Pension Committee as from time to time constituted or
such other committee appointed by the Board of Directors.
2.11 Company means Eljer Manufacturing, Inc., or any
successor thereto.
2.12 [Reserved]
2.13 Compensation means, unless defined otherwise herein:
(a) for purposes of making contributions and allocations
hereunder, the sum of (i) compensation for services performed by
an Employee for an Employer that is required to be reported as
wages on the Employee's Form W-2 (or its equivalent) for Federal
income tax purposes and compensation received in the form of
salary continuation payments by an Employee compensated on a
salaried basis under an Employer s short-term disability program,
and (ii) amounts contributed by the Employer pursuant to a salary
reduction agreement that are not includible in gross income of
the Employee under Sections 125, 402(a)(8), 402(h) or 403(b) of
the Code, but less per diem allowances, expense allowances,
moving expense allowances and excess group term life insurance
premium costs includible by the Employee as "PS-58 costs" and
severance, disability (other than short-term disability payments
described in clause (i) of this Section 2.13(a)) and other
welfare benefits; provided, however, that Compensation shall
include only amounts actually paid an Employee during the period
he is a Participant;
(b) for purposes of the Actual Deferral Percentage tests
under Section 5.2 and the Contribution Percentage tests under
Section 6.1, amounts paid to an Employee for the Plan Year that
are required to be reported by the Employer pursuant to Sections
6041(d) and 6051(a)(3) of the Code, plus Tax Reduction
Contributions and other amounts representing elective
contributions by the Employer on behalf of the Employee that are
excluded from an Employee's gross income by reason of Sections
125, 402(e)(3), 402(h)(1)(B) and/or 403(b) of the Code; provided,
however, that the Committee, in its sole and absolute discretion,
may limit Compensation under this Section 2.13(b) taken into
account for a Plan Year to only that Compensation received with
respect to the portion of the Plan Year during which an Employee
is eligible to participate in the Plan under Article III,
provided such limitation is applied uniformly to all eligible
Employees under the Plan for such Plan Year; and
(c) for other purposes of the Plan, including determining
the limits on Annual Additions imposed by Section 415 of the Code
as set forth in Article VIII, the special top-heavy rules of
Article XVIII and determining the identity of Highly Compensated
Employees, amounts paid to an Employee for the Plan Year (or
Limitation Year for purposes of Article VIII) that are required
to be reported pursuant to Sections 6041(d) and 6051(a)(3) of the
Code plus Tax Reduction Contributions and other amounts
representing elective contributions by the Employer on behalf of
the Employee that are excluded from an Employee s gross income by
reason of Sections 125, 402(e)(3), 402(h)(1)(B) and/or 403(b) of
the Code, provided such additions shall be made, for purposes of
Article VIII, only with respect to Limitations Years beginning on
and after January 1, 1998.
For (i) each Plan Year beginning before January 1, 1994,
only the first $200,000 of an individual's Compensation-on shall
be taken into account for purposes of the Plan [or such other
amount as the Secretary of the Treasury may prescribe at the same
time and in the same manner as provided under Section 415(d) of
the Code for adjusting the dollar limitation in effect under
Section 415(b)(1)(A) of the Code] and (ii) each Plan Year
beginning after December 31, 1993, only the first $150,000 of an
individual s Compensation shall be taken into account for
purposes of the Plan [or, beginning January 1, 1995, such larger
amount as may be determined under Section 401(a)(17)(B) of the
Code]. Each limitation on Compensation described in the preceding
sentence shall be referred to herein as the "Compensation
Limitation." For Plan Years beginning before January 1, 1997, in
determining the Compensation of each Participant who is (i) a
more than five percent owner of an Employer or (ii) a Highly
Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest Compensation during the
Plan Year (without regard to this sentence), for purposes of
applying the Compensation Limitation (as it may be adjusted), the
spouse of each such Participant and each of his lineal
descendants who have not attained age l9 before the close of the
Plan Year shall not be treated as a separate Employee for that
Plan Year and the Compensation of each such family member shall
be aggregated with the Compensation of the Participant as if it
were paid to the Participant. If, as a result of the application
of the preceding sentence, the Compensation Limitation (as it may
be adjusted) is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Compensation as determined under this Section 2.13
prior to the application of this limitation.
2.13A Credited Service has the meaning set forth in
Section 3.9.
2.14 Disability or Disabled means the physical or mental
incapacity of a Participant that, in the opinion of the
Committee, based on medical evidence satisfactory to the
Committee, renders him unfit to perform any employment for the
Employer
2.15 Effective Date of this Plan, as amended and restated,
shall generally be June 11, 1998 provided, however, that as
necessary to comply with the effective dates of the applicable
provisions of recent legislation, certain provisions of the Plan
shall be effective as of the dates such provisions are required
to be effective with respect to the Plan under the Code or, if
later, under administrative pronouncements issued by the Internal
Revenue Service or the Treasury Department. Notwithstanding the
general effective date set forth above, certain provisions of the
Plan shall be effective as of the dates set forth herein.
2.16 Employee means, for Plan Years beginning on and after
January 1, 1991, any person employed by the Employer who is
included on the Federal Insurance Contributions Act rolls of the
Employer; provided, however, the term Employee shall not include
(i) any individual employed on an hourly basis at the Company s
Nampa, Idaho plant and individuals employed at the Fiberglass
Products Division at Wilson, North Carolina or at the GlasTec
Division of the Company and (ii) any employees of an Affiliated
Company who are included in a unit of employees covered by a
collective bargaining agreement. The term Employee includes a
Leased Employee that Section 414(n) of the Code requires the
Employer to treat as an employee, but such Leased Employee shall
not be eligible to participate in the Plan.
2.17 Employer means the Company and any other Affiliated
Company, with respect to its Employees, provided such Affiliated
Company is designated by the Committee as an Employer under the
Plan and whose designation as such has become effective and has
continued in effect. The designation shall become effective only
when it shall have been accepted by the governing body of the
Employer. An Employer may revoke its acceptance of such
designation at any time, but until such acceptance has been
revoked, all of the provisions of the Plan and amendments thereto
shall apply to the Employees of the Employer. In the event the
designation of the Employer as such is revoked by the governing
body of the Employer, such revocation will not be deemed a
termination of the Plan. The Committee shall have the exclusive
right to determine whether any Affiliated Company shall become an
Employer for purposes of the Plan.
2.18 Entry Date means the first day of each January, April,
July and October.
2.19 ERISA means the Employee Retirement Income Security Act
of 1974, as it may be amended from time to time, and applicable
regulations promulgated thereunder.
2.20 Family Member means with respect to any Employee, such
Employee's spouse and lineal ascendants or descendants and the
spouses of such lineal ascendants or descendants.
2.21 Former Participant means any individual who has been a
Participant in the Plan, who is no longer in the employ of an
Affiliated Company and who has not yet received the entire
benefit to which he is entitled under the Plan.
2.22 Highly Compensated Employee means, for each Plan Year
beginning before January 1, 1997, any Employee who is determined
to be included in subsection (a) after applying the special rules
in subsection (b):
(a) any Employee who, during the Plan Year for which the
determination is being made or the immediately preceding Plan
Year:
(i) was, at any time, a more than five percent owner
of any Employer;
(ii) received Compensation from all Employers in excess
of $75,000;
(iii) received Compensation from all Employers in
excess of $50, 000 and was in the top 20% of Employees
for the Plan Year (when ranked on the basis of
Compensation for such Plan Year); or,
(iv) was at any time an officer of any Employer and
received Compensation greater than 50% of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code for the Plan Year.
(b) For purposes of determining the Employees who are to be
included in subsection (a) above, the following special rules
shall apply to this Section 2.22:
(i) Any Employee not described in subsection (a)(ii),
(iii) or (iv) of this Section 2.22 for the Plan Year
immediately preceding the Plan Year of determination
shall not be treated as described in subsection
(a)(ii), (iii) or (iv) of this Section 2.22 for the
Plan Year of determination unless, in addition to
meeting the requirements of subsection (a)(ii), (iii)
or (iv) for the Plan Year of determination, such
Employee is a member of the group consisting of the one
hundred Employees paid the highest Compensation during
that Plan Year.
(ii) In determining the top 20% of Employees pursuant
to subsection (a)(iii), Employees who (A) have not
completed at least six months of service, (B) normally
work fewer than 17-1/2 hours per week, (C) normally
work during not more than six months during any Plan
Year, (D) have not attained age 21 or (E) are covered
under a collective bargaining agreement (except to the
extent provided in applicable Treasury regulations)
shall be excluded from such determination.
(iii) In determining officers under subsection
(a)(iv), no more than fifty (50) Employees (or, if
less, the greater of three Employees or ten percent of
the Employees) shall be treated as officers, and if in
such Plan Year no officer is described in subsection
(a)(iv), the highest paid officer of any Employer
during such Plan Year shall be treated as an officer
for purposes of subsection (a)(iv).
(iv) If any Employee is a Family Member of an Employee
who is a more than five percent owner of any Employer
or a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid
the greatest Compensation during the Plan Year [without
regard to this subsection (b)(iv)], then (A) such
Family Member shall not be considered a separate
Employee and (B) any Compensation paid to such Family
Member (and any applicable contribution or benefit on
behalf of such Employee) shall be treated as if it were
paid to (or on behalf of) the Employee who is the five
percent owner or one of the ten Highly Compensated
Employees paid the greatest Compensation during the
Plan Year.
(v) A former Employee whose employment terminates
prior to the Plan Year of determination shall be
treated as a Highly Compensated Employee for the Plan
Year of determination if such Employee was a Highly
Compensated Employee upon termination of employment
with an Employer, or such Employee was a Highly
Compensated Employee at any time after attaining age
55.
(vi) "Compensation" for purposes of determining who is
a Highly Compensated Employee shall have the meaning
set forth in Section 2.13(c), but prior to any
reduction on account of a Participant's Tax Reduction
Contributions and any other contributions not treated
as taxable income by reasons of Sections 125, 402(a)(8)
or 402(h)(1) (B) of the Code.
(vii) The dollar amounts in subsections (a)(ii) and
(iii) shall be adjusted to such other amount as the
Secretary of the Treasury shall prescribe at the same
time and in the same manner as provided under Section
415(d) of the Code for adjusting the dollar limitation
in effect under Section 415(b)(1)(A) of the Code.
(viii) In determining the number of Employees
pursuant to this Section, any Employee who is a
non-resident alien and who receives no earned income
[within the meaning of Section 911(d)(2) of the Code]
from any Employer which constitutes income from sources
within the United States within the meaning of Section
861(a)(3) of the Code] shall be excluded from such
determination.
(c) Notwithstanding the foregoing provisions of this
Section 2.22, for each Plan Year beginning on and after January
1, 1997, Highly Compensated Employee means any Employee who:
(i) was a five percent owner (as defined in Section
416(i)(l) of the Code) of the Employer at any time
during the Plan Year or the preceding Plan Year; or
(ii) for the preceding Plan Year (A) received
Compensation from the Employer in excess of $80,000,
adjusted to such other amount as the Secretary of the
Treasury shall prescribe at the same time and in the
same manner as provided under Section 415(d) of the
Code (except that the "base period" shall be the
calendar quarter ending September 30, 1996) and (B) was
in the top 20 percent of Employees when ranked on the
basis of Compensation for such Plan Year.
2.23 Highly Compensated Participant means a Highly
Compensated Employee who has met the eligibility requirements in
accordance with Article III.
2.24 Hour of Service means each hour credited to an
individual in accordance with the provisions of Section 3.5.
2.25 Investment Fund or Fund means a fund designated by the
Committee pursuant to Section 9.5 from time to time and
maintained for the purpose of providing a vehicle for the
investment of the Trust Fund, in accordance with the directions
of each Participant, Former Participant or Beneficiary with
respect to his Account as provided hereunder, until such
Investment Fund shall be eliminated by action of the Committee
and shall, effective as set forth below, include the following
funds:
(a) Effective as of June 30, 1997:
(i) Zurn Stock Fund
(ii) Household International, Inc. Common Stock Fund
(Frozen Fund);
(iii) Fixed Income Fund;
(iv) U.S. Stock Fund;
(v) International Stock Fund;
(vi) Managed Growth Funds; and
(vii) Managed Balanced Fund.
(b) Effective as of the consummation of the USI Merger
Transaction:
(i) U.S. Industries Stock Fund
(ii) Household International, Inc. Common Stock Fund
(Frozen Fund);
(iii) Fixed Income Fund;
(iv) U.S. Stock Fund;
(v) International Stock Fund;
(vi) Managed Growth Funds; and
(vii) Managed Balanced Fund.
2.26 Investment Plan Contributions mean contributions paid
by the Participant on an after-tax basis in accordance with
Section 4.2 of the Plan and contributions which were paid on an
after-tax basis pursuant to the terms of the Plan prior to the
amendment and restatement of the Plan as set forth herein.
2.27 Investment Plan Contribution Account means the portion
of the individual Account maintained by the Trustee or the
Recordkeeper for each Participant, each Former Participant and
each Beneficiary, showing the monetary value of the person's
individual interest in the Trust Fund attributable to Investment
Plan Contributions and contributions made on an after-tax basis
to the Prior Plan.
2.28 Interactive Telephone Communication means a
communication between a Participant, Former Participant or
Beneficiary and the Recordkeeper pursuant to a system maintained
by the Recordkeeper and communicated to each Participant, Former
Participant and Beneficiary whereby each such individual may make
elections and exercise options as described herein with respect
to his Account through the use of such system and a personal
identification number. If a Participant, Former Participant or
Beneficiary in writing (i) consents to participate in Interactive
Telephone Communication procedures adopted by the Committee and
(ii) acknowledges that actions taken by such Participant, Former
Participant or Beneficiary through the use of his personal
identification number pursuant to the Interactive Telephone
Communication procedure constitute his signature for purposes of
initiating Investment Fund changes, Participant loans and Plan
withdrawals, the Participant, Former Participant or Beneficiary,
as the case might be, will be deemed to have given his written
consent and authorization to any such action resulting from the
use of the Interactive Telephone Communication system by the
Participant, Former Participant or Beneficiary.
2.29 Key Employee means, as of any Determination Date [as
defined in Section 18.5], any Employee or Former Employee (or
Beneficiary of such Employee) who, at any time during the Plan
Year that includes the Determination Date, or during the
preceding four Plan Years, is:
(a) an officer of any Employer having Compensation greater
than 50% of the amount in effect under Section 415(b)(1)(A) of
the Code for any such Plan Year;
(b) one of the ten Employees having Compensation from any
Employer of more than the dollar limitation in effect under
Section 415(c)(1)(A) of the Code and owning the largest interests
in such Employer;
(c) a more than five percent owner of any Employer; or
(d) a more than one percent owner of any Employer having
Compensation from all Employers of more than $150,000.
For purposes of this Section 2.29, Compensation shall have
the meaning set forth in Section 2.13(c), but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Participant's gross
income under Sections 125, 402(a)(8), 402(h) or 403(b) of the
Code. For purposes of subsection (a) of this Section, no more
than 50 Employees (or, if lesser, the greater of three or ten
percent of the Employees) shall be treated as officers. For
purposes of subsection (b) of this Section, if two Employees have
the same interest in an Employer, the Employee having the greater
Compensation shall be treated as having the larger interest. The
constructive ownership rules of Section 318 of the Code (or the
principles of that section, in the case of an unincorporated
Employer) will apply to determine ownership in each Employer.
2.30 Leased Employee means an individual who is not in the
employ of an Employer and who, pursuant to a leasing agreement
between an Employer and any other person ("leasing organization),
has performed services for an Employer [or for an Employer and
any other person related to an Employer within the meaning of
Section 144(a)(3) of the Code] on a substantially full-time basis
for at least one year and, effective on and after January 1,
1997, such services are performed under primary direction or
control by the recipient. Leased Employee shall also include any
individual who is deemed to be an employee of an Employer under
Section 414(o) of the Code. Notwithstanding the foregoing, if
individuals described in the preceding sentences constitute less
than 20% of an Employer's non-highly compensated work force
within the meaning of Section 414(n)(5)(C)(ii) of the Code, the
Plan shall not treat an individual as a Leased Employee if the
leasing organization covers the individual in a money purchase
pension plan providing immediate participation, full and
immediate vesting and a non-integrated contribution formula equal
to at least ten percent of the individual's annual compensation
[as defined in Section 415(c)(3) of the Code, but including
amounts contributed by an Employer pursuant to a salary reduction
agreement that are excludable from the individual's gross income
under Sections 125, 402(a)(8), 402(h) or 403(b) of the Code]. If
any Leased Employee shall be treated as an Employee of an
Employer, however, contributions or benefits provided by the
leasing organization which are attributable to services of the
Leased Employee performed for an Employer shall be treated as
provided by the Employer.
2.31 Limitation Year means the calendar year.
2.32 Matching Company Contributions mean contributions paid
to the Plan on behalf of a Participant in accordance with Section
4.5 based on the Participant's Tax Reduction Contributions and
Investment Plan Contributions made pursuant to Sections 4.1 and
4.2 of the Plan.
2.33 Matching Company Contribution Account means the portion
of the individual Account maintained by the Trustee or
Recordkeeper for each Participant, each Former Participant and
each Beneficiary, showing the monetary value of that person's
individual interest in the Trust Fund attributable to Matching
Company Contributions and employer matching contributions made to
the Prior Plan.
2.34 Named Fiduciary means the Committee.
2.35 Non-Highly Compensated Employee means any Employee who
is neither a Highly Compensated Employee nor a Family Member who
is not treated as a separate Employee under Section 2.22(b)(iv).
2.36 Non-Highly Compensated Participant means a Participant
who is not a Highly Compensated Participant.
2.37 Non-Key Employee means any Employee who is not a Key
Employee.
2.38 Normal Retirement Date means a Participant's or Former
Participant's 65th birthday.
2.39 Notice means, unless otherwise provided specifically in
this Plan, (i) written Notice on an appropriate form provided by
the Committee that is properly completed and executed by the
party giving such Notice and which is delivered by hand or by
mail to the Committee or to such other party designated by the
terms of the Plan or by the Committee to receive the Notice or
(ii) Notice by Interactive Telephone Communication to the
Recordkeeper. Notice to the Committee, the Recordkeeper or to any
other person as provided herein shall be deemed to be given when
it is actually received (either physically or by Interactive
Telephone Communication, as the case may be) by the party to whom
such Notice is given.
2.40 Participant means an Employee who has met the
eligibility requirements of the Plan as provided in Article III
hereof and who has begun participating in the Plan.
2.41 Plan means the salary reduction and savings retirement
plan and trust embodied herein, as the same may be amended from
time to time, and shall be known as "Eljer Tax Reduction
Investment Plan"
2.42 Plan Year means the twelve (12) month period commencing
each January 1 and ending the following December 31; provided,
however, that the first Plan Year shall be the short year
commencing April 1, 1989 and ending December 31, 1989.
2.43 Prior Plan means the Household International Tax
Reduction Investment Plan.
2.44 Qualified Domestic Relations Order means any judgment,
decree, or order (including approval of a property settlement
agreement) that (i) relates to the provision of child support,
alimony payments, or marital property rights to a spouse, former
spouse, child or other dependent of a Participant or Former
Participant, (ii) is made pursuant to a state domestic relations
law, (iii) creates or recognizes the existence of an Alternate
Payee s right to, or assigns to an Alternate Payee the right to
receive all or a portion of the benefits payable with respect to
a Participant or Former Participant under the Plan and (iv)
complies with the requirements of Code Section 414(p).
2.45 Quarterly Valuation Date means the last day of each
calendar quarter.
2.46 Recordkeeper means any person or entity appointed by
the Committee to perform recordkeeping and other administrative
services on behalf of the Plan.
2.47 Rollover Account means the portion of the Account
maintained by the Trustee or the Recordkeeper for each Employee,
each Participant, each Former Participant and each Beneficiary,
showing the monetary value of such person's individual interest
in the Trust Fund attributable to his Rollover Contribution and
amounts contributed as a rollover to the Prior Plan.
2.48 Rollover Contribution means, in addition to a
contribution described in the last sentence of this Section 2.48,
any amount transferred to the Plan that would constitute a
rollover contribution within the meaning of Section 402(a)(5),
403(a)(4) or 408(d)(3) of the Code. Any such rollover
contribution must consist of either (i) all or a portion of the
property (in excess of employee contributions) that the Employee
received in a distribution from an employee's trust described in
Section 401(a) of the Code which is exempt from tax under Section
501(a) thereof or an annuity plan described in Section 403(a) of
the Code and any earnings thereon (whether such contribution is
paid directly by the Employee, from such other trust or annuity
plan, or from an individual retirement account or individual
retirement annuity) or (ii) all or a portion of the proceeds from
the sale of property received in such a distribution pursuant to
Section 402(a)(6)(D) of the Code. Commencing January 1, 1993, a
Rollover Contribution shall include an eligible rollover
contribution as described in Code Section 402(c)(4) transferred
to the Plan pursuant to an Employee's election as described in
Code Section 401(a)(31)(A).
2.49 Tax Reduction Contributions mean contributions paid to
the Plan on behalf of a Participant on a before-tax basis in
accordance with Section 4.1 of the Plan and contributions which
were paid on a before-tax basis pursuant to the terms of the Plan
prior to the amendment and restatement of the Plan as set forth
herein.
2.50 Tax Reduction Contribution Account means the portion of
the individual Account maintained by the Trustee or the
Recordkeeper for each Participant, each Former Participant and
each Beneficiary, showing the monetary value of that person's
individual interest in the Trust Fund attributable to Tax
Reduction Contributions, contributions made by an Employer
pursuant to Section 4.4 as "qualified non-elective contributions"
within the meaning of Section 401(m)(4)(C) of the Code and
contributions made on a before-tax basis to the Prior Plan.
2.50A TRIP+ Contributions mean profit sharing
contributions paid to the Plan on behalf of a Participant in
accordance with Section 4.3A of the Plan.
2.50B TRIP+ Contribution Account means the portion of
the individual Account maintained by the Trustee or the
Recordkeeper for each Participant, each Former Participant and
each Beneficiary, showing the monetary value of that person s
individual interest in the Trust Fund attributable to TRIP+
Contribution made by the Employer pursuant to Section 4.3A. Each
TRIP+ Contribution Account shall contain subaccounts to identify
separately the portion thereof attributable to TRIP+
Contributions described in Section 4.3A(a) and the portion
thereof attributable to TRIP+ Contributions described in Section
4.3A(b).
2.51 Trust means the fund maintained by the Trustee for the
investment of Plan assets in accordance with the terms and
conditions of the Trust Agreement.
2.52 Trust Agreement means the agreement between the Company
and the Trustee under which the assets of the Plan are held,
administered and managed by the Trustee. The provisions of the
Trust Agreement shall be considered an integral part of this Plan
as if set forth fully herein.
2.53 Trust Fund means all assets of whatsoever kind and
nature from time to time held by the Trustee pursuant to the
terms of the Trust Agreement without distinction as to income or
principal out of which benefits of the Plan are provided. The
Trust Fund shall be divided into Investment Funds as provided in
Section 9.5.
2.54 Trustee means Bankers Trust Company or any successor
trustee and any additional trustee or trustees.
2.55 USI Merger Transaction means the merger transaction
documented in the February 16, 1998 merger agreement between USI,
Inc., U.S. Industries, Inc., Zurn and others (as the same may be
amended).
2.56 U.S. Industries means U.S. Industries, Inc., a Delaware
corporation (formerly known as USI, Inc.) as said corporation
exists following the consummation of the USI Merger Transaction.
2.57 U.S. Industries Stock means the common stock, $0.01 par
value, of U.S. Industries.
2.58 U.S. Industries Stock Fund means an Investment Fund,
established effective as of the consummation of the USI Merger
Transaction, at which time the Zurn Stock held in the Zurn Stock
Fund shall be converted to U.S. Industries Stock and the Zurn
Stock Fund shall be converted to the U.S. Industries Stock Fund.
The U.S. Industries Stock Fund shall consist exclusively of U.S.
Industries Stock provided that a portion not exceeding 10% of the
fair market value of the Fund may be held in short-term interest-bearing
investments or cash pending purchase of U.S. Industries
Stock and to provide sufficient liquidity for transfers out of
the Fund, withdrawals and loans. Unless otherwise limited under
the terms of the Trust Agreement, the Trustee may purchase or
sell U.S. Industries Stock on the open market or by privately-negotiated
transaction; provided however, that any such purchase
or sale shall be made only in exchange for fair market value as
determined by the Trustee and, provided further that, except for
purchases or sales of U.S. Industries Stock on the New York Stock
Exchange, no commission shall be charged or paid with respect to
any purchase or sale of U.S. Industries Stock by the Trustee.
Any distributions, dividends or other income received by the
Trustee with respect to the U.S. Industries Stock Fund shall be
reinvested by the Trustee in the U.S. Industries Stock Fund. The
Committee shall provide, at such time and in such manner as it
shall determine in its discretion, whether share or unit
accounting be performed with respect to the U.S. Industries Stock
Fund.
2.59 Valuation Date means the close of business on the last
day of each month, or such other date or dates as the Committee
shall establish from time to time.
2.60 Year of Service has the meaning set forth in Section
3.6.
2.61 Zurn means Zurn Industries, Inc., a Pennsylvania
Corporation or any successor thereto.
2.62 Zurn Stock means the common stock, $0.50 par value, of
Zurn Industries, Inc.
2.63 Zurn Stock Fund means an Investment Fund, established
effective as of June 30, 1997 in connection with contributions of
Zurn Stock as provided in Section 4.7 and continued through the
date the USI Merger Transaction is consummated, at which time the
Zurn Stock held in the Zurn Stock Fund shall be converted to U.S.
Industries Stock and the Zurn Stock Fund shall be converted to
the U.S. Industries Stock Fund. Prior to such conversion, the
Zurn Stock Fund shall consist exclusively of Zurn Stock provided
that a portion not exceeding 10% of the fair market value of the
Fund may be held in short-term interest-bearing investments or
cash pending purchase of Zurn Stock and to provide sufficient
liquidity for transfers out of the Fund, withdrawals and loans.
Unless otherwise limited under the terms of the Trust Agreement,
the Trustee may purchase or sell Zurn Stock on the open market or
by privately-negotiated transaction; provided however, that any
such purchase or sale shall be made only in exchange for fair
market value as determined by the Trustee and, provided further
that, except for purchases or sales of Zurn Stock on the New York
Stock Exchange, no commission shall be charged or paid with
respect to any purchase or sale of Zurn Stock by the Trustee.
Any distributions, dividends or other income received by the
Trustee with respect to the Zurn Stock Fund shall be reinvested
by the Trustee in the Zurn Stock Fund. The Committee shall
provide, at such time and in such manner as it shall determine in
its discretion, whether share or unit accounting be performed
with respect to the Zurn Stock Fund. Prior to July 1, 1997 or
such later date as shall be selected by the Committee, in its
discretion, the Zurn Stock Fund is not available for investment
elections by Participants, Former Participants, Beneficiaries or
Alternate Payees.
Except as otherwise indicated by the context, any masculine
terminology used herein also includes the feminine and neuter,
and vice versa, and the definition of any term herein in the
singular shall also include the plural, and vice versa.
ARTICLE III
PARTICIPATION AND YEARS OF SERVICE
3.1 Eligibility to Participate.
(a) Prior Plan Participants. An individual who was eligible
to participate in the Prior Plan on March 31, 1989 and who is an
Employee of an Employer on April l, 1989 shall be eligible to
participate in this Plan as of April l, 1989
(b) Other Employees. Each other Employee who is hired by
the Employer prior to January 1, 1996 shall be eligible to
participate in the Plan on the Entry Date (if he is employed by
the Employer on that date) that coincides with or that next
follows the earlier of (i) the date he completes three Years of
Service; or (ii) the date he attains age 21 and completes one
Year of Service. Each other Employee who is hired by the
Employer on or after January 1, 1996 shall be eligible to
participate in the Plan on the Entry Date (if he is employed by
the Employer on that date) that coincides with or that next
follows the date he attains age 21 and completes one Year of
Service.
3.2 Commencement of Participation. Any Employee who has
satisfied the eligibility requirements of Section 3.1 shall
become a Participant on the Entry Date coinciding with or next
following the date the Employee satisfies such eligibility
requirements. Any Employee eligible to participate in the Plan
who desires to make Tax Reduction Contributions and/or Investment
Plan Contributions may elect to make such contributions by
executing and filing with his Employer an enrollment form, in
such form and manner as the Committee may prescribe, on which he
(i) authorizes Tax Reduction Contributions pursuant to a tax
reduction agreement as described in Section 4.1(b), or Investment
Plan Contributions pursuant to an investment plan agreement as
described in Section 4.2(b), or both, and (ii) designates a
contribution rate. Participation in the Plan with respect to
such contributions shall commence on the effective date of the
Employee s agreement in accordance with the provisions of Section
4.1(b) or Section 4.2(b), whichever date is earlier, and shall
continue in effect until amended or terminated. Upon
commencement of participation, each Employee shall designate a
Beneficiary and shall elect the Investment Funds to which
contributions made to the Plan on his behalf are to be allocated.
By commencing participation in the Plan, the Employee agrees to
be bound by all terms and conditions of the Plan as then in
effect or as thereafter amended.
3.3 Waiver of Participation. Any Employee eligible to
participate in the Plan who chooses not to participate in the
Plan with respect to Investment Plan Contributions and Tax
Reduction Contributions as of the first Entry Date following the
date he becomes eligible to participate shall waive his right to
participate until any subsequent Entry Date with respect to such
contributions.
3.4 Transfers from or to Eligible Employment. If a
Participant is transferred to a class of employment not eligible
for participation in this Plan but continues to be employed by an
Affiliated Company, no further contributions to the Trust shall
be made by or on behalf of the Participant under the Plan with
respect to periods on and after the transfer unless the
Participant is subsequently transferred back to eligible
employment. In addition, a new enrollment form containing a tax
reduction agreement must be executed in accordance with Section
4.1(b) or a new enrollment form containing an investment plan
agreement must be executed in accordance with Section 4.2(b)
before any Investment Plan Contributions or Tax Reduction
Contributions are made to the Plan on behalf of the Participant.
During the period of his employment in such transferred position:
(1) vesting shall continue in Matching Company
Contributions and TRIP+ Contributions; and
(2) he may make withdrawals, transfer his account among the
Funds, apply for loans pursuant to Article XIII, and
change Beneficiaries in accordance with the provisions
of the Plan.
If an employee is transferred to a class of employment eligible
for participation in this Plan, such Employee shall commence
participation in the Plan upon satisfying the eligibility
requirements of Section 3.1 determined by including all of such
employee s Years of Service (including Years of Service for
periods during which such Employee was in a class of employment
not eligible to participate in the Plan. In addition, such
Employee will be credited with Credited Service for periods of
service with the Company or an Affiliated Company during which he
was in a class of employment not eligible to participate in the
Plan for purposes of calculating TRIP+ Contributions to be made
on his behalf under Section 4.3A.
3.5 Hour of Service. An "Hour of Service" means:
(a) Performance of Duties. Each actual hour for which an
individual is paid or entitled to be paid for the performance of
duties for an Affiliated Company;
(b) Nonworking Paid Time. Each hour for which an individual
is paid or entitled to be paid by an Affiliated Company on
account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity,
disability, layoff, jury duty, military duty or leave of absence
provided, however, that no credit shall be given for payments
made or due under a plan maintained solely for the purpose of
complying with applicable worker's or unemployment compensation
or disability insurance laws or for payments which solely
reimburse an individual for medical or medically related expenses
incurred by the individual; and
(c) Back Pay. Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an
Affiliated Company.
Notwithstanding any other provision of this Plan to the
contrary, an individual shall not be credited with Hours of
Service more than once with respect to the same period of time.
3.6 Year of Service.
(a) In General. A "Year of Service" means each 365 day
period (disregarding fractional years), measured during the
period beginning on the date on which an employee of an
Affiliated Company (whether or not in a class of employment
eligible to participate in the Plan) first completes an Hour of
Service (or the first day of the month in which he is employed
and completes an Hour of Service, if his employment commences on
the first regularly scheduled workday of a month) and ending on
the earlier of (i) the date such employee quits, is discharged,
retires or dies or (ii) the first anniversary of the date such
employee is absent from active employment for any other reason
including, but not limited to, short-term disability, vacation,
leave of absence or layoff. The applicable date under (i) or (ii)
is such employee's "severance from service date".
(b) Service Spanning Rules. Notwithstanding the foregoing,
if an employee is severed from service with an Affiliated Company
by reason of quitting, discharge or retirement but returns to
employment with an Affiliated Company and performs an Hour of
Service within the 365 day period ending on the first anniversary
of his severance from service date, the interim period shall
count towards the computation of Years of Service. If an employee
of an Affiliated Company is absent for a reason described in
(a)(ii) of this Section 3.6 and then quits, is discharged or
retires but subsequently returns to employment and performs an
Hour of Service, the interim period of absence shall count
towards the computation of Years of Service, provided that the
date on which such employee again performs an Hour of Service
occurs within the 365 day period ending on the first anniversary
of the date the employee was first absent from employment for a
reason described in (a)(ii) of this Section 3.6.
(c) Leaves of Absence. In accordance with uniform rules,
the Committee may, in its sole and absolute discretion, count
certain periods of absence from active employment with an
Affiliated Company toward the computation of Years of Service,
even if not required pursuant to paragraphs (a) or (b) of this
Section 3.6.
3.7 Participation and Service Upon Reemployment. If an
individual s employment with an Affiliated Company is terminated
but he is reemployed as an Employee, the following rules shall
apply in determining his eligibility to participate in the Plan
and His Years of Service:
(a) If the reemployed employee was a Participant in the
Plan or had satisfied the service and age requirements of Section
3.1 during his prior period of employment, he shall be entitled
upon reemployment to become a Participant in the Plan (if he is
then included in a class of employment eligible to participate in
the Plan). In order to make contributions pursuant to Section
4.1 and/or Section 4.2, he shall be required to execute a new
enrollment form containing a tax reduction agreement in
accordance with Section 4.1(b) and/or a new investment plan
agreement in accordance with Section 4.2(b).
(b) If the reemployed employee was not a Participant in the
Plan or had not satisfied the service and age requirements of
Section 3.1 during his prior period of employment, such service
and age requirements must be satisfied and the employee must be
included in a class of employment eligible to participate in the
Plan before he becomes a Participant upon reemployment; provided,
however, that any Years of Service and Credited Service credited
during his prior period of employment shall be automatically
reinstated as of the date of his reemployment.
3.8 Predecessor Service. Credit towards Hours and Years of
Service shall be given for periods of employment with any
corporation that is a predecessor corporation of an Employer, or
a corporation merged, consolidated or liquidated into an Employer
or a predecessor of an Employer, or a corporation, substantially
all of the assets of which have been acquired by an Employer, but
only to the extent required by Section 414(a) of the Code;
provided, however, that even if not required by the Code, the
Committee, on a nondiscriminatory basis may, in its sole and
absolute discretion, grant credit for Hours and Years of Service
with a predecessor corporation. Without limitation of the
foregoing, all service credited to an employee of an Affiliated
Company as of March 31, 1989 for eligibility and vesting purposes
under the terms of the Prior Plan shall be credited as of April
1, 1989 for such purpose hereunder.
3.9 Credited Service.
(a) In General. Credited Service shall be used to
determine the amount of TRIP+ Contributions to be made by the
Employer on behalf of each Participant under Section 4.3A and
shall be calculated in accordance with paragraph (b) of this
Section 3.9.
(b) Calculation of Credited Service. In determining an
Employee s Credited Service under the Plan, each Employee will be
credited with periods of service credited under any defined
benefit pension plan maintained by the Company or an Affiliated
Company (a "Pension Plan") and, with respect to any periods of
service not credited to an Employee under a Pension Plan, the
Employee s service with the Company or an Affiliated Company and
any predecessor entity to the Company or an Affiliated Company
commencing on the date the Employee first completes an Hour of
Service for the Company, an affiliated Company or any predecessor
entity to the Company or an Affiliated Company and ending on the
date he separates from service with the Company or an Affiliated
Company. For periods during which an Employee is not credited
with service under a Pension Plan, the Employee will be credited
with one month of service for each month in which he performs one
Hour of Service or in which he receives short-term or long-term
disability payments from a disability program maintained by the
Company or an Affiliated Company.
ARTICLE IV
CONTRIBUTIONS
4.1 Tax Reduction Contributions.
(a) Amount of Contributions. Any Employee eligible to
participate in the Plan may elect to have the Company make Tax
Reduction Contributions to the Trust on his behalf by executing
an enrollment form containing a tax reduction agreement as
described in Section 4.1(b). The amount of Tax Reduction
Contributions made on behalf of a Participant for any payday
shall equal that whole percentage of his Compensation per payday
selected by the Participant, subject to the restrictions and
limitations of Section 4.6 and Article V hereof.
(b) Tax Reduction Agreement.
(i) Nature of Agreement. The tax reduction agreement
referred to in Section 4.1(a) shall be a legally
binding agreement (on a form prescribed by the
Committee) whereby (A) the Participant agrees that, as
of the effective date of the agreement, the
Compensation otherwise payable to him thereafter shall
be reduced by a whole percentage (as selected by the
Participant) not to exceed the maximum percentage
permitted under Section 4.6, and (B) the Employer
agrees to contribute the total amount of such reduction
in Compensation to the Trust on behalf of the
Participant as a Tax Reduction Contribution under
Section 4.1(a). Such contributions may be made by the
Employer to the Trust on a monthly basis, provided that
in no event shall the Company's aggregate contribution
on behalf of a Participant under Section 4.1(a) with
respect to any pay period be made to the Trust later
than the earliest date on which the contribution can
reasonably be segregated from the Company s general
assets or such later date prescribed by the Code or
applicable Treasury or Department of Labor regulations.
Subject to the provisions of paragraph (v) of this
Section 4.1(b) and Article V hereof, a Participant's
tax reduction agreement shall remain in effect until
modified or terminated in accordance with paragraphs
(iii) or (iv) of this Section 4.1(b).
(ii) Effective Date of Agreement. The effective date of
a Participant's tax reduction agreement shall be no
earlier than the first Entry Date commencing at least
30 days after such agreement is received in executed
form by the Committee (provided such effective date is
no earlier than the date the Participant first becomes
eligible to participate in the Plan).
(iii) Amendment of Agreement.
(A) A Participant may amend his tax reduction
agreement with respect to Compensation not
yet paid to provide a new lower whole
percentage to be used to determine his
reduced Compensation amount; provided,
however, the amended tax reduction agreement
shall be effective no earlier than the first
Entry Date commencing at least 30 days after
Notice is received. A Participant may not
amend his tax reduction agreement to lower
his percentage more often than two times in
any Plan Year.
(B) A Participant may amend his tax reduction
agreement with respect to Compensation not
yet paid to provide a new higher percentage
(within the limits of Section 4.6) to be used
to determine his reduced Compensation amount.
A Participant who is a Non-Highly Compensated
Employee may increase his Tax Reduction
Contributions effective as of any Entry Date,
provided that the Committee has received an
amended tax reduction agreement at least 30
days prior to such Entry Date. A Participant
who is a Highly Compensated Employee may
increase his Tax Reduction Contributions
effective only as of the first day of a Plan
Year, provided that the Committee has
received an amended tax reduction agreement
at least 30 days prior to the first day of
such Plan Year. The Committee may, in its
sole and absolute discretion, shorten the 30-day prior
notice periods required under this
paragraph (iii).
(iv) Termination of Agreement. A Participant may
terminate his tax reduction agreement at any time with
respect to Compensation not yet paid. The effective
date of termination shall be as soon as
administratively possible after the Participant's
notice of termination is received in executed form by
the Committee. Any Participant who terminates his tax
reduction agreement shall be permitted to execute a new
tax reduction agreement and resume having contributions
made to the Trust on his behalf under Section 4.1(a),
provided that the effective date of such new tax
reduction agreement shall be determined in the same
manner as the effective date is determined for
increased Tax Reduction Contributions under paragraph
(iii) of this Section 4.1(b).
(v) Transfer to Ineligible Employment or Termination
of Employment. A Participant's tax reduction agreement
shall terminate automatically if the Participant
transfers to a class of employment not eligible for
participation in this Plan or if he terminates his
reemployment with the Employer. Upon return of the
Participant to eligible employment, the Participant
shall be permitted to execute a new tax reduction
agreement and resume having contributions made to the
Trust on his behalf under Section 4.1(a), provided that
the effective date of the new tax reduction agreement
shall be no earlier than the later of (A) the first
Entry Date commencing at least 30 days after the
agreement is received in executed form by the Committee
or (B) the date the Participant resumes eligible
employment. Transfers of Participants to different
payroll systems among the Employers shall be
administered by procedures established by the
Committee.
4.2 Investment Plan Contributions.
(a) Amount of Contributions. Any Employee eligible to
participate in the Plan may elect to make Investment Plan
Contributions to the Trust by executing an enrollment form
containing an investment plan agreement as described in Section
4.2(b). The amount of Investment Plan Contributions made by a
Participant for any payday shall equal that whole percentage of
his Compensation per payday selected by the Participant, subject
to the restrictions and limitations contained in Section 4.6 and
Article VI hereof.
(b) Investment Plan Agreement.
(i) Nature of Agreement. The investment plan
agreement referred to in Section 4.2(a) shall be a
legally binding agreement (on a form prescribed by the
Committee) whereby (A) the Participant agrees that, as
of the effective date of the agreement, the
Compensation otherwise payable to him thereafter shall
be adjusted by a whole percentage (as selected by the
Participant) not to exceed the maximum percentage
permitted under Section 4.6 and (B) the Participant
agrees to contribute the total amount of said
adjustment in Compensation upon each payday to the
Trust as an Investment Plan Contribution under Section
4.2(a). Such contributions may be made by the Employer
to the Trust on a monthly basis, provided that in no
event shall the Company s aggregate contribution on
behalf of a Participant under Section 4.2(a) with
respect to any pay period be made to the Trust later
than the earliest date on which the contribution can
reasonably be segregated from the Company s general
assets or such later date prescribed by the Code or
applicable Treasury or Department of Labor regulations.
Subject to the provisions of paragraph (v) of this
Section 4.2(b) and Article VI hereof, a Participant's
investment plan agreement shall remain in effect until
modified or terminated in accordance with paragraphs
(iii) or (iv) of this Section 4.2(b).
(ii) Effective Date of Agreement. The effective date
of a Participant's investment plan agreement shall be
no earlier than the first Entry Date commencing at
least 30 days after such agreement is received in
executed form by the Committee (provided such effective
date is no earlier than the date the Participant first
becomes eligible to participate in the Plan).<PAGE>
(iii) Amendment of Agreement. A Participant may
amend his investment plan agreement at any time with
respect to Compensation not yet paid to increase or to
decrease the whole percentage of his Compensation
(within the limits of Section 4.6) to be used to
determine his Investment Plan Contribution. The
amended investment plan agreement shall be effective no
earlier than the first Entry Date commencing at least
30 days after Notice is received. A Participant may
not amend his investment plan agreement under this
Section 4.2(b)(iii) more often than two times in any
Plan Year.
(iv) Termination of Agreement. A Participant may
terminate his investment plan agreement at any time
with respect to Compensation not yet paid. The
effective date of termination shall be as soon as
administratively possible after the Participant's
notice of termination is received in executed form by
the Committee. Any Participant who terminates his
investment plan agreement shall be permitted to execute
a new investment plan agreement and resume making
contributions to the Trust under Section 4.2(a),
provided that the effective date of such new investment
plan agreement shall be no earlier than a subsequent
Entry Date (and, in the case of a Highly Compensated
Participant, the first Entry Date in the following Plan
Year), in any case commencing at least 30 days after
the new investment plan agreement is received in
executed form by the Committee.
(v) Transfer to Ineligible Employment or Termination
of Employment. A Participant's investment plan
agreement shall terminate automatically if the
Participant transfers to a class of employment not
eligible for participation in this Plan or if he
terminates his employment with the Employer. Upon
return of the Participant to eligible employment, the
Participant shall be permitted to execute a new
investment plan agreement and resume making
contributions to the Trust under Section 4.2(a),
provided that the effective date of the new investment
plan agreement shall be no earlier than the later of
(A) first Entry Date commencing at least 30 days after
the agreement is received in executed form by the
Committee or (B) the date the Participant resumes
eligible employment. Transfers of Participants to
different payroll systems among the Employers shall be
administered by procedures established by the
Committee.
4.3 Matching Company Contributions.
(a) Contributions. In addition to the contributions
described in Sections 4.1, 4.2, 4.3A and 4.4 hereof, the
Employer shall make Matching Company Contributions to the Trust
on behalf of each Participant. The amount of Matching Company
Contributions for any given Plan Year shall be determined by the
Employer, in conjunction with Zurn, and shall be subject to the
limitations of Section 6.1; provided, however, that no Matching
Company Contributions will be made with respect to Tax Reduction
Contributions or Investment Plan Contributions that in the
aggregate exceed 6% of a Participant's Compensation for the Plan
Year. If, as of the last day of any Plan Year, the Employer
determines that a Participant who is an Employee on the last day
of such Plan Year did not receive the amount of Matching Company
Contributions to which such Participant was entitled for the Plan
Year based on his Tax Reduction Contributions and Investment Plan
contributions made during the Plan Year and his Compensation for
the Plan Year, the Employer shall make an additional Matching
Company Contribution on behalf of such Participant in an amount
necessary to provide the Participant with the Matching Company
Contribution to which he is entitled for such Plan Year at the
time prescribed in Section 4.3(b).
(b) Timing of Matching Company Contributions. The Matching
Company Contributions made to the Trust under Section 4.3(a) for
any Plan Year generally shall be made quarterly, and in no event
later than the date described in Section 4.5.
(c) Waiver of Matching Contributions. In accordance with
rules prescribed by the Committee, a Participant may waive in
advance of any Plan Year or other prescribed period the
allocation of Matching Company Contributions to his Matching
Company Contribution Account that otherwise would be made
thereto.
4.3A TRIP+ Contributions. In addition to the contributions
described in Sections 4.1, 4.2, 4.3 and 4.4 hereof, the Employer
shall make TRIP+ Contributions to the Trust for each calendar
quarter in the amount determined under paragraphs (a) and (b)
below.
(a) Level One Contributions. The Employer shall contribute
on behalf of each Participant an amount equal to 2% of the
Participant s Compensation.
(b) Level Two Contributions. The Employer shall contribute
on behalf of each Participant a percentage of the Participant s
Compensation determined under the following formula, based on the
Participant s years of Credited Service:
Years of Credited
Service
Percentage of
Compensation
Less than 5
0%
5 but less than 15
2%
15 but less than
20
4%
20 or more
7%
The Employer may for any Plan Year designate all or any portion
of the TRIP+ Contributions made pursuant to this Section 4.3A(b)
for such Plan Year as "qualified non-elective contributions"
within the meaning of Section 401(m)(4)(C) of the Code.
4.4 Employer Qualified Non-Elective Contributions. To
insure that the Actual Deferral Percentage tests of Section
401(k) of the Code as described in Section 5.2 hereof or the
Contribution Percentage tests of Section 401(m) of the Code as
described in Section 6.1 hereof are met for any Plan Year, an
Employer, under such rules and regulations as the Secretary of
the Treasury may prescribe, may make additional contributions
that shall constitute "qualified non-elective contributions"
within the meaning of Section 401(m)(4)(C) of the Code on behalf
of Non-Highly Compensated Employees selected by the Company who
are eligible to make Tax Reduction Contributions or Investment
Plan Contributions for the Plan Year. Each Plan Year an Employer
shall designate the portion, if any, of the qualified
non-elective contributions that it made for the Plan Year that
shall be considered under Section 5.2 for the Actual Deferral
Percentage tests and the portion, if any, that shall be
considered under Section 6.1 for the Contribution Percentage
test.
4.5 Time of Contributions. In addition to any other
requirements hereunder relating to the timing of contributions,
contributions made by an Employer pursuant to Sections 4.1, 4.3,
4.3A or 4.4 if any, for any fiscal year of the Employer shall be
paid in full not later than the time prescribed by law to enable
the Employer to obtain a deduction therefor on its Federal income
tax return for said year. Contributions made after the last day
of the Plan Year but within the time for filing an Employer's
Federal income tax return (including extensions thereof) for the
fiscal year that ends with or within the last day of the Plan
Year shall be deemed made as of the last day of that Plan Year if
so directed by the Employer, except such contributions shall not
share in increase, decreases, or income to the Trust Fund prior
to the date actually made. Notwithstanding the foregoing, upon
an Employer's request, a contribution that was made upon a
mistake of fact or upon deductibility of the contribution shall
be returned to the Employer within one year after the payment of
the contribution or disallowance of the deduction (to the extent
disallowed) as the case may be; provided, however, the amount
returned to an Employer due to mistake of fact or denial of
deductibility shall not be increased by any earnings thereon and
shall be reduced by any losses attributable to such amount.
4.6 Maximum Combined Tax Reduction and Investment Plan
Contributions. Notwithstanding any provision of Sections 4.1 and
4.2 to the contrary, no Participant may make Tax Reduction
Contributions and/or Investment Plan Contributions in an amount,
when combined for any Plan Year, in excess of 15% of such
Participant's Compensation or such other percentage as the
Committee shall determine for purposes of complying with any
restriction or limitation imposed by the Code.
4.7 Manner of Making Contributions. All contributions to
the Trust shall be paid directly to the Trustee. Tax Reduction
Contributions and Investment Plan Contributions shall be made in
cash. Matching Company Contributions and TRIP+ Contributions
made with respect to calendar quarters ending on and after June
30, 1997 and before June 30, 1998 shall be made in Zurn Stock
except as otherwise directed by Zurn, acting in its discretion.
Matching Company Contributions and TRIP+ Contributions made with
respect to calendar quarters ending on and after June 30, 1998
shall be made in U.S. Industries Stock except as otherwise
directed by Zurn, acting in its discretion. Rollover
Contributions shall be made as provided in Section 4.9. In
connection with each contribution, the Employer shall provide the
Recordkeeper with the following information:
(a) the identity of each Participant on whose behalf the
contribution is being made and the amount thereof; and
(b) whether the amount contributed on behalf of the
Participant is a Tax Reduction Contribution, an Investment Plan
Contribution, a Matching Company Contribution, a TRIP+
Contribution, or a Rollover Contribution.
The Recordkeeper shall provide the Trustee with any of the
information received by it which is necessary for the Trustee to
perform its duties and obligations with respect to the Trust.<PAGE>
4.8 Reduction of Employer Contributions. The aggregate
contributions of each Employer pursuant to Sections 4.3, 4.3A and
4.4 in any Plan Year shall be reduced by the value of Accounts
forfeited under the provisions of Sections 5.1, 5.3, 6.2, 8.3,
10.3 and 11.9 after payment of expenses pursuant to Section 14.8.
4.9 Rollover Contributions. Any Participant or Employee
(including an Employee who has not satisfied the eligibility
requirements of Article III), with the Committee's written
consent and after complying with all applicable laws and filing
with the Trustee the form prescribed by the Committee, may make
or have made on his behalf a Rollover Contribution as described
in Section 2.48. The Committee may adopt rollover procedures
and, before permitting a Rollover Contribution, may require an
Employee to furnish such information regarding the amount
proposed to be rolled over as the Committee determines is
necessary or appropriate. If a Rollover Contribution is made by
or on behalf of an Employee who has not satisfied the eligibility
requirements of Article III, the provisions of the Plan shall be
generally applicable to such Employee and the Rollover
Contribution, unless expressly provided otherwise herein. The
Committee shall allocate and credit a Rollover Contribution to
the contributing party's Rollover Contribution Account as of the
Valuation Date immediately following the date on which the
Rollover Contribution is made. A Rollover Contribution shall be
nonforfeitable and the value thereof shall be paid to the
Participant in the manner the Participant (or, if applicable, the
Participant's Beneficiary) elects pursuant to Section 11.4 upon
retirement, termination of employment, Disability or death.
Rollover Contributions shall be made in cash and not in stock or
other property, unless otherwise permitted by the Committee. An
investment election on a form prescribed by the Committee shall
be submitted with an Employee's Rollover Contribution and shall
direct that such contribution be invested in the Investment Funds
in multiples described in Section 9.5(d). Hereafter, the
Employee may change the investment of his Rollover Contribution
in accordance with Section 9.5(d)(ii).
4.10 Transfers from Other Plans. The Committee, in its
discretion, may accept a direct transfer to the Plan from another
plan qualified under Section 401(a) of the Code of all or a
portion of the amount credited under such other plan to an
Employee; provided, however, that the Plan shall not accept a
transfer from any plan that is subject to the survivor annuity
requirements of Sections 401(a)(11) or 417 of the Code. The
Committee may adopt rules with respect to any such transfer
including, but not limited to, rules with respect to accounting
for, and the investment of, amounts transferred. In the event
that an amount transferred to the Plan pursuant to this Section
4.10 is attributable to a cash or deferred election that was made
pursuant to Section 401(k) of the Code, such amount shall be
subject to the same rules that apply under the Plan to Tax
Reduction Contributions.<PAGE>
ARTICLE V
LIMITATIONS AND RESTRICTIONS ON
TAX REDUCTION CONTRIBUTIONS
5.1 Dollar Limitation. For any taxable year of a Partici-
pant, the aggregate amount of (i) contributions made to the Plan
pursuant to Section 4.1 on behalf the Participant for that
taxable year, and (ii) amounts deferred by the Participant for
that taxable year under a salary reduction agreement under any
other plan, contract or agreement described in Sections 401(k),
403(b) or 408(k) of the Code sponsored by an Affiliated Company,
shall not exceed $7,000 or such other dollar limitation
prescribed by Code Section 402(g) for that taxable year as
adjusted by the Secretary of the Treasury at the same time and in
the same manner as provided under Section 415(d) of the Code for
adjusting the dollar limitation in effect under Section
415(b)(1)(A) of the Code (such dollar limitation, as adjusted,
shall hereinafter be referred to as the "Annual Deferral
Limitation").
If Tax Reduction Contributions made on behalf of a
Participant for a taxable year exceed the Annual Deferral
Limitation for that year, the amount of such excess-shall be
referred to as "Excess Elective Deferrals." Excess Elective
Deferrals (adjusted for the income or loss attributable to such
excess amount) shall be distributed to the Participant not later
than the April 15 immediately following the taxable year of the
Participant for which the Excess Elective Deferrals were made to
the Plan. The Company shall reduce the amount of the Excess
Elective Deferrals under this Section 5.1 by the amount of Excess
Contributions (as determined under Section 5.3), if any,
previously distributed to the Participant for the Plan Year
beginning in that taxable year. The Company shall determine the
net income or net loss in the same manner as described in Section
5.3 for Excess Contributions, except the numerator of the
allocation fraction shall be the amount of the Participant's
Excess Elective Deferrals for the taxable year under this Section
5.1 and the denominator of the allocation fraction shall be the
balance of the Participant's Tax Reduction Contribution Account
attributable to Tax Reduction Contributions as of the end of the
taxable year (without regard to the net income or net loss for
the taxable year on that portion of the Participant s Tax
Reduction Contribution Account); provided, however, if there is a
loss attributable to such excess amount, the amount of the
distribution adjusted for such loss shall be limited to an amount
which does not exceed the lesser of (i) the aggregate balance of
the Participant's Tax Reduction Contribution Account or (ii) the
Tax Reduction Contributions made on behalf of the Participant for
that taxable year. In adjusting a Participant's Excess Elective
Deferrals for the income or loss attributable to such Excess
Elective Deferrals, the income or loss attributable to such
excess contributions for the "gap period" shall not be
considered. For purposes of this Section 5.1, "gap period" shall
mean the period beginning with the first day of the taxable year
next following the taxable year for which the Excess Elective
Deferrals were made on behalf of the Participant and ending on
the date of the distribution. If the Excess Elective Deferrals
are distributed to a Participant from the Plan pursuant to this
Section 5.1, the <PAGE>
Matching Company Contribution, if any, to which such Excess
Elective Deferrals relate (plus any income and minus any loss
attributable thereto), determined after the application of
Section 6.2, shall be forfeited (whether or not vested) at the
time the Excess Elective Deferrals are distributed, and the
forfeitures shall be applied as set forth in Section 11.12.
If the Participant also (i) participates in one or more
other qualified cash or deferred arrangements within the meaning
of Section 401(k) of the Code, (ii) has employer contribution
made on his behalf pursuant to a salary reduction agreement under
Section 408(k) of the Code, or (iii) has an employer contribution
made on his behalf pursuant to a salary reduction agreement
toward the purchase of an annuity contract under Section 403(b)
of the Code, and the sum of the elective deferrals [as defined in
Section 402(g)(3) of the Code] that are made for the Participant
during a taxable year under such other arrangements and this Plan
exceeds the Annual Deferral Limitation for that taxable year, the
Participant shall, not later than the March 1 following the close
of his taxable year for which the Excess Elective Deferrals have
been made, notify the Committee in writing of the portion of the
Excess Elective Deferrals that he wishes to be allocated to this
Plan, if any, and request that the Tax Reduction Contributions
made on his behalf under this Plan be reduced by the allocable
amount specified by the Participant. If all plans, contracts and
agreements described in Sections 401(k), 403(b) and 408(k) of the
Code pursuant to which the Participant is able to defer amounts
for a taxable year for which Excess Elective Deferrals have been
made are sponsored by an Affiliated Company, the Company shall
determine to which plan, contract or agreement (including the
Plan) the Excess Elective Deferrals shall be allocated for that
taxable year end if the Excess Elective Deferrals are to be
allocated to the Plan, the Company shall notify the Committee in
writing not later than March 1 following the close of that
taxable year. Such notification shall be deemed to be a
notification by the Participant to the Committee. The portion of
Excess Elective Deferrals that is allocated to this Plan, if any,
shall be adjusted for income and loss in the same manner as
described in Section 5.3 and shall then be distributed to the
Participant no later than the immediately following April 15. If
the Tax Reduction Contributions made on behalf of a Participant
for a taxable year do not exceed the Annual Deferral Limitation
for that taxable year and the Committee has not received any
written Notice from the Participant (or deemed to have received
such Notice as described above) by the March 1 immediately
following that taxable year notifying the Committee that the
Participant allocates a portion of the Excess Elective Deferrals,
if any, for that taxable year to the Plan, the Committee may
assume that none of the Tax Reduction Contributions made on
behalf of the Participant for that taxable year constitute Excess
Elective Deferrals and that no distribution is required to be
made from the Participant's Tax Reduction Contribution Account
pursuant to this Section 5.1. Notwithstanding the fact that
Excess Elective Deferrals have been (or will be) distributed to a
Highly Compensated Employee as provided above, the excess amount
of such Tax Reduction Contributions or the portion of such Tax
Reduction Contributions that are deemed to constitute Excess
Elective Deferrals by reason of the Company's or Participant's
written Notice of allocation hereunder shall still be treated as
a Tax Reduction Contribution for purposes of applying the Actual
Deferral Percentage test described in Section 5.2 hereof for the
Plan Year in which such Excess Elective Deferrals were made,
except to the extent provided under rules prescribed by the
Secretary of Treasury.
5.2 Actual Deferral Percentage Tests. For each Plan Year,
the Employer shall determine whether the aggregate amount
allocated to each Participant's Tax Reduction Contribution
Account attributable to Tax Reduction Contributions, and
qualified non-elective contributions (that are designated under
Section 4.3A and/or Section 4.4 for consideration under this
Section 5.2) made for that Plan Year shall satisfy one of the
following tests, in addition to the test set forth in Article
VII:
(a) the "Actual Deferral Percentage" for the group
consisting of all eligible Highly Compensated Employees (as
defined below) shall not exceed the "Actual Deferral Percentage"
for the group consisting of all eligible Non-Highly Compensated
Employees (as defined below) multiplied by 1.25; or
(b) the "Actual Deferral Percentage" for the group
consisting of all eligible Highly Compensated Employees shall not
exceed the lesser of (i) 200% of the "Actual Deferral Percentage"
for the group consisting of all eligible Non-Highly Compensated
Employees or (ii) the "Actual Deferral Percentage" for the group
consisting of all eligible Non-Highly Compensated Employees plus
two percentage points or such lesser amount as the Secretary of
the Treasury shall prescribe.
For purposes of this Article V, the following terms shall
have the following meanings:
(a) "Actual Deferral Percentage" for a Plan Year means,
with respect to the group consisting of the eligible Highly
Compensated Employees and the group consisting of the eligible
Non-Highly Compensated Employees, the average (expressed as a
percentage) of the ratios, calculated separately for each
Employee in each such group and rounded to the nearest
one-hundredth of one percent, of the amount of Tax Reduction
Contributions and qualified non-elective contributions (which are
designated under Section 4.3A and/or Section 4.4 for
consideration under this Section 5.2) allocated to each
Employee s Tax Reduction Contribution Account (unreduced in the
case of Highly Compensated Employees by distributions made to
such Employee pursuant to Section 5.1 hereof) for such Plan Year
to such Employee s Compensation as defined in Section 2.13(c) for
the Plan Year.
For aggregated Family Members treated as a single Highly
Compensated Employee under Section 2.22(b)(iv), the ratio of the
family unit is the greater of (i) the ratio determined by
combining the aggregate Tax Reduction Contributions and qualified
non-elective contributions (described above) allocated to each
Employee s Tax Reduction Contribution Account (unreduced by
distributions made to such Employee pursuant to Section 5.1
hereof) for such Plan Year and dividing such sum by the
Compensation for such Plan Year of the Family Members who are
Highly Compensated Employees without family aggregation or (ii)
the ratio determined by combining the aggregate Tax Reduction
Contributions and qualified non-elective contributions (described
above) allocated to each Employee's Tax Reduction Contribution
Account (unreduced by distributions made to such Employee
pursuant to Section 5.1 hereof) for such Plan <PAGE>
Year and dividing
such sum by the Compensation for such Plan Year
of all aggregated Family Members. Each Family Member aggregated
with a Highly Compensated Employee for purposes of the preceding
sentence shall not be considered a separate Employee in
determining the Actual Deferral Percentage for either eligible
Highly Compensated Employees or eligible Non-Highly Compensated
Employees.
(b) "Actual Deferral Ratio" means each separately
calculated ratio under subparagraph (a) above.
An Employee who is considered a Highly Compensated Employee
under Section 2.22 or a Non-Highly Compensated Employee under
Section 2.35 shall be considered an "eligible Highly Compensated
Employee" or an "eligible Non-Highly Compensated Employee" for
purposes of this Section 5.2 for each Plan Year he is employed by
an Employer if he has satisfied the eligibility requirements of
Article III and reached an Entry Date on which he could have
become a Participant, regardless of (i) whether he has elected to
have an Employer make a Tax Reduction Contribution to the Plan on
his behalf under Section 4.1 for that Plan Year, (ii) whether his
right to make Tax Reduction Contributions to the Plan for that
Plan Year has been suspended under Section 11.1 due to his
receipt of a hardship distribution, or (iii) he is suspended from
further contributions during the Plan Year due to the limitations
of Section 415 of the Code as described in Article VIII.
Consequently, for purposes of this Section 5.2, the Actual
Deferral Ratio for each Highly Compensated Employee and
Non-Highly Compensated Employee who is eligible to, but does not
elect to have an Employer make an Employee Tax Reduction
Contribution on his behalf to the Plan for a Plan Year, shall be
zero for that Plan Year, unless the Employer makes a qualified
non-elective contribution to the Plan for a Plan Year to satisfy
the Actual Deferral Percentage tests, in which case the Actual
Deferral Ratio for each such Non-Highly Compensated Employee
shall be the ratio of that portion of the qualified non-elective
contribution attributable to contributions made by the Employer
to satisfy the Actual Deferral Percentage tests that is allocated
to his Tax Reduction Contribution Account for the Plan Year to
his Compensation as defined in Section 2.13(c) for the Plan Year.
If any Employee who is an eligible Highly Compensated
Employee is a participant in two or more cash or deferred
arrangements described in Section 401(k) of the Code that are
maintained by an Affiliated Company, excluding any such
arrangement that is part of an employee stock ownership plan [as
defined in Section 4975(e)(7) of the Code] for purposes of
determining his ratio under this Section 5.2, all such cash or
deferred arrangements shall be treated as one cash or deferred
arrangement to the extent required under Section 401(k) of the
Code. For purposes of this Section 5.2, if two or more plans or
arrangements described in Section 401(k) of the Code are
considered one plan for the purposes of Sections 401(a)(4) or
410(b) of the Code, such arrangements shall be treated as a
single arrangement, and if the plans use different plan years,
the Company shall determine the combined cash or deferred <PAGE>
contributions
and ratios on the basis of the plan years ending in
the same calendar year. The Committee shall maintain records to
demonstrate compliance with the tests under this Section 5.2,
including the extent to which the Plan used qualified non-elective
contributions pursuant to Section 4.3A and/or Section
4.4 to satisfy a test.
5.3 Adjustments Required to Satisfy an Actual Deferral
Percentage Test. If Tax Reduction Contributions made for any
Plan Year do not satisfy one of the tests set forth in Section
5.2, the excess amount that would result in a test being
satisfied for that Plan Year if it had not been made to the Plan
shall be referred to as an "Excess Contribution" and the
Committee shall, in its sole and absolute discretion and
notwithstanding any other provision of the Plan to the contrary
(but subject to the provisions of Sections 5.4, 5.5 and 5.6),
make appropriate adjustments pursuant to one or more of the
following provisions:
(a) Within 2-1/2 months following the close of the Plan
Year for which an Excess Contribution was made, Tax Reduction
Contributions representing the Excess Contribution may be
recharacterized as Investment Plan Contributions, subject to the
conditions set forth in this Section 5.3;
(b) Within 2-1/2 months following the close of the Plan
Year for which an Excess Contribution was made, if
administratively possible, and within 12 months after the close
of such Plan Year at the latest, the Excess Contribution (plus
any income and minus any loss attributable thereto) shall be
distributed to the Highly Compensated Employees to whose Tax
Reduction Contribution Account all or a portion of such Excess
Contribution was made first from such Highly Compensated
Employees' unmatched Tax Reduction Contributions, and then if
necessary, from the such Highly Compensated Employees' matched
Tax Reduction Contributions; provided, however, that if matched
Tax Reduction Contributions are distributed to correct an Excess
Contribution, the Matching Company Contributions to which such
Excess Contribution relates (plus any income and minus any loss
attributable thereto) shall be forfeited (whether or not vested)
at the time the Excess Contribution is distributed and the
forfeiture shall be applied as set forth in Section 11.12; or
(c) Within the time prescribed by law to enable an Employer
to obtain a deduction for a contribution on its federal income
tax return for the Plan Year for which an Excess Contribution was
made, the Employer shall, if the conditions applicable to
qualified non-elective contributions under final Treasury
Regulations issued by the Secretary of the Treasury are
satisfied, make a qualified non- elective contribution pursuant
to Section 4.3A and/or 4.4 on behalf of the eligible Non-Highly
Compensated Employees (as defined in Section 5.2) who meet the
requirements of Section 4.4 in an amount sufficient to satisfy
one of the tests set forth in Section 5.2 [before or after the
application of subsections (a) and/or (b)above].
Tax Reduction Contributions that are recharacterized as
Investment Plan Contributions pursuant to subsection (a) hereof
shall be reported to the Internal Revenue Service and to the
affected Highly Compensated Employee as income for the taxable
year in which the Highly Compensated Employee would have received
the recharacterized Tax Reduction Contributions in cash, had he
not elected to have such amounts contributed to the Plan. These
characterized amounts shall be treated as Investment Plan
Contributions for purposes of Sections 72, 401(a)(4) and 6047 of
the Code and for purposes of applying the Contribution Percentage
tests of Section 6.1 (for the Plan Year when included as income
by the Highly Compensated Employee), but such amounts shall be
treated for all other purposes under the Plan as Tax Reduction
Contributions. The Employer shall notify each affected Highly
Compensated Employee of the recharacterization within 2-l/2
months following the Plan Year to which the recharacterization
occurs.
With respect to Plan Years beginning before January 1, 1997,
the amount of the Excess Contributions to be distributed pursuant
to subsection (b) hereof shall be determined by a leveling
method, under which the Actual Deferral Ratio of the Highly
Compensated Employee with the highest Actual Deferral Ratio is
reduced to the extent required (i) to enable the Plan to
satisfying of the Actual Deferral Percentage tests set forth in
Section 5.2 or (ii) to cause such Highly Compensated Employee s
Actual Deferral Ratio to equal the Actual Deferral Ratio of the
Highly Compensated Employee with the next highest Actual Deferral
Ratio. This procedure shall be repeated until the Plan satisfies
one of the Actual Deferral Percentage tests set forth in Section
5.2. Once the Plan satisfies one of the Actual Deferral
Percentage tests, the amount of the Excess Contributions for each
Highly Compensated Employee who had his Actual Deferral Ratio
reduced under the preceding sentences shall be determined for
each such Employee by first subtracting from the total Tax
Reduction Contributions made on his behalf (without regard to
this Section 5.3) the product of such Employee's Actual Deferral
Ratio (as reduced under this Section 5.3) and his Compensation
and then subtracting the amount of Excess Deferrals for the Plan
Year, if any, that have been previously distributed under Section
5.1 to the Employee for the taxable year ending in that Plan
Year.
With respect to Plan Years beginning on and after January 1,
1997, the amount of Excess Contributions to be distributed
pursuant to subsection (b) hereof shall be determined by first
determining the total dollar amount of Tax Reduction
Contributions which must be reduced to satisfy the limitation and
by allocating these amounts, in accordance with guidance provided
by the Secretary of the Treasury or his delegate, to the Highly
Compensated Employees on behalf of whom the largest amounts of
Tax Reduction Contributions have been made to the Plan for the
given Plan Year.
Excess Contributions of each Highly Compensated Employee
subject to the family member aggregation rules under Section
2.22(b)(iv) shall be allocated among the Highly Compensated
Employee and his aggregated Family Members in proportion to the
Tax Reduction Contributions and qualified non-elective
contributions that are considered under Section 5.2 of the Highly
Compensated Employee and each such Family Member aggregated with
him to determine the combined Actual Deferral Ratio.
The income or loss attributable to the portion of the Excess
Contributions for a Plan Year that are to be distributed to a
Highly Compensated Employee hereunder shall be determined by
multiplying the amount of the income or loss allocable to the
Participant's Tax Reduction Contribution Account for the Plan
Year by a fraction, the numerator of which is the portion of the
Excess Contributions for the Plan Year that is to be distributed
to that Participant and the denominator of which is the balance
of the Participant's Tax Reduction Contribution Account on the
last day of the Plan Year after adjustment as of such date under
Section 9.4. In adjusting a Participant's Excess Contributions
for the income or loss attributable to such Excess Contributions,
the income or loss attributable to such Excess Contributions for
the "gap period" shall not be considered. For purposes of this
Section 5.3, "gap period" shall mean the period beginning with
the first day of the Plan Year next following the Plan Year for
which the Excess Contributions were made on behalf of the
Participant and ending on the date of the distribution.
5.4 Election of Applicable Correction Methods By Highly
Compensated Employees. For purposes of satisfying the Actual
Deferral Percentage tests, the Committee, in its sole discretion,
may permit a Highly Compensated Employee to elect whether the
appropriate method of correcting Excess Contributions shall be
recharacterization pursuant to Section 5.3(a), distribution
pursuant to Section 5.3(b) or a combination of both.
5.5 Additional Adjustments of Tax Reduction Contributions.
For purposes of assuring compliance with the Actual Deferral
Percentage tests of Section 5.2 hereof, the Committee may, in its
sole and absolute discretion, make such adjustments, reductions
or suspensions to Tax Reduction Contribution rates of
Participants who are Highly Compensated Employees at such times
and in such amounts as the Committee shall reasonably deem
necessary, including prospective reductions of Tax Reduction
Contributions at any time prior to or within a Plan Year. The
Committee shall make such adjustments, reductions or suspensions
based upon periodic reviews of the Tax Reduction Contribution
rates of Highly Compensated Employees during the Plan Year and
may make such adjustments, reductions or suspensions in any
amount notwithstanding any other provisions hereof. In addition,
the Committee shall take any other action to assure compliance
with the Actual Deferral Percentage tests as shall be prescribed
by the Secretary of the Treasury.
5.6 Other Permissible Methods of Testing and Correction.
The provisions of this Article V are intended to conform with
Sections 401(k) and 402(g) of the Code. In the event that the
Committee determines, based on changes to the Code or
interpretations or guidance issued by the Internal Revenue
Service, that the requirements of such Code sections may be
applied in a manner different from that prescribed in this
Article V, the Committee may make appropriate adjustments to the
administration of the Plan to incorporate such changes to the
Code or interpretations or guidance. If a change to the Code or
interpretations or guidance issued by the Internal Revenue
Service results in more than one additional option in the manner
in which this Article V may be administered, the Committee shall
have the limited discretion to select the option to be used,
provided that such option, when compared to the other option or
options, results in the smallest adjustment to Participant 's
Accounts.<PAGE>
ARTICLE VI
LIMITATIONS AND RESTRICTIONS ON INVESTMENT PLAN
CONTRIBUTIONS AND MATCHING COMPANY CONTRIBUTIONS
6.1 Contribution Percentage Tests. Subject to the
provisions of this Section 6.1, for each Plan Year, the Employer
shall determine, after first applying the provisions of Section
5.3(b), whether the sum of (i) the amounts allocated to each
Participant's Investment Plan Contribution Account attributable
to Investment Plan Contributions [including Tax Reduction
Contributions recharacterized as Investment Plan Contributions
pursuant to Section 5.3(a)] for that Plan Year, (ii) amounts
allocated to each Participant's Matching Company Contribution
Account attributable to Matching Company Contributions (including
Tax Reduction Contributions treated as Matching Company
Contributions pursuant to Section 6.5) for that Plan Year, and
(iii) the amount allocated to each Participant's Tax Reduction
Contribution Account attributable to qualified non-elective
contributions (that are designated under Section 4.3A and/or
Section 4.4 for consideration under this Section 6.1) for that
Plan Year shall satisfy one of the following tests, in addition
to the test set forth in Article VII:
(a) the "Contribution Percentage" for the group consisting
of all eligible Highly Compensated Employees (as defined below)
shall not exceed the "Contribution Percentage" for the group
consisting of all eligible Non-Highly Compensated Employees (as
defined below) multiplied by 1.25; or
(b) the "Contribution Percentage" for the group consisting
of all eligible Highly Compensated Employees shall not exceed the
lesser of (i) 200% of the "Contribution Percentage" for the group
consisting of all eligible Non-Highly Compensated Employees or
(ii) the "Contribution Percentage" for the group consisting of
all eligible Non-Highly Compensated Employees plus two percentage
points or such lesser amount as the Secretary of the Treasury
shall prescribe.
For purposes of this Article VI, the following terms shall
have the following meanings:
(a) "Contribution Percentage" for a Plan Year means, with
respect to the group consisting of the eligible Highly
Compensated Employees and the group consisting of the eligible
Non-Highly Compensated Employees, the average (expressed as a
percentage) of the ratios, calculated separately for each
Employee in each such group, of the sum of (i) the amount of
Investment Plan Contributions allocated to each Investment Plan
Contribution Account for such Plan Year, (ii) the amount of
Matching Company Contributions allocated to each Employee's
Matching Company Contribution Account for such Plan Year, after
reduction for forfeited matching contributions, if any, under
Section 5.3(b) and (iii) the amount allocated to each Employee's
Tax Reduction Contribution Account attributable to qualified non-elective
contributions which are designated under Section 4.3A
and/or Section 4.4 for consideration under this Section 6.1 for
such Plan Year to such Employee's Compensation as defined in
Section 2.13(c) for the Plan Year in which the Employees was an
eligible Highly Compensated Employee or eligible Non-Highly
Compensated Employee.
Applicable to Plan Years beginning prior to January 1, 1997,
for aggregated Family Members treated as a single Highly
Compensated Employee under Section 2.22 as then in effect, the
ratio of the family unit is the greater of (i) the ratio
determined by combining the aggregate Investment Plan
Contributions allocated to each Employee s Investment Plan
Contribution Account for such Plan Year, Matching Company
Contributions allocated to each Employee s Matching Company
Contribution Account for such Plan Year and qualified
non-elective contributions (described above) allocated to his Tax
Reduction Contribution Account for such Plan Year and dividing
such sum by the Compensation for such Plan Year of the Family
Members who are Highly Compensated Employees without family
aggregation or (ii) the ratio determined by combining the
aggregate Investment Plan Contributions allocated to each
Employee s Investment Plan Contribution Account for such Plan
Year, Matching Company Contributions allocated to each Employee's
Matching Company Contribution Account for such Plan Year and
qualified non-elective contributions (described above) allocated
to his Tax Reduction Contribution Account for such Plan Year and
dividing such sum by the Compensation considered in the preceding
sentence for such Plan Year of all aggregated Family Members.
Each Family Member aggregated with a Highly Compensated Employee
for purposes of the preceding sentence shall not be considered a
separate Employee in determining the Contribution Percentage for
either eligible Highly Compensated Employees or eligible
Non-Highly Compensated Employees.
(b) "Actual Contribution Ratio" means each such separately
calculated ratio under paragraph (a) above.
An Employee who is considered a Highly Compensated Employee
under Section 2.22 or a Non-Highly Compensated Employee under
Section 2.35 shall be considered an "eligible Highly Compensated
Employee" or an "eligible Non-Highly Compensated Employee" for
purposes of this Section 6.1 for each Plan Year he is employed by
an Employer if he has satisfied the eligibility requirements of
Article III and reached an Entry Date on which he could have
become a Participant, regardless of whether he elected to have an
Employer make an Investment Plan Contribution to the Plan on his
behalf under Section 4.2 and is eligible to receive an allocation
of an Investment Plan Contribution or a Matching Company
Contribution for that Plan Year. Consequently, for purposes of
this Section 6.1, the Actual Contribution Ratio for each Highly
Compensated Employee and Non-Highly Compensated Employee who is
eligible to, but does not elect to have an Employer make an
Investment Plan Contribution on his behalf to the Plan for a Plan
Year and who does not receive an allocation of a Matching Company
Contribution for the Plan Year, shall be zero for that Plan Year,
unless an Employer makes a qualified non-elective contribution to
the Plan for a Plan Year to satisfy the Contribution Percentage
tests, in which case the Actual Contribution Ratio for each such
Non-Highly Compensated Employee shall be the ratio of that
portion of the qualified non-elective contribution attributable
to contributions made by an Employer to satisfy the Contribution
Percentage tests that is allocated to his Tax Reduction
Contribution Account for the Plan Year to his Compensation as
defined in Section 2.13(c) for the Plan Year.
For purposes of this Section 6.1, if two or more plans of an
Employer to which matching contributions within the meaning of
Section 401(m)(4)(A) of the Code, employee voluntary after-tax
contributions or elective deferrals within the meaning of Section
401(m)(4)(B) of the Code are made are treated as one plan for
purposes of Section 410(b) of the Code [other than the average
benefit test, and excluding allocations under an employee stock
ownership plan described in Section 4975(e)(7) or 409 of the
Code, or the portion of a plan that constitutes an employee stock
ownership plan], such plans shall be treated as one plan for
purposes of this Section 6.1, and, if the plans use different
plan years, the Committee shall determine such combined
contributions and the Actual Contribution Ratios of Highly
Compensated Employees eligible to participate in the Plan on the
basis of the plan years ending in the same calendar year. The
Committee shall maintain records to demonstrate compliance with
the tests under this Section 6.1, including the extent to which
the Plan used qualified non-elective contributions pursuant to
Section 4.3A and/or Section 4.4 to satisfy a test. In addition,
if any Employee who is an eligible Highly Compensated Employee
participates in two or more plans described in Section 401(a) of
the Code that are maintained by an Affiliated Company to which
such contributions are made, all such contributions shall be
aggregated for purposes of this Section 6.1 to the extent
required under Section 401(m) of the Code.
6.2 Adjustments Required to Satisfy a Contribution
Percentage Test. If Investment Plan Contributions and Matching
Company Contributions made for any Plan Year do not satisfy one
of the tests set forth in Section 6.1, the excess amount that
would result in a test being satisfied for the Plan Year if it
had not been made to the Plan shall be referred to as an "Excess
Aggregate Contribution" and the Committee shall, in its sole and
absolute discretion and notwithstanding any other provision
hereof, make appropriate adjustments in accordance with Sections
401(a)(4) and 401(m) the Code (and Treasury regulations
thereunder) pursuant to one or more of the following provisions
in the following order, provided that adjustments under
subsection (c) may be made without any adjustments first being
made under subsections (a) or (b):
(a) Any Investment Plan Contributions made by Highly
Compensated Employees during the Plan Year that are not matched
by Matching Company Contributions in accordance with Section 4.3
(plus any income and minus any loss attributable thereto) shall
be distributed (according to the method specified in this Section
6.2 below) to the Highly Compensated Employees to whose
Investment Plan Contribution Accounts all or a portion of Excess
Aggregate Contribution was made within 2-1/2 months following the
close of the Plan Year, if administratively possible, and within
12 months after the close of such Plan Year, at the latest until
either (i) the limits of Section 6.1 are satisfied or (ii) all
such contributions are distributed.
(b) To the extent that the portion of the Excess Aggregate
Contribution for the Plan Year is allocable to a Matching Company
Contribution and Investment Plan Contributions that are matched
in accordance with Section 4.3, the Committee shall eliminate the
Excess Aggregate Contribution by alternately applying paragraphs
(i) and (ii) below [beginning with paragraph (i)], on a pro rata
basis.
(i) If the Matching Company Contribution is fully
vested, such vested portion, plus any income and minus
any loss attributable thereto, shall be distributed to
the applicable Highly Compensated Employees within
2-1/2-months following the close of that Plan Year, if
administratively possible, and within 12 months after
the close of such Plan Year, at the latest, and if such
Matching Company Contribution is not fully vested,
within 2-1/2 months following the close of that Plan
Year, if administratively possible, and within
12-months after the close of such Plan Year, at the
latest, (A) the non-vested portion of such Matching
Company Contribution, plus any income and minus any
loss attributable thereto, shall be forfeited from the
Matching Company Contribution Accounts of the
applicable Highly Compensated Employees at the time the
Excess Aggregate Contribution is distributed and the
forfeitures shall be applied as set forth in Section
11.12 and (B) the vested portion of such Matching
Company Contribution, plus any income and minus any
loss attributable thereto, shall be distributed to the
applicable Highly Compensated Employees.
(ii) Any Investment Plan Contributions that were
matched or would have been matched but for the
application of this Section 6.2 (plus any income and
minus any loss attributable thereto) shall be
distributed (according to the method specified in this
Section 6.2 below) to the applicable Highly Compensated
Employees, within 2-1/2 months following the close of
that Plan Year, if administratively possible, and
within 12 months after the close of such Plan Year, at
the latest.
(c) Within the time prescribed by law to enable an Employer
to obtain a deduction for a contribution on its federal income
tax return for the Plan Year for which an Excess Aggregate
Contribution was made, the Employer shall, if the conditions
applicable to qualified non-elective contributions under final
Treasury Regulations issued by the Secretary of the Treasury are
satisfied make a qualified non-elective contribution pursuant to
Section 4.3A and/or Section 4.4 on behalf of the eligible
Non-Highly Compensated Employees (as defined in Section 6.1) who
meet the requirements of Section 4.4 in an amount sufficient to
satisfy one of the tests set forth in Section 6.1 before or after
the application of subsections (a) and/or (b) above].
With respect to Plan Years beginning before January 1, 1997,
the amount of the Excess Aggregate Contributions to be
distributed or forfeited pursuant to subsections (a) and (b)
hereof shall be determined by a leveling method under which the
Actual Contribution Ratio of the Highly Compensated Employee with
the highest Actual Contribution Ratio is reduced to the extent
required (i) to enable the Plan to satisfy one of the
Contribution Percentage tests set forth in Section 6.1 or (ii) to
cause such Highly Compensated Employee's Actual Contribution
Ratio to equal the Actual Contribution Ratio of the Highly
Compensated Employee with the next highest Actual Contribution
Ratio. This procedure shall be repeated until the Plan satisfies
one of the Contribution Percentage tests set forth in Section
6.1. Once the Plan satisfies one of the Contribution Percentage
tests, the amount of the Excess Aggregate Contributions for each
such Highly Compensated Employee who had his Actual Contribution
Ratio reduced under the preceding sentences shall be determined
for each such Employee by subtracting from the total Investment
Plan Contributions and Matching Company Contributions made on his
behalf (without regard to this Section 6.2) the product of such
Employee's Actual Contribution Ratio (as reduced under this
Section 6.2) and his Compensation.
With respect to Plan Years beginning on and after January 1,
1997, the amount of Excess Aggregate Contributions to be
distributed pursuant to subsections (a) and (b) hereof shall be
determined by first determining the total dollar amount of Excess
Aggregate Contributions which must be reduced to satisfy the
limitation and by allocating these amounts, in accordance with
guidance provided by the Secretary of the Treasury or his
delegate, to the Highly Compensated Employees on behalf of whom
the largest aggregate dollar amounts of Investment Plan
Contributions and Matching Company Contributions (and qualified
non-elective contributions that are considered under Section 6.1)
have been made to the Plan for the given Plan Year.
Applicable to Plan Years beginning prior to January 1, 1997,
Excess Aggregate Contributions of each Highly Compensated
Employee subject to the Family Member aggregation rules of
Section 2.22 as then in effect shall be allocated among the
Highly Compensated Employee and his aggregated Family Members in
proportion to the Investment Plan Contributions and Matching
Company Contributions (and qualified non-elective contributions
that are considered under Section 6.1) of the Highly Compensated
Employee and each such Family Member aggregated with him to
determine the combined Actual Contribution Ratio.
The income or loss attributable to the portion of the Excess
Aggregate Contributions for a Plan Year that are to be
distributed to a Highly Compensated Employee or forfeited from
his Account shall be determined by multiplying the amount of the
income or loss allocable to the Participant's Matching Company
Contribution Account and his Investment Plan Contribution Account
for the Plan Year by a fraction, the numerator of which is the
portion of the Excess Aggregate Contributions for the Plan Year
that are to be distributed to that Participant and the
denominator of which is the balance of the Participant's Matching
Company Contribution Account and Investment Plan Contribution
Account on the last day of the Plan Year after adjustment as of
such date under Section 9.4.
In adjusting a Participant's Excess Aggregate Contributions
for the income or loss attributable to such excess contributions,
the income or loss attributable to such excess contributions for
the "gap period" shall not be considered. For purposes of this
Section 6.2, "gap period" shall mean the period beginning with
the first day of the Plan Year next following the Plan Year for
which the Excess Aggregate Contributions were made on behalf of
the Participant and ending on the date of the distribution.
6.3 Procedures Applicable to Tax Reduction Contributions
Recharacterized As Investment Plan Contributions. The
determination of the amount of Excess Aggregate Contributions
with respect to a Plan Year shall be made after determining the
Excess Contributions, if any, to be treated as Investment Plan
Contributions due to recharacterization pursuant to Section
5.3(a). The income allocable to Excess Aggregate Contributions
resulting from the recharacterization of Tax Reduction
Contributions shall be determined and distributed as if such
recharacterized Tax Reduction Contributions had been distributed
pursuant to Section 5.3(b) instead of recharacterized pursuant to
Section 5.3(a).
6.4 Additional Adjustments and Prospective Reductions of
Investment Plan Contributions. In the event that it is
determined at any time prior to or within a Plan Year that the
Contribution Percentage tests of Section 6.1 hereof could be
exceeded with respect to such Plan Year, the Committee, in its
sole and absolute discretion, may make such adjustments,
reductions or suspensions to Investment Plan Contribution rates
of Highly Compensated Participants at such times and in such
amounts as the Committee shall reasonably deem necessary,
including prospective reductions of Investment Plan Contributions
at any time prior to or within a Plan Year. The Committee shall
make such adjustments, reductions or suspensions based upon
periodic reviews of the Investment Plan Contribution rates of
Highly Compensated Participants during the Plan Year and may make
such adjustments, reductions or suspensions in any amount
notwithstanding any other provisions hereof. In addition, the
Committee shall take any other action to assure compliance with
the Contribution Percentage tests as shall be prescribed by the
Secretary of the Treasury. If the Investment Plan Contributions
of Highly Compensated Participants are reduced, the amount of
such reduction shall be determined by (i) reducing the maximum
allowable Investment Plan Contributions under Section 4.2 to such
percentage which will, when applied to all Highly Compensated
Participants (and taking into account any reduction in Matching
Company Contributions as a consequence of a reduction in Tax
Reduction Contributions under Section 5.5 and a reduction in
Investment Plan Contributions hereunder) result in the maximum
contribution percentage set forth in Section 6.1 not being
exceeded, and (ii) reducing accordingly the Investment Plan
Contributions that may be made in the remainder of the Plan Year
in the case of each Highly Compensated Participant with respect
to whom such reduced maximum percentage is exceeded.
Notwithstanding the foregoing, the Committee may round off or
estimate the prospective reductions hereunder. Once a reduction
has been made hereunder, it shall remain in effect unless the
Committee determines that it is no longer necessary in order for
the maximum contribution percentage to be met.
6.5 Testing of Tax Reduction Contributions Under
Contribution Percentage Test. Notwithstanding the foregoing
provisions of this Article VI or of Article V, all or a portion
of the Tax Reduction Contributions made on behalf of eligible
Non-Highly Compensated Employees may be treated as Matching
Company Contributions made on behalf of such eligible Non-Highly
Compensated Employees for the purpose of meeting the Contribution
Percentage test set forth in Section 6.1, provided that the
Actual Deferral Percentage test of Section 5.2 can be met, both
when the Tax Reduction Contributions treated as Matching Company
Contributions hereunder are included in performing such Actual
Deferral Percentage test and when such Tax Reduction
Contributions are excluded in performing such Actual Deferral
Percentage test. Except for purposes of meeting the Contribution
Percentage test of Section 6.1 to the extent described hereunder,
any such Tax Reduction Contributions shall continue to be treated
as Tax Reduction Contributions for all other purposes of the
Plan.
6.6 Other Permissible Methods of Testing and Corrections.
The provisions of this Article VI are intended to conform with
Section 401(m) of the Code. In the event that the Committee
determines, based on changes to the Code or interpretations or
guidance issued by the Internal Revenue Service, that the
requirements of such Code section may be applied in a manner
different from that prescribed in this Article VI, the Committee
may make appropriate adjustments to the administration of the
Plan to incorporate such changes to the Code or interpretations
or guidance. If a change to the Code or interpretations or
guidance issued by the Internal Revenue Service results in more
than one additional option in the manner in which this Article VI
may be administered, the Committee shall have the limited
discretion to select the option to be used, provided that such
option, when compared to the other option or options, results in
the smallest adjustment to Participant's Accounts.
ARTICLE VII
AGGREGATE LIMIT ON ACTUAL DEFERRAL
AND CONTRIBUTION PERCENTAGES
7.1 General Rules. If at least one Highly Compensated
Employee is included in the Actual Deferral Percentage test under
Section 5.2 and in the Contribution Percentage test under Section
6.1, in addition to satisfaction of the Actual Deferral
Percentage test and the Contribution Percentage test, the sum of
the Highly Compensated Group's Actual Deferral Percentage under
Section 5.2 and Contribution Percentage under Section 6.1 may not
exceed the aggregate limit (the "multiple use limitation") of
this Article VII. The multiple use limitation of this Article
VII does not apply, however, unless prior to the application of
the multiple use limitation, the Actual Deferral Percentage and
the Contribution Percentage of the Highly Compensated Group each
exceeds 125% of the respective percentages for the Non-Highly
Compensated Group.
7.2 Multiple Use Limitation. The multiple use limitation
is the greater of:
(a) the sum of (i) and (ii), where:
(i) is 1.25 times the greater of:
(A) the Actual Deferral Percentage of the
Non-Highly Compensated Group under Section
5.2 for the Plan Year; or
(B) the Contribution Percentage of the Non-Highly
Compensated Group under Section 6.1 for the
Plan Year; and
(ii) is equal to two percentage points plus the lesser
of the percentage in subsection (i)(A) or (i)(B) above,
but not more than twice the lesser of the percentage in
subsection (i)(A)or (i)(B); or
(b) the sum of (i) and (ii), where:
(i) is equal to 1.25 times the lesser of:
(A) the Actual Deferral Percentage of the
Non-Highly Compensated Group under Section
5.2 for the Plan Year; or
(B) the Contribution Percentage of the Non-Highly
Compensated Group under Section 6.1 for the
Plan Year; and
(ii) is equal to two percentage points plus the greater
of the percentage in subsection (i)(A) or (i)(B) above,
but not more than twice the greater of the percentage
in subsection (i)(A) or (i)(B).
The Committee shall determine whether the Plan satisfies the
multiple use limitation after applying the Actual Deferral
Percentage test under Section 5.2 and the Contribution Percentage
test under Section 6.1 and after any corrective distributions,
the use of qualified non-elective contributions, any
recharacterization of Excess Contributions, or any other
adjustments required or permitted by Articles V and VI. If after
applying this Section 7.2, the Committee determines that the Plan
has failed to satisfy the multiple use limitation, the Committee
will correct the failure (i) for Plan Years beginning before
January 1, 1994, by alternately reducing the Investment Plan
Contributions and the Tax Reduction Contributions of Highly
Compensated Employees in whole percentages (or fractional
percentages, if applicable) to the extent necessary to satisfy
the multiple use limitation and (ii) for Plan Years beginning on
and after January 1, 1994, by treating the excess amount as
Excess Aggregate Contributions under Section 6.2. For purposes
of this Article VII, "Highly Compensated Group" and "Non-Highly
Compensated Group" mean the group of Employees who are eligible
Highly Compensated Employees and eligible Non-Highly Compensated
Employees, respectively, for the year as defined in Sections 5.2
and 6.1.
7.3 Prospective Reduction of Contributions. In the event
that it is determined by the Committee at any time prior to or
within a Plan Year that the aggregate limit prescribed in Section
7.2 could be exceeded with respect to such Plan Year, then the
amount of Tax Reduction Contributions, Investment Plan
Contributions or both (as determined by the Committee in its sole
and absolute discretion) made on behalf of Participants who are
Highly Compensated Employees may be reduced in a manner similar
to the procedures described in Sections 5.5 and 6.4.
ARTICLE VIII
LIMITATION ON ALLOCATIONS
8.1 Limitation on Allocations. Notwithstanding any other
provision of the Plan, the following provisions shall be
applicable to the Plan:
(a) If this Plan is the only plan maintained by an Employer
that covers the class of Employees eligible to participate
hereunder and the Participant does not participate in and has
never participated in a Related Plan or a welfare benefit fund,
as defined in Section 419(e) of the Code, maintained by the
Employer, or an individual medical account, as defined in
Section 415(1)(2)of the Code, maintained by the Employer, which
provides an Annual Addition as defined in Section 8.2(a), the
Annual Additions that may be allocated under this Plan to a
Participant's Account for a Limitation Year shall not exceed the
lesser of:
(i) the Maximum Permissible Amount; or
(ii) any other limitation contained in this Plan.
(b) If an Employer maintains, in addition to this Plan, (i)
Related Plan that covers the same class of Employees eligible to
participate hereunder, (ii) a welfare benefit fund, as defined in
Section 419(e) of the Code, or (iii) an individual medical
account as defined in Section 415(1)(2) of the Code, which
provides an Annual Addition, the Annual Additions that may be
allocated under this Plan to a Participant's Account for a
Limitation Year shall not exceed the lesser of:
(A) the Maximum Permissible Amount, reduced by the sum
of any Annual Additions allocated to the Participant s
accounts for the same Limitation Year under this Plan
and such other Related Plan and the welfare plans
described in clauses (ii) and (iii) above; or
(B) any other limitation contained in this Plan.
8.2 Definitions. For purposes of this Article VIII, the
following terms shall have the meanings set forth below:
(a) "Annual Additions" means the sum of the following
amounts allocated to a Participant's Account for a Limitation
Year:
(i) all Employer contributions/ including contribution
described in Sections 4.1, 4.3, 4.3A and 4.4, and
forfeitures treated as Matching Company Contributions
or TRIP+ Contributions);
(ii) all forfeitures;
(iii) all Employee contributions (including
contributions described in Section 4.2); and
(iv) amounts described in Sections 415(1)(1) and
419A(d)(2) of the Code.
In addition, Annual Additions shall include Excess Elective
Deferrals under Section 5.1 that are not distributed to the
Participant before April 15 following the taxable year of
deferral, Excess Contributions within the meaning of Section 5.3
and Excess Aggregate Contributions within the meaning of Section
6.2.
For purposes of this Article VIII, Employee contributions
shall be determined without regard to any (i) rollover
contributions within the meaning of Section 402(a)(5), 403(a)(4)
or 408(d)(3) of the Code [or, on or after January 1, 1993, an
eligible rollover contribution as described in Section 402(c)(4)
of the Code], (ii) contribution by the Employee to a simplified
employee pension, (iii) contribution to an individual retirement
account or individual retirement annuity, (iv) repayments of
loans made to the Participant from the Plan and (v) direct
transfers of Employee contributions from a plan described in
Section 401(a) of the Code to the Plan.
(b) "Maximum Permissible Amount" means for a Limitation
Year with respect to any Participant the lesser of:
(i) $30,000 [or, if greater, one-fourth of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code as it may be adjusted under Section 415(d)(1) of
the Code by the Secretary of the Treasury for the
Limitation Year]; or
(ii) 25% of the Participant's Compensation for the
Limitation Year.
(c) "Excess Amount" means the excess of the Annual
Additions allocated to a Participant's Account for the Limitation
Year over the Maximum Permissible Amount, less administrative
charges allocable to such excess.
(d) "Employer" means for purposes of this Article VIII, any
Employer and any Affiliated Company that adopts this Plan
provided, however, the determination under Sections 414(b) and
(c) of the Code shall be made as if the phrase "more than 50
percent" were substituted for the phrase "at least 80 percent"
each place it is incorporated into Sections 414(b) and (c) of the
Code.
(e) "Related Plan" means any other defined contribution
plan [as defined in Section 415(k) of the Code] maintained by any
Employer as defined in subparagraph (d) above.
(f) "Defined Contribution Plan Fraction" means for any
Limitation Year:
(i) the sum of the Annual Additions to the
Participants Account under this Plan and his accounts
under any Related Plan and welfare plans [as described
in Section 8.1(b)(ii) and (iii)] as of the close of the
Limitation Year, divided by:
(ii) the sum of the lesser of the following amounts
determined for the Limitation Year and for each prior
year of his service for an Employer:
(A) the product of 1.25, multiplied by the dollar
limitation in effect under Section
415(c)(1)(A) of the Code for the Limitation
Year [determined without regard to Section
415(c)(6) of the Code], or
(B) the product of 1.4, multiplied by an amount
equal to 25% of the Participant's
Compensation for the Limitation Year.
If the Plan satisfied the applicable requirements of Section
415 of the Code as in effect for all Plan Years beginning before
January 1, 1987, an amount shall be subtracted from the numerator
of the Defined Contribution Plan Fraction (not exceeding such
numerator) as prescribed by the Secretary of Treasury so that the
sum of the Defined Benefit Plan Fraction and Defined Contribution
Plan Fraction computed under Section 415(e)(1) of the Code (as
revised by this Article VIII) does not exceed 1.0 for such Plan
Year.
(g) "Defined Benefit Plan Fraction" means for any
Limitation Year:
(i) the projected Annual Benefit of the Participant
under the defined benefit plans maintained by an
Employer determined as of the close of the Limitation
Year divided by:
(ii) the lesser of:
(A) the product of 1.25, multiplied by the dollar
limitation in effect under Section
415(b)(1)(A) of the Code for the Limitation
Year, or
(B) the product of 1.4, multiplied by 100% of the
Participant's Average Compensation.
If the Employee 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 an Employer which
were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125% 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
plans after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(h) "Average Compensation" means the average Compensation
during a Participant's high three years of service, which period
is the three consecutive calendar years (or, the actual number of
consecutive years of employment for those Employees who are
employed for less than three consecutive years with an Employer)
during which the Employee had the greatest aggregate Annual
Compensation from the Employer, including any adjustments under
Section 415(d) of the Code.
(i) "Annual Benefit" means a benefit payable annually in
the form of a straight life annuity (with no ancillary benefits)
under a plan to which Employees do not contribute and under which
no Rollover Contributions are made.
(j) "Compensation" means compensation as defined in Section
2.13(c).
8.3 Excess Annual Additions. In the event that, notwith-
standing Section 8.5(a) hereof, the limitations with respect to
Annual Additions prescribed hereunder are exceeded with respect
to any Participant for a Limitation Year and such excess arises
as a result of the allocation of forfeitures, a reasonable error
in estimating a Participant's Compensation for the Plan Year, a
reasonable error in determining the amount of Tax Reduction
Contributions that may be made by a Participant under the limits
of Section 415 of the Code, or as a result of other facts and
circumstances as established by the Commissioner of the Internal
Revenue Service, the Excess Amounts shall not be deemed Annual
Additions in that Limitation Year, to the extent such Excess
Amounts are treated in accordance with any of the following:
(a) Either Tax Reduction Contributions or Investment Plan
Contributions, or both, and earnings thereon shall be distributed
to the Participant to the extent necessary to reduce the Excess
Amount as soon as practicable after the close of the Plan Year.
The amounts distributed are disregarded for purposes of applying
Code Section 402(g) and the tests set forth in Sections 5.2 and
6.1.
(b) The Excess Amounts in the Participant's Account are
allocated and reallocated to other Participants in the Plan.
However, if the allocation or reallocation of the Excess Amounts
pursuant to the provisions of the Plan causes the limitations of
Section 415 to be exceeded with respect to each Plan Participant
for the Limitation Year, then these amounts must be held
unallocated in a suspense account. If a suspense account in
existence at any time during a particular Limitation Year, other
than the Limitation Year described in the preceding sentence, all
amounts in the suspense account must be allocated and reallocated
to Participants' Accounts (subject to the limitation of Code
Section 415) before any Employer contributions and Employee
contributions that would constitute Annual Additions may be made
to the Plan for that Limitation Year.
(c) The Excess Amounts in the Participant's Account are
used to reduce Employer contributions for the next Limitation
Year (and succeeding Limitation Years, as necessary) for that
Participant if that Participant is covered by the Plan as of the
of the Limitation Year. However, if that Participant is not
covered by the Plan as of the end of the Limitation Year, then
the Excess Amounts must be held unallocated in a suspense account
for the Limitation Year and allocated and reallocated in the next
Limitation Year to all of the remaining Participants in the Plan
in accordance with the rules set forth in Section 8.3(b).
Furthermore, the Excess Amounts must be used to reduce Employer
contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for all of the remaining
Participants in the Plan.
8.4 Combined Plan Limits.
(a) If an Employer maintains, or has ever maintained, one
or more defined benefit plans covering an Employee who is also a
Participant in this Plan, the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction, cannot
exceed 1.0 for any Limitation Year beginning prior to January 1,
2000. The Annual Addition for any Limitation Year beginning
before January 1, 1987 shall not be recomputed to treat all
Employee contributions as an Annual Addition. If the Plan
satisfied the applicable requirements of Section 415 of the Code
as in effect for all Limitation Years beginning before January 1,
1987, an amount shall be subtracted from the numerator of the
Defined Contribution Plan Fraction (not exceeding such numerator)
as prescribed by the Secretary of Treasury so that the sum of the
Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction computed under Section 415(e)(1) of the Code [as revised
by this Section 8.4] does not exceed 1.0 for such Limitation
Year. The combined plan limitations set forth in this Section
8.4 shall be inapplicable for Limitation Years beginning on and
after January 1, 2000.
(b) For the purpose of this Section 8.4, Employee
contributions to a defined benefit plan are treated as a separate
defined contribution plan. In addition, any contributions paid
or accrued after December 31, 1985 that are attributable to
medical benefits allocated under a welfare benefit fund [as
defined in Section 419(e) of the Code] during Limitation Years
ending after December 31, 1985 to a separate account established
for any is postretirement medical benefits provided with respect
to a Participant, who, at any time, during the Limitation Year or
any preceding Limitation Year, is or was a Key Employee, shall be
treated as Annual Additions to a defined contribution plan
Further, all defined contribution plans of an Employer are to be
treated as one defined contribution plan and all defined benefit
plans of an Employer are to be treated as one defined benefit
plan, whether or not such plans have been terminated.
(c) If the sum of the Defined Contribution Plan Fraction
and the Defined Benefit Plan Fraction exceeds 1.0, the sum of the
fractions will be reduced to 1.0 as follows:
(i) voluntary nondeductible Employee contributions
made by a Participant to the defined benefit plan that
constitute an Annual Addition to a defined contribution
plan, to the extent they would reduce the sum of the
fractions to 1.0, will be returned to the Participant;
(ii) if additional reductions are required for the sum
of the fractions to equal 1.0, Investment Plan
Contributions made by a Participant to this Plan which
constitute an Annual Addition to this Plan, to the
extent they would reduce the sum of the fractions to
1.0, will be returned to the Participant;
(iii) if additional reductions are required for the
sum of the fractions to equal 1.0, the Annual Benefit
of a Participant under the defined benefit plan will be
reduced (but not below zero and not below the amount of
the Participant's accrued benefit to date) to the
extent necessary to prevent the sum of the fractions,
computed as of the close of the Limitation Year from
exceeding 1.0; and
(iv) if additional reductions are required for the sum
of the fractions to equal 1.0, the reductions will then
be made to the Annual Additions of this Plan.
8.5 Special Rules
(a) Notwithstanding any other provision of this Article
VIII, an Employer shall not contribute any amount that would
cause an allocation to the suspense account as of the date the
contribution is allocated. In the event the making of any
Investment Plan Contribution, Tax Reduction Contribution,
Matching Company Contribution or TRIP+ Contribution, or any part
thereof, would result in the limitation set forth in this Article
VIII being exceeded, the Committee shall cause such contributions
not to be made. If the contribution is made prior to the date as
of which it is to be allocated, then such contribution shall not
exceed an amount that would cause an allocation to the suspense
account if the date of the contribution were an Allocation Date.
The Committee shall maintain records, showing the contributions
to be allocated to the Account of each Participant in any
Limitation Year. In the event that it is determined prior to or
within any Limitation Year that the foregoing limitations would
be exceeded if the full amount of contributions otherwise
allocable would be allocated, the Annual Additions to this Plan
for the remainder of the Limitation Year shall be adjusted by
reducing (i) first, any unmatched Investment Plan Contributions,
(ii) second, any unmatched Tax Reduction Contributions, (iii)
third, matched Investment Plan Contributions and a corresponding
share of Matching Company Contributions (iv) fourth, matched Tax
Reduction Contributions and a corresponding share of Matching
Company Contributions and (v) fifth, TRIP+ Contributions but, in
each case, only to the extent necessary to satisfy the
limitations.
(b) If the Annual Additions with respect to the Participant
under other Related Plans and welfare plans described in Section
8.1(b)(ii) and (iii) are less than the Maximum Permissible amount
and the Matching Company Contribution that otherwise would be
contributed or allocated to the Participant's Account under this
Plan would cause the Annual Additions for the Limitation Year to
exceed the limitation of Section 8.1(b), the amount contributed
or allocated will be reduced so that the Annual Additions under
all such plans for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under the Related Plans and welfare plans described
in Section 8.1(b)(ii) and (iii) in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Account under this
Plan for the Limitation Year. If a Participant's Annual
Additions under this Plan and all Related Plans result in an
Excess Amount, such Excess Amount shall be deemed to consist of
the amounts last allocated, except that Annual Additions
attributable to a welfare plan described in Section 8.1(b)(ii) or
(iii) will be deemed to have been allocated first regardless of
the actual allocation date.
(c) If an Excess Amount was allocated to a Participant on
an allocation date of a Related Plan, the Excess Amount
attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date
[including any amount that would have been allocated
but for the limitations of Section 8.1(b)], multiplied
by:
(ii) the ratio of:
(A) the amount allocated to the Participant as of
such date under this Plan, divided by:
(B) the total amount allocated as of such date
under this Plan and all Related Plans
[determined without regard to Section
8.1(b)].
(d) Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Maximum Permissible
Amount may be determined on the basis of the Participant's
estimated Compensation for such Limitation Year. Such estimated
Compensation shall be determined on a reasonable basis and shall
be uniformly determined for all Participants similarly situated.
Any Employer contributions (including allocation of forfeitures)
based on estimated Compensation shall be reduced by any Excess
Amounts carried over from prior Years.
(e) As soon as is administratively feasible after the end
for the Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant s actual Compensation for such Limitation Year. <PAGE>
ARTICLE IX
PARTICIPANT'S ACCOUNTS
9.1 Establishment of Accounts. The Recordkeeper shall
establish and maintain a separate account as a record of each
Participant s and Former Participant's interest in the Trust Fund
with respect to each Account in which a Participant or Former
Participant has an interest, including, as appropriate,
subaccounts for the Participant's Tax Reduction Contributions,
his Investment Plan Contributions, his Matching Company
Contributions, his TRIP+ Contributions and his Rollover
Contributions. Subject to the remaining provisions of this
Article IX, within each such Account, one or more subaccounts
shall be maintained to reflect the Participant s investment
elections among the Investment Funds.
9.2 Allocation of Contributions to Participant s Accounts.
Subject to the limitations of Article VIII, contributions shall
be allocated to the Accounts of Participants as follows:
(a) As of each Allocation Date, but after adjustment of
each Participant's Accounts as provided in Section 9.4, each
Participant's Tax Reduction Contributions and Investment Plan
Contributions deposited with the Trustee since the last
Allocation Date shall be allocated, as applicable, to the
Participant's Tax Reduction Contribution Account and Investment
Plan Contribution Account in the amount by which the Participant
has elected, in accordance with Sections 4.1 and 4.2, to defer
and/or to contribute a portion of his Compensation to the Plan
during the period since the last Allocation Date; provided,
however, that the amount allocated to the Tax Reduction
Contribution Account and the Investment Plan Contribution Account
of a Highly Compensated Employee for a Plan Year shall be subject
to the limitations of Sections 5.1, 5.2 and 6.1.
(b) As of each Allocation Date, but after adjustment of
each Participant s Accounts as provided in Section 9.4, each
Participant's Rollover Contributions deposited with the Trustee
since the last Allocation Date shall be allocated to the
Participant s Rollover Account.
(c) As of each Allocation Date ending on the last day of a
calendar quarter, but after adjustment of each Participant s
Accounts as provided in Section 9.4, Matching Company
Contributions made on behalf of a Participant who has authorized
Tax Reduction Contributions and/or Investment Plan Contributions
for the period since the last Allocation Date shall be allocated
to such Participant s Matching Company Contribution Account in an
amount equal to the percentage of such Participant's Tax
Reduction Contributions and/or Investment Plan Contributions
specified for that Plan Year by the Board of Directors; provided,
however, that the amount allocated to the Matching Company
Contribution Account of a Highly Compensated Employee for a Plan
Year shall be subject to the limitations of Section 6.1 and
Article VII. Notwithstanding the preceding sentence, a
Participant who makes an election to receive an early
distribution under Section 11.3(d) in connection with his
termination of employment shall not receive an allocation of a
Matching Company Contribution for the quarterly Allocation Date
following his termination of employment.
(d) As of the last day of each Plan Year, but after
adjustment of Participant's Accounts as provided in Section 9.4,
if an Employer made qualified non-elective contributions for a
Plan Year under Section 4.4 on behalf of Participants who are
Non-Highly Compensated Employees in order to insure that one of
the Actual Deferral Percentage tests described in Section 5.2 are
met for such Plan Year or that one of the Contribution Percentage
test described in Section 6.1 are met for such Plan Year, such
qualified elective contributions shall be allocated to the Tax
Reduction Contribution Account of each Non-Highly Compensated
Employee eligible to participate in such contribution pursuant to
Section 4.4 in the ratio that such Employee's Compensation for
the Plan Year bears to the Compensation for such Plan Year of all
Employees eligible to participate in such contribution.
Notwithstanding the preceding sentence, for any Plan Year, the
Company may designate a specific dollar amount to be allocated as
a qualified non-elective contribution to the Tax Reduction
Contribution Account of each Non-Highly Compensated Employee
eligible to participate in such contribution pursuant to Section
4.4 for such Plan Year.
(e) As of each Allocation Date ending on the last day of a
calendar quarter, but after adjustment of each Participant s
Accounts as provided in Section 9.4, TRIP+ Contributions made on
behalf of a Participant under Section 4.3A since the last
Allocation Date shall be allocated to such Participant s TRIP+
Contribution Account in an amount equal to the percentage of the
Participant s Compensation described in Section 4.3A.
Notwithstanding the preceding sentence, a Participant who makes
an election to receive an early distribution under Section
11.3(d) in connection with his termination of employment shall
not receive an allocation of a TRIP+ Contribution for the
quarterly Allocation Date following his termination of
employment.
9.3 Trust Fund Valuation. The value of each Investment
Fund and of the Trust Fund shall be determined by the Trustee as
of the close of business on each Valuation Date, or as soon
thereafter as practicable, and shall be the fair market value of
all securities or other property held in the Investment Funds,
plus cash and the fair market value of any other assets held by
the Trust Fund, with equitable adjustments for pending trades.
While it is contemplated that the Trust Fund will be valued
by the Trustee and allocations made only on the Valuation Date,
should it be necessary to make distributions under the provisions
hereof, and the Committee, in good faith determines that, because
of (i) an extraordinary change in general economic conditions,
(ii) the occurrence of some casualty materially affecting the
value of the Trust Fund or a substantial part thereof, or (iii) a
significant fluctuation in the value of the Trust Fund has
occurred since the immediately preceding Allocation Date, the
Committee may, in it sole discretion, to prevent the payee from
receiving a substantially greater or lesser amount than what he
would been titled to, based on current values, cause a
reevaluation of the Trust Fund to be made and a reallocation of
the interests therein as of the date the payee's right of
distribution becomes fixed. The Committee's determination to
make such special valuation and the valuation of the Trust Fund
as determined by the Trustee shall be conclusive and binding on
all persons ever interested thereunder.
If the Committee in good faith determines that certain
expenses of administration paid by the Trustee during the Plan
Year under consideration are not general, ordinary, and usual and
should not equitably be borne by all Participants, but should be
borne only by one or more Participants, for whom or because of
whom such specific expenses were incurred, the net earnings and
adjustments in value of the Accounts shall be increased by the
amounts of such expenses, and the Committee shall make suitable
adjustments by debiting the particular Account or Accounts of
such one or more Participants, Former Participants, or
Beneficiaries; provided, however, that any such adjustment must
be nondiscriminatory and consistent with the provisions of
Section 401(a) of the Code.
9.4 Adjustments to Participant's Accounts. Each Investment
Fund shall be valued at fair market value as of the close of
business on each Valuation Date. As of such Valuation Date, each
Participant's interest in an Investment Fund shall be adjusted
for the net earnings, losses, appreciation and depreciation in
such Investment Fund since the immediately preceding Valuation
Date. The portion of the total net earnings, losses,
appreciation or depreciation of an Investment Fund allocated to a
Participant's interest in such Investment Fund shall be the same
ratio that the value of the Participant's interest in such
Investment Fund as of the immediately preceding Valuation Date
bears to the total value of all Participants' interests in such
Investment Fund as of the preceding Valuation Date; provided,
however, that for this purpose, the value of a Participant's
interest as of the preceding Valuation Date shall be increased by
any transfers to the Investment Fund from another Investment Fund
during the period for which the valuation is being made and shall
be decreased by any loans, withdrawals or other distribution to
the Participant paid to the Participant during the period for
which the valuation being made; provided, however, that for
purposes of Section 11.2, distributions other than loans and
withdrawals shall not be taken into account. All contributions
and loan repayments shall be credited as of the last day of the
month during which such contributions and loan repayments are
made and shall not be credited until the foregoing adjustments
for earnings, losses, appreciation and depreciation have been
made.
9.5 Participant-Directed Investments.
(a) Investment Funds. All contributions to the Trust that
are allocated to the Tax Reduction Contribution Account,
Investment Plan Account, Rollover Account (and, effective prior
to June 30, 1997, Matching Company Contribution Account and TRIP+
Contribution Account) of each Participant, Former Participant or
Beneficiary shall be invested in one or more of the Investment
Funds (other than the Household International, Inc. Common Stock
Fund and any other Investment Fund designated by the Committee
from time to time as a Fund in which additional participation is
frozen) as directed by the Participant, Former Participant or
Beneficiary by Notice to the Committee or to the Recordkeeper (in
the form and manner prescribed by the Committee) in the minimum
percentages set forth in Section 9.5(d) or in such other minimum
percentages or amounts as may be prescribed by the Committee from
time to time. The Committee may change the Investment Funds set
forth in Section 2.25 at such time as it may determine in its
sole and absolute discretion; provided, however, that the
Committee shall maintain, at a minimum, and in addition to the
Zurn Stock Fund and/or the U.S. Industries Stock Fund, at least
three investment funds representing a former broad range of
investment alternatives which provide Participants, Former
Participants and Beneficiaries with a reasonable opportunity to
materially affect the potential return on amounts in their
Accounts.
(b) Funding Arrangements. The Committee may use registered
mutual funds, bank-maintained collective investment funds or
similar arrangements as funding vehicles for the Investment
Funds, provided that the underlying investments of any such
arrangement are consistent with the investment objectives of the
particular Investment Fund, as established by the Committee. The
Committee, in its sole and absolute discretion, may at any time
establish new Investment Funds or discontinue existing Investment
Funds and may at any time increase or decrease the number of
Investment Funds that are offered to Participants, Former
Participants and Beneficiaries under the Plan.
(c) Loan Repayments. A loan to a Participant pursuant to
Article XIII shall be treated as a separate investment option
with respect to such Participant; provided, however, the transfer
of assets from one Investment Fund to another in order to
facilitate a Plan loan to a Participant shall not constitute an
investment election change pursuant to Section 9.5(d). A loan
subaccount shall be established and maintained by the
Recordkeeper and the Participant's balance in the other
Investment Funds shall be reduced in the percentages and from
such Funds designated by the Participant in accordance with rules
adopted by the Committee to account for the funding of the loan
or, if the Participant fails to designate which Investment Funds
shall be used to fund his loan, the Participant's balance in the
other Investment Funds shall be reduced on a pro rata basis to
account for the funding of the loan. The Participant's loan
subaccount shall be credited with interest at the loan repayment
rate. As the Participant repays the loan, the balance in the
loan subaccount shall be reduced and the Participant s balance in
the Investment Funds then selected by the Participant shall be
increased by allocating the Participant's loan repayments to such
Investment Funds. Loan repayments shall be allocated to
Investment Funds in the same proportion as the Participant's
current investment direction election with respect to
contributions. If the Participant is not making current
contributions, then loan repayments shall be allocated to the
Investment Funds in the same proportion as the Participant's most
recent investment direction election with respect to
contributions.
(d) Change of Future Investment Elections and Transfer of
Past Investment Elections. Except as provided in Sections 9.6,
9.7 and 9.9, and subject to any special rules adopted by the
Committee with respect to certain Investment Funds which, by
their nature, require special treatment or are subject to
particular restrictions, a Participant shall be permitted to
change the investment of any future contributions made to the
Plan on his behalf (including loan repayments pursuant to Article
XIII) and to transfer contributions to the Trust Fund previously
invested in one Investment Fund and earnings thereon to one or
more other investment Funds (other than the Household
International, Inc. Common Stock Fund or any other Investment
Fund designated by the Committee from time to time as a frozen
Fund) in accordance with the provisions of this Section 9.5(d).
A change of future investment elections or a transfer of past
investment elections from one Investment Fund to another
Investment Fund shall be made in multiples of 5%, or in such
other minimum percentages or amount as may be prescribed by the
Committee from time to time.
(i) Change of Future Investment Elections.
(A) Contributions Other than Matching Company
Contributions and TRIP+ Contributions. A
Participant may elect to change his
investment elections for future payroll
periods with respect to Tax Reduction
Contributions, Investment Plan Contributions,
Rollover Contributions and loan repayments
(and, effective prior to June 30, 1997,
Matching Company Contributions and TRIP+
Contributions made with respect to calendar
quarters ending prior to June 30, 1997) made
to the Plan on his behalf effective as of the
first payroll period occurring on or after
the first day of any month designated by the
Participant following Notice to the Committee
or the Recordkeeper, provided that such
Notice is received by the Committee or the
Recordkeeper on or before the 25th day of the
month preceding the month for which the
change is to be effective or such other date
as may be prescribed by the Committee from
time to time.
(B) Certain Matching Company Contributions and
TRIP+ Contributions. Matching Company
Contributions and TRIP+ Contributions made to
the Plan on a Participant s behalf with
respect to calendar quarters ending on and
after June 30, 1997 and prior to June 30,
1998 shall be invested in the Zurn Stock Fund
and, with respect to calendar quarters ending
on and after June 30, 1998 shall be invested
in the U.S. Industries Stock Fund. Except as
provided in Section 9.7, a Participant may
not elect to change such investment election
applicable to such Matching Company
Contributions and TRIP+ Contributions.
(ii) Transfer of Past Investment Elections.
(A) Amounts Attributable to Contributions Other
than Certain Matching Company Contributions
and TRIP+ Contributions. A Participant, or
if applicable, a Former Participant,
Beneficiary or Alternate Payee, may elect to
transfer amounts attributable to his past
investment elections with respect to
contributions made to the Plan on his behalf
(other than Matching Company Contributions
and TRIP+ Contributions made with respect to
calendar quarters ending on and after June
30, 1997), effective as soon as
administratively practicable after the first
day of any month designated by the
Participant (or the Former Participant or
Beneficiary, if applicable) following Notice
to the Committee or the Recordkeeper provided
that such Notice is received by the Committee
or the Recordkeeper on or before the 25th day
of the month preceding the month for which
the transfer is to be effective or such other
date as may be prescribed by the Committee
from time to time.
(B) Amounts Attributable to Certain Matching
Company Contributions and TRIP+
Contributions. Except as provided in Section
9.7, amounts attributable to Matching Company
Contributions and TRIP+ Contributions made
with respect to calendar quarters ending on
and after June 30, 1997 shall not be
available for transfer to any other
Investment Fund.
(iii) Elective Investments in Zurn Stock Fund.
Notwithstanding the foregoing, prior to July 1, 1997 or
such later date as shall be selected by the Committee,
in its discretion, (such date referred to herein as the
"Zurn Stock Fund Transition Date"), a Participant, or
if applicable, a Former Participant, Beneficiary of
Alternate Payee, may not elect to invest in the Zurn
Stock Fund future Tax Reduction Contributions,
Investment Plan Contributions, Rollover Contributions
or loan repayments made to the Plan on his behalf nor
may any such individual, prior to the Zurn Stock Fund
Transition Date, elect to transfer to the Zurn Stock
Fund any amounts attributable to contributions made to
the Plan on his behalf prior to the Zurn Stock Fund
Transition Date. Effective as of the Zurn Stock Fund
Transition Date, a Participant, or if applicable, a
Former Participant, Beneficiary or Alternate Payee, may
elect to invest future Tax Reduction Contributions,
Investment Plan Contributions, Rollover Contributions,
or loan repayments made to the Plan on his behalf in
the Zurn Stock Fund and may elect to transfer to the
Zurn Stock Fund amounts attributable to contributions
made to the Plan on his behalf prior to the Zurn Stock
Fund Transition Date.
(e) Failure to Provide Investment Instructions. If a
Participant or Former Participant fails to provide instructions
to the Committee directing the investment of any contribution to
the Trust or amount held by the Trust for which the Participant
or Former Participant may direct the investment, such
contribution or other amount, pending the Committee's receipt of
proper investment instructions from the Participant or Former
Participant, shall be invested in such Investment Fund or Funds
as may be designated by the Committee from time to time for such
purpose. If a Beneficiary of a deceased Participant or an
Alternate Payee under a Qualified Domestic Relations Order fails
to provide instructions to the committee directing the investment
of any amount held by the Trust for which such Beneficiary or
Alternate Payee may direct the investment, such amount, pending
the Committee's receipt of proper investment instructions from
the Beneficiary or Alternate Payee, shall continue to be invested
in the manner last elected by the Participant from whose Account
such amount arose.
(f) Participant Investment Directions. It is intended that
the rights given to Participants to direct the investment of
their Accounts, as set forth in this Section 9.5, satisfy the
provisions of Section 404(c)(2) of ERISA and Department of Labor
regulations promulgated thereunder. Accordingly, notwithstanding
any other provisions of the Plan, in no event shall any person
who is otherwise a fiduciary under this Plan be liable for any
loss, or by reason of any breach under ERISA, which results from
a Participant s direction of the investment of his Account.
9.6 Investment of Matching Company Contributions and TRIP+
Contributions. Except as elected otherwise by a Participant
pursuant to Section 9.7, (i) Matching Company Contributions and
TRIP+ Contributions made with respect to calendar quarters ending
on and after June 30, 1997 and prior to June 30, 1998 shall be
invested in the Zurn Stock Fund and may be made in the form of
Zurn Stock or cash and (ii) Matching Company Contributions and
TRIP+ Contributions made with respect to calendar quarters ending
on and after June 30, 1998 shall be invested in the U.S.
Industries Stock Fund and may be made in the form of U.S.
Industries Stock or cash. Except as elected otherwise by a
Participant or a Former Participant pursuant to Section 9.7,
amounts attributable to Matching Company Contributions and TRIP+
Contributions made with respect to calendar quarters ending on
and after June 30, 1997 and prior to June 30, 1998 shall remain
invested in the Zurn Stock Fund and amounts attributable to
Matching Company Contributions and TRIP+ Contributions made with
respect to calendar quarters ending on and after June 30, 1998
shall remain invested in the U.S. Industries Stock Fund.
9.7 Diversification Election. Notwithstanding the
provisions of Sections 9.5 and 9.6, effective June 30, 1997, any
Participant or Former Participant who has attained age 57 may
elect to transfer all or a portion of his Matching Company
Contribution Account and TRIP+ Contribution Account from the Zurn
Stock Fund (or, if on or after the consummation of the USI Merger
Transaction, the U.S. Industries Stock Fund) to one or more other
Investment Funds (except the Household International, Inc. Common
Stock Fund or any other Investment Fund designated by the
Committee from time to time as a frozen Fund) in accordance with
the provisions of this Section 9.7.
(a) An election by a Participant or Former Participant
pursuant to this Section 9.7 to transfer the investment of any or
all of the portion of his Matching Company Contribution Account
and TRIP+ Contribution Account which is attributable to Matching
Company Contributions and TRIP+ Contributions made with respect
to calendar quarters ending on and after June 30, 1997 and before
the effective date of the election (as provided herein) shall be
made only in connection with a transfer of past investment
elections which applies to all Accounts then maintained on behalf
of the Participant or Former Participant and shall be in 5%
multiples (or such other minimum percentages or amounts as may be
prescribed by the Committee from time to time) of all such
Accounts. The election shall be subject to the same procedural
requirements described in Section 9.5(d)(ii)(A) and, subject to
such requirements, may be made effective as of any effective date
described in Section 9.5(d)(ii)(A); provided, however, the
effective date of any election under this Section 9.7(a) shall
not precede the first payroll period occurring on or after the
first day of the month following the month in which the
Participant attains age 57.
(b) A Participant or Former Participant shall have no
election as to whether Matching Company Contributions and/or
TRIP+ Contributions are made in the form of Zurn Stock or cash
(or, upon the consummation of the USI Merger Transaction, in the
form of U.S. Industries Stock or cash).
9.8 Qualified Domestic Relations Orders. The Committee
shall establish policies and procedures for reviewing domestic
relations orders relating to a Participant's interest in the
Plan. The Committee or its delegate shall determine whether any
such domestic relations order is a Qualified Domestic Relations
Order. If an Alternate Payee does not receive an immediate
distribution pursuant to Section 11.10, the Committee shall
direct the Recordkeeper to identify the Alternate Payee's
interest in the Trust Fund pending a distribution to the
Alternate Payee.
9.9 Special Restrictions on Transfer and Withdrawal of
Amounts Invested in Zurn Stock Fund or U.S. Industries Stock
Fund.
(a) The restrictions in Section 9.9(b) shall apply to that
portion of Accounts maintained on behalf of Participants, Former
Participants, Beneficiaries and Alternate Payees which are
invested in the Zurn Stock Fund or U.S. Industries Stock Fund
and, if and to the extent necessary, any election made by a
Participant, Former Participant, Beneficiary or Alternate Payee
under the Plan shall be deemed modified to be consistent with
this Section 9.9.
(b) Notwithstanding the foregoing provisions of this
Article IX or any other provision of the Plan:
(i) No Participant, Former Participant, Beneficiary or
Alternate Payee shall, on the basis of material
nonpublic information with respect to Zurn or its
affiliates, make an election permitted under the Plan
if (A) such election would result in an exchange into
or out of, loans from, withdrawals from, or an increase
or decrease in the amount of contributions to the Zurn
Stock Fund, and (B) the transaction resulting from such
election is prohibited by Rule 10b-5
(ii) No officer shall make an election permitted under
the Plan if such election would result in a transaction
involving the Zurn Stock Fund which is not an exempt
transaction pursuant to Rule 16b-3.
(c) The provisions of Section 9.9(b) shall continue to
apply upon the consummation of the USI Merger Transaction by
substituting "U.S. Industries" for "Zurn" and by substituting
"U.S. Industries Stock Fund" for "Zurn Stock Fund" in each place
where the latter term is used.
(d) For purposes of this Section 9.9, the terms "Rule 10b-5"
and "Rule 16b-3" shall mean the rules, as amended, having
those designations promulgated by the United States Securities
and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, and the terms "affiliate" and "officer"
shall have the meanings set forth in Rule 12b-2 and Rule 16a-1(f),
respectively, both as so promulgated and amended.<PAGE>
ARTICLE X
PARTICIPANT VESTING
10.1 Vesting of Accounts. A Participant shall at all times
be fully vested in all amounts credited to his Tax Reduction
Contribution Account, Investment Plan Contribution Account, TRIP+
Contribution Account attributable to contributions made pursuant
to Section 4.3A(b), and his Rollover Account, including any such
contributions made for the Plan Year of the Participant's
termination of employment but not yet allocated. Amounts
credited to a Participant's Matching Company Contribution Account
and TRIP+ Contribution Account attributable to contributions made
pursuant to Section 4.3A(a) shall become fully vested upon the
occurrence, while employed by an Affiliated Company, of (i) a
Participant s attainment of his Normal Retirement Date, (ii) a
Participants Disability or (iii) a Participant's death. In
addition, the Committee may, in its sole and absolute discretion,
fully vest the Matching Company Contribution Accounts and TRIP+
Contribution Accounts attributable to contributions made pursuant
to Section 4.3A(a) of similarly situated Participants in special
circumstances including, but not limited to, a sale of stock or
assets of an Employer.
10.2 Termination of Service Prior to Normal Retirement Date,
Disability or Death. If a Participant's employment terminates
prior to his Normal Retirement Date for any reason other than
Disability, death, or an event referred to in Section 10.1, the
portion of such Participant's Matching Company Contribution
Account, if any, that shall be vested shall be determined
according to the following schedule:
Years of Vested Forfeited
Matching Percentage Percentage
Company Account
less than 1 0% 100%
1 but less than 2 20% 80%
2 but less than 3 40% 60%
3 but less than 4 60% 40%
4 or more 100% 0%
For purposes of this Section 10.2, "Years of Matching Company
Account" will be measured in calendar quarters beginning with the
calendar quarter with respect to which the Participant first has
Matching Company Contributions allocated to his account (or, if
he was a Participant in the Prior Plan, had such contributions
allocated to his account in the Prior Plan) and ending with the
calendar quarter in which the Participant's employment is
terminated.
Notwithstanding the foregoing vesting schedule, a
Participant shall be 100% vested in amounts allocated to his
Matching Company Contribution Account after 5 Years of Service,
determined in accordance with Article III hereof. The value of a
Participant s vested benefit shall be determined as of the
Valuation Date immediately preceding the Participant's Annuity
Starting Date. Such payment shall be made at such times and in
such manner as provided in Article XI.
If a Participant s employment terminates prior to his Normal
Retirement Date for any reason other than Disability, death, or
an event referred to in Section 10.1, the portion of such
Participant s TRIP+ Contribution Account attributable to
contributions made pursuant to Section 4.3A(a), if any, that
shall be vested shall be determined according to the following
schedule:
Years of Service
Vested Percentage
less than 5
0%
5 or more
100%
10.3 Forfeiture of Non-Vested Portion of Account. The
portion of a Participant's Account attributable to Matching
Company Contributions in which he is not vested when his
employment with the Company or an Affiliated Company is
terminated shall be forfeited upon the earlier of (i) the date he
receives a distribution of his entire vested interest (including
for this purpose, an annuity contract that represents his right
to such vested interest), or (ii) the fifth anniversary of the
Participant s severance from service date, as defined in Section
3.6. A Participant who does not have any vested interest in the
portion of his Account attributable to Matching Company
Contributions as of his severance from service date shall be
deemed to have received a distribution for purposes of this
Section 10.3 as of his severance from service date. The non-vested
portion of a Participant's Account shall be forfeited in
accordance with this Section 10.3 and Section 11.9, and the
forfeitures shall be applied as set forth in Section 11.12.
10.4 Restoration of Non-Vested Interest. If, following his
termination of employment, a Participant received a distribution,
or was deemed to have received a distribution pursuant to Section
10.3, of his entire vested interest under the Plan and then is
reemployed and performs an Hour of Service prior to the fifth
anniversary of the date on which he received (or was deemed to
have received) a distribution, the entire amount forfeited,
unadjusted for gains and losses following the distribution, shall
be restored to his Account. At any time thereafter, the amount
in which he is vested shall be determined by applying his vested
percentage against the sum of the distribution and the amount
restored; provided, however, that the amount actually distributed
to him upon his subsequent termination of employment shall be
offset by the amount previously distributed. The amount to be
restored shall be credited first against forfeitures arising for
the Plan Year, and if such forfeitures are not sufficient to
satisfy the amount to be restored in full, such amount shall be
satisfied out of Employer contributions for the Plan Year, which
contributions shall be supplemented for the Plan Year by an
amount equal to such remainder. The amount restored shall not be
deemed an Annual Addition or portion thereof for any Limitation
Year.
ARTICLE XI
PAYMENT OF BENEFITS
11.1 Withdrawals During Employment.
(a) A Participant, upon Notice, may, during his employment,
elect to withdraw amounts from his Account pursuant to this
Section 11.1 to the extent vested under Article X; provided,
however, that with respect to each withdrawal, a minimum of $500
(or, if less, the balance of the Participant's Account) must
be withdrawn and a Participant may receive no more than two non-hardship
withdrawals during any Plan Year. The provisions of
Category A and Category B below shall be effective January 1,
1991. A Participant must withdraw all amounts eligible for
withdrawal, if any, in each category below (listed in descending
order) before amounts in the next lower category may be
withdrawn:
Category A: All of his Investment Plan Contributions made
prior to 1987 under the Prior Plan excluding earnings
attributable to such contributions. A Participant may withdraw
amounts from this category no more often than twice in any Plan
Year.
Category B: All of his other Investment Plan
Contributions and earnings attributable to Investment Plan
Contributions (including earnings attributable to pre-1987
Investment Plan Contributions); provided, however, that the most
recent twenty-four months of Investment Plan Contributions that
were matched by Matching Company Contributions and the earnings
attributable to such contributions may not be withdrawn unless a
Participant has participated in the Plan (or the Plan and the
Prior Plan) for at least five years. A Participant may withdraw
amounts from this category no more often than twice in any Plan
Year.
Category C: In the case of a Participant who has been a
Participant in the Plan (including participation in the Prior
Plan) for five or more years, all or any portion of his Matching
Company Contributions (plus earnings thereon) made with respect
to calendar quarters ending prior to June 30, 1997 and all or any
portion of the earnings on such Matching Company Contributions.
A Participant described in the preceding sentence who has
attained age 57 may also withdraw all or any portion of his
Matching Company Contributions (plus earnings thereon) made with
respect to calendar quarters ending on and after June 30, 1997.
A Participant may withdraw amounts from this category no more
often than once in any Plan Year.
Category D: All or any portion of his Rollover
Contribution (plus earnings thereon). A Participant may withdraw
amounts from this category no more often than twice in any Plan
Year.
Category E: All or any portion of his Tax Reduction
Contributions (but only to the extent of the value of the
Participant's Tax Reduction Contribution subaccount in the Prior
Plan as of December 31, 1988 plus the amount of his Tax Reduction
Contributions to the Prior Plan and to this Plan thereafter) that
is needed to satisfy a hardship created by an immediate and heavy
financial need, subject to the following rules and procedures:
(i) A withdrawal for hardship may be made only if the
Participant has:
(A) withdrawn the maximum amount available under
the foregoing Categories A-D;
(B) withdrawn the maximum amount available to him
under any other qualified plan maintained by
an Affiliated Company; and
(C) taken out the maximum loan amount pursuant to
the provisions of Article XIII.
(ii) A withdrawal for a hardship may be made only for
the following reasons:
(A) medical expenses described in Section 231(d)
of the Code incurred by the Participant, his
spouse or any dependents (as defined in
Section 152 of the Code) or necessary for
such persons to obtain medical care as
described in Section 213(d) of the Code;
(B) costs directly related to the purchase
(excluding mortgage payments) of a principal
residence of the Participant;
(C) payment of tuition and related educational
fees for the next 12 months of post secondary
education for the Participant or his spouse,
children or dependents (as defined in Section
152 of the Code); or
(D) payments necessary to prevent eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the
Participant's principal residence.
(iii) A withdrawal for a hardship may be made only
once during any Plan Year and may be made only under
the following terms and conditions:
(A) the withdrawal shall not exceed the amount of
the hardship;
(B) the Participant may not make any Tax
Reduction Contributions or Investment Plan
Contributions under this Plan or before tax
or after tax contributions to any other
pension, profit sharing, deferred
compensation or stock purchase plan
maintained by an Affiliated Company (whether
such plan is qualified or nonqualified) but
excluding any health or welfare plan
(including a cafeteria plan within the
meaning of Section 125 of the Code) for a
period beginning with the payroll period next
following the date he receives the hardship
withdrawal and ending with the last day of
the calendar quarter that is at least 12
months following the receipt of the hardship
withdrawal; and
(C) the Participant may not make Tax Reduction
Contributions to this Plan or before tax
contributions to any other pension or profit
sharing plan maintained by an Affiliated
Company for the Participant's taxable year
immediately following the taxable year of a
hardship distribution in excess of the
applicable limits under Section 402(g) of the
Code for such taxable year less the amount of
such Participant's Tax Reduction
Contributions for the taxable year of the
hardship withdrawal.
(iv) The determination of the amount of an immediate
and heavy financial need for purposes of this
subsection shall, at the Participant's election,
include any amounts necessary to pay any federal, state
or local income taxes, based on applicable supplemental
withholding tables, and penalties resulting from the
withdrawal for a hardship under this Section 11.1(a).
(b) Any Participant who has attained age 59-1/2 may elect
once each Plan Year to withdraw all or a portion of his Tax
Reduction Contributions and/or his TRIP+ Contributions and the
earnings thereon, regardless of whether he meets the hardship
requirements hereof, provided he has first exhausted all amounts
eligible for withdrawal in Categories A through D of Section
11.1(a). All withdrawals under this Section 11.1 shall be made
as soon as administratively practicable after the first day of
any month, as elected by the Participant, following the date the
Participant s Notice of withdrawal is received by the
Recordkeeper with respect to withdrawals under Categories A
through D of Section 11.1(a) and Section 11.1(b) or the Committee
with respect to withdrawals under Category E of Section 11.1(a)
specifying the category of the withdrawal and the amount
requested to be withdrawn, if the Recordkeeper or, if applicable,
the Committee receives such Notice on or before the 25th day of
the preceding month; provided, however, that hardship withdrawals
shall be made as soon as administratively practicable following
the date Notice is received by the Committee and the Committee
approves the withdrawal. All withdrawals under this Section 11.1
shall be based on the value of the Participant s Investment Plan
Contribution Account, his Tax Reduction Contribution Account, his
Matching Company Contribution Account, his TRIP+ Contribution
Account and his Rollover Account, as the case might be, as of the
Valuation Date immediately preceding receipt of the Participant s
Notice by the Recordkeeper or, if applicable, the Committee.
Upon approving the amount of any withdrawal, the Recordkeeper
shall furnish the Trustee with written instructions directing the
Trustee to make a single sum payment of the withdrawal. Except
as provided in the following sentence, payments from the
Investment Funds shall be in cash. Payments from the Zurn Stock
Fund or U.S. Industries Stock Fund and payments from the
Household International, Inc. Common Stock Fund shall be in cash
or stock or a combination of both, as elected by the Participant;
provided, however, that (i) a hardship withdrawal may only be
made in cash, (ii) no distribution of less than twenty (20)
shares will be made from the Zurn Stock Fund, the U.S. Industries
Stock Fund or the Household International, Inc. Common Stock
Fund, and (iii) partial shares of stock held in the Funds
described in (ii) above will be paid in cash. Withdrawals under
this Section 11.1 shall, to the extent required by the Code, be
subject to the provisions of Section 11.11. A Participant may,
subject to any restrictions and limitations imposed on a
particular Investment Fund, direct withdrawals under this Section
11.1 which are less than the full value of any Account from which
an amount is withdrawn to be charged to any one or more of the
Investment Funds in which such Account is invested. Such
direction shall be given by the Participant with his Notice to
withdraw and shall specify the manner in which the withdrawal
will be allocated among the Investment Funds. If a Participant
does not specify the manner in which a withdrawal shall be
allocated among Investment Funds, the Committee shall allocate
the withdrawal on a pro rata basis among the Participant s
Investment Fund elections, subject to any restrictions or
limitations applicable to a particular Investment Fund. The
Committee or its delegate from time to time may establish
procedures that govern the tax treatment of withdrawals from the
Plan, which procedures shall not necessarily be consistent with
the categories of withdrawals provided under this Article XI.
Unless the Committee or its delegate determines otherwise,
however, Categories A and B of Section 11.1(a) shall be treated
as a single contract for Federal income tax purposes.
11.2 Amounts Payable Following Termination of Service. Upon
a Participant's termination of employment, distributions from the
Plan shall be made, to the extent vested under Article X, at the
time specified in Section 11.3 (subject to the provisions of
Section 11.6) and in the form specified in Section 11.4.
11.3 Time of Payment.
(a) Retirement. In the event a Participant terminates
employment with the Employer after (i) attaining his Normal
Retirement Date or (ii) satisfying the requirements for early
retirement under any defined benefit pension plan maintained by
the Employer in which he participates, unless the Participant
elects to defer payment pursuant to this Section 11.3(a), payment
of the Participant's entire Account shall commence as soon as
administratively practicable after the Quarterly Valuation Date
coincides with or next following the Participant's severance from
service date, provided that the Committee has received at least
30 days advance written notice of the Participant's severance
from service date. The amount distributable shall be valued as
of such Quarterly Valuation Date, or such later Valuation Date
selected by the Participant in the event the Participant elects
to defer payment as provided herein. A Participant described in
this Section 11.3(a) may, regardless of the value of his Account,
elect to defer payment of his Account to any Valuation Date after
his severance from service date specified by him, but no later
than December 31 of the Plan Year immediately following the later
of (i) the Plan Year in which he terminates employment with the
Employer or (ii) the Plan Year in which he attains age 65. An
election of a Participant to defer payment of benefit shall be
made by submitting to the Committee a written statement signed by
the Participant, describing the benefits and the Valuation Date
on which the Participant requests that the payments commence;
provided, however, a Participant may not elect to defer receipt
or commencement of receipt of benefits beyond the date required
pursuant to Section 401(a)(9) of the Code. The value of the
Participant's Account shall be determined as of the Valuation
Date selected by the Participant pursuant to his deferral
election and payment shall commence as soon as administratively
practicable following such Valuation Date.
(b) Death or Disability. In the case of the death or
Disability of a Participant (whether before or after a
Participant s severance from service date with the Employer),
except in the case of a distribution deferred pursuant to this
Section 11.3(b) or Section 11.3(e), payment of the Participant's
entire Account shall commence as soon as administratively
practicable after the Quarterly Valuation Date that coincides
with or next follows 30 days advance written notice to the
Committee of proof of the Participant's death or, if applicable,
30 days following the determination by the Committee of the
Participant's Disability. The amount distributable shall be
valued as of such Quarterly Valuation Date, or such later
Valuation Date in the event the Participant (or Beneficiary)
elects to defer payment as provided herein. Subject to the
provisions of Section 11.6, a Beneficiary of a Participant who
was eligible to receive a distribution pursuant to Section
11.3(a) as of the date of his death, may elect to defer payment
of the Participant's Account to any Valuation Date specified by
the Beneficiary, but not later than December 31 of the Plan Year
immediately following the Plan Year in which the Participant
died. An election by a Beneficiary to defer payment of benefits
shall be made by submitting written notice to the Committee in
the same manner described for a Participant in Section 11.3(a).
The value of the Participant's Account shall be determined as of
the Valuation Date selected by the Beneficiary pursuant to his
deferral election and payment shall commence as soon as
administratively practicable following such Valuation Date.
(c) Other Severance from Service. Subject to the
provisions of Sections 11.3(d) and 11.3(e), upon a Participant's
termination of employment with the Employer for any reason other
than the Participant s attainment of his Normal Retirement Date,
his death or his Disability, the Participant's vested Account
shall become distributable to him as soon as administratively
practicable after the Quarterly Valuation Date next following the
Participant s severance from service date, provided that the
Committee has received at least 30 days advance written notice of
the Participant s severance from service. The amount payable
shall be valued as of such Quarterly Valuation Date. Pending
distribution pursuant to this Section 11.3(c), the Participant's
Account shall continue to share in the earnings and losses of the
Trust until the Valuation Date for which such deferred
distribution is made and the Participant s rights with respect to
his Account shall be subject to the provisions of Section
11.3(f).
(d) Earlier Distribution; Waiver of Matching Company
Contributions. A Participant (or Beneficiary) may elect to
receive his vested Account as soon as administratively
practicable following a monthly Valuation Date after his
severance from service date (or death) but earlier than the
Quarterly Valuation Date set forth in Sections 11.3(a), (b) and
(c) hereof, provided that the Committee has received at least 30
days advance written notice of the Participant's severance from
service date (or death). The amount distributable shall be
valued as of such earlier monthly Valuation Date.
Notwithstanding any other provision of the Plan, a Participant
(or Beneficiary) who makes an election under this Section 11.3(d)
shall not be entitled to any Matching Company Contributions or
TRIP+ Contributions with respect to the calendar quarter in which
the Valuation Date described hereunder occurs.
(e) Limitation on Involuntary Payment of Benefits and Lump
Sum Cashouts. Notwithstanding any provision of this Article XI
to the contrary, subject to the provisions of Section 11.3(d), if
upon termination of a Participant's employment with an Employer
the value of the Participant's vested Account does not exceed
$3,500 (or for periods on and after June 1, 1998, $5,000), the
Committee shall direct the Trustee to distribute the value of the
Participant's vested Account to the Participant (or, in the event
of the Participant's death, to the Participant's Beneficiary) or
to an eligible retirement plan as defined in Section 402(c)(8)(B)
of the Code pursuant to the Participant's (or, if applicable, the
Participant's spouse's or former spouse's) direct rollover
election described in Section 11.11, in a single lump sum as soon
as administratively practicable after the Quarterly Valuation
Date next following the Participant's severance from service
date. If upon termination of a Participant's employment with an
Employer for any reason other than death the then value of the
Participant's vested Account exceeds $3,500 (or, for periods on
and after June 1, 1998, $5,000), no distribution of the
Participant's vested Account to the Participant may occur prior
to the Participant's Normal Retirement Date unless the
Participant files with the Committee a written request for the
payment of his vested Account, such request expressly to consent
to the payment. If the Participant files such a request, the
Committee shall direct the Trustee to pay such amount to the
Participant a soon as administratively practicable after the
later of (i) the Quarterly Valuation Date following the
Participant's separation from service date or (ii) the Valuation
Date next following receipt of said request. If such a
Participant does not consent to a distribution, the Trustee shall
continue to hold the Participant's vested Account in trust and
shall distribute the Participant's vested Account in a single
lump sum payment as soon as administratively practicable
following the Valuation Date coinciding with or next following
the date the Participant attains his Normal Retirement Date. In
accordance with rules prescribed by the Committee, a Participant
who does not consent may elect to defer his distribution until a
date which is as soon as administratively practicable following
any Valuation Date thereafter, but not later than the Valuation
Date coinciding with or next following the Participant's Normal
Retirement Date, valued as of such later Valuation Date. Except
as provided otherwise herein, no consent to a distribution shall
be valid unless the Participant has received a notice describing
the material features, and an explanation of the relative values,
of the forms of benefit available under the Plan with respect to
the distribution and notice describing the Participant's direct
rollover rights described in Section 11.11 hereof, no less than
30 days and no more than 90 days before the Annuity Starting
Date. If the distribution is one to which sections 401(a)(11)
and 417 of the Code do not apply, such distribution may commence
less than 30 days after the notice required under section
1.411(a)-11(c)of the Income Tax Regulations is given, provided
that (i) 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 (ii) the Participant, after receiving
the notice, affirmatively elects a distribution.
(f) Treatment of Accounts in the Case of Deferred
Distribution. If a Participant or Beneficiary elects to defer
distribution of the Participant's vested interest pursuant to
Sections 11.3(a), (b), (c) or (e) hereof, the Participant's
Account shall continue to share in the earnings and losses of the
Trust until the applicable Valuation Date under Sections 11.3(a),
(b), (c) or (e). Transfers among Investment Funds shall be
permitted until the applicable Valuation Date. However, except
as provided in Section 13.7, loans granted under Article XIII
shall be immediately due and payable upon the Participant's
severance from service date.
(g) Forfeiture of Non-Vested Account Upon Distribution. As
of the date of the distribution of a Participant's vested Account
pursuant to this Section 11.3, the Non-Vested portion of the
Participant's Account shall be forfeited, subject to restoration
as provided in Section 10.
11.4 Method of Payments.
(a) Except as provided in Section 11.4(b), payment, to a
Participant, Former Participant or Beneficiary shall be made in
the form of a single lump sum payment in cash of the total amount
due; provided, however, that a Participant or Former Participant
may elect to receive a portion of his lump sum payment
attributable to (i) his interest in the Zurn Stock Fund, in the
form of shares of Zurn Stock, (ii) his interest in the U.S.
Industries Stock Fund, in the form of shares of U.S. Industries
Stock, (iii) his interest, if any, in the Household
International, Inc. Common Stock Fund, in shares of common stock
of Household International, Inc. and (iv) for a Participant,
Former Participant or Beneficiary who receives a distribution on
or before June 30, 1993, his interest, if any, in the Equity
Securities Fund, in shares of the Fidelity Equity Income Fund.
Notwithstanding the preceding sentence, no distribution of less
than twenty (20) shares shall be made from the Zurn Stock Fund,
the U.S. Industries Stock Fund or the Household International,
Inc. Common Stock Fund and partial shares in each such fund will
be paid in cash.
(b) Notwithstanding the provisions of Section 11.4(a),
subject to Section 11.6, a Participant, Former Participant or
Beneficiary may elect to have the value of his Accounts paid in
one or more of the following manners:
(i) A Participant or Former Participant who became a
Participant prior to July l, 1989 and who does not have
a loan outstanding may elect to receive his
distribution in a single sum, as an immediate annuity
purchased under the group annuity contract or
contracts, or as a combination of both, or in any other
form available through a group annuity contract issued
to the Plan by a legal reserve life insurance company
authorized to do business in the State of Texas;
provided, however, that if an annuity form of payment
is chosen, then unless otherwise elected pursuant to
Section 11.4(c), a married Participant's vested Account
shall be paid in the form of a Qualified Joint and
Survivor Annuity (as long as the Participant does not
die before his annuity starting date, in which case the
Participant's vested Account shall be paid in the form
of a Qualified Preretirement Survivor Annuity to his
surviving spouse). The forms of immediate annuity
available under the group annuity contract or contracts
shall include the following:
(A) Qualified Joint and Survivor Annuity. An
annuity for the life of the Participant or
Former Participant with a survivor annuity
for the life of such Participant s spouse
which is not less than one half, or greater
than the amount of the annuity payable during
the joint lives of the Participant and such
Participant's spouse; and
(B) Annuity Certain and Life. An annuity for the
life of the Participant or Former Participant
with a guaranteed minimum number of monthly
payments as specified by the Participant or
Former Participant.
(ii) A Participant, Former Participant or eligible
Beneficiary may elect a direct rollover to an eligible
retirement plan as described in Section 402(c)(8)(B) of
the Code pursuant to the provisions of Section 11.11.
Notwithstanding the foregoing provisions, no Participant or
Former Participant may elect a distribution in the form of an
annuity unless the annuity payments will equal or exceed $30.00
per month.
(c) A Qualified Joint and Survivor Annuity (as herein so
called) is an annuity for the life of the Participant with a
survivor annuity for the life of the spouse equal to not less
than 50 percent of the amount of the annuity which is payable
during the joint lives of the Participant and his spouse, and
which is the actuarial equivalent of a single life annuity for
the life of the Participant. A Qualified Preretirement Survivor
Annuity (herein so called) is an annuity for the life of the
surviving spouse that is actuarially equivalent to 100 percent of
the vested Account of the Participant (as of his date of death).
A Participant may elect at any time during the applicable
election period to waive the Qualified Joint and Survivor Annuity
in favor of a single life annuity or another form of distribution
available under the Plan, and may revoke such election at any
time during the applicable election period, provided that, for
the election to be effective, (i) the Participant's spouse must
consent in writing to such election, such spouse's consent must
acknowledge the effect of such election, and her signature must
be witnessed by a Plan representative or notary public (or it
must be established to the satisfaction of a Plan representative
that the consent may not be obtained because there is no spouse,
because the spouse cannot be located, or because of such other
circumstances as the Secretary of the Treasury may by regulations
prescribe); and (ii) the Plan must provide to each Participant,
within a reasonable period of time before the Annuity Starting
Date (and consistent with such regulations as the Secretary of
Treasury may prescribe), a written explanation of the terms and
conditions of the Qualified Joint and Survivor Annuity, the
Participant's right to make, and the effect of, an election to
waive the same, the rights of the Participant s spouse, and the
right to make, and the effect of, a revocation of such election.
For purposes of this Section 11.4(c), the "application election
period" is the 90 day period ending on the Annuity Starting Date.
In the case of a married Participant who elects a life
annuity form of benefit and dies prior to his Annuity Starting
Date, such that the Participant's surviving spouse shall receive
a Qualified Preretirement Survivor Annuity pursuant to Section
11.4(b), the spouse may elect in writing to waive such survivor
annuity in favorite of a single lump sum payment equal to the
Participant's vested Account as of his date of death.
(d) Notwithstanding the foregoing provisions of this
Section 11.4, the phrase "single lump sum payment" as used herein
shall not include the distribution of an insurance contract
providing for (i) a life annuity to a Participant, (ii) a joint
and survivor annuity to a Participant and his Beneficiary, or
(iii) any other form of payment having the effect of (i) or (ii)
above.
11.5 Minority or Legal Disability of Distribute. During the
minority or legal disability of a person entitled to receive
benefits hereunder, the Committee may, in its sole discretion,
direct payment of all or any portion of such benefits due such
person directly to him or to his spouse or a relative or to any
individual or institution having custody of such person. Neither
an Employer, the Committee nor the Trustee shall be required to
see to the application of any payments so made and the receipt of
the payee (including the endorsement of a check or checks) shall
be final, binding and conclusive as to all interested parties.
Any payment made pursuant to the power herein conferred upon the
Committee shall operate as a complete discharge of all
obligations of the Trustee and the Committee, to the extent of
the distributions so made.
11.6 Additional Requirements Relating to Benefit Payments.
Unless a Participant otherwise elects, payment of benefits under
the Plan to the Participant will begin not later than the 60th
day after the end of the Plan Year in which the latest of the
following events occur:
(a) the date on which the Participant attains his Normal
Retirement Age;
(b) the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or
(c) the Participant terminates employment with the
Employer.
Notwithstanding any other provisions of the Plan, all
distributions required under this Article XI shall be determined
and made in accordance with Section 401(a)(9) of the Code and the
Treasury Regulations thereunder, including the minimum
distribution incidental benefit requirements of Treasury
Regulation Section 401(a)(9)-2.
11.7 Claims Procedure. The Committee shall make all
determinations as to the right of any person to receive a benefit
from the Plan. The denial by the Committee of a claim for
benefits under the Plan, including but not limited to, a claim
for distribution, loan or withdrawal, shall be stated in a
written instrument signed by the Committee and delivered to or
mailed to the claimant within 60 days after receipt of the claim
by the Committee, unless special circumstances require an
extension of time for processing the claim, in which case a
determination shall be made as soon as possible, but in no event
later than 120 days after receipt of the claim. Written notice
of the extension shall be furnished to the claimant prior to the
termination of the initial 60 day period and shall indicate the
circumstances requiring the extension and the date by which the
Committee expects to render its decision. The written decision
shall set forth:
(a) the specific reason or reasons for the denial;
(b) a specific reference to the pertinent provisions of the
Plan on which the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect a claim and an explanation
of why such material or information is necessary; and
(d) a statement that the claimant may:
(i) request a review upon written application to the
Committee;
(ii) review pertinent plan documents; and
(iii) submit issues and comments in writing.
If notice of the denial is not furnished in accordance with the
above procedure, the claim shall be deemed denied and the
claimant shall be permitted to proceed with the review procedure.
A request by the claimant for a review of the denied claim must
be delivered to the Committee within 60 days after receipt by
such claimant of written notification of the denial of such
claim. The Committee shall, not later than 60 days after receipt
of a request for a review, make a determination concerning the
claim. If special circumstances require, the Committee shall
notify the claimant that an extension of time for processing, not
in excess of 120 days, after receipt of the request for review,
is necessary. A written statement stating the decision on
review, the specific reasons for the decision, and the specific
provisions of the Plan on which the decision is based shall be
mailed or delivered to the claimant within such 60 (or 120) day
period. If the decision on review is not furnished within the
appropriate time, the claim shall be deemed denied on review.
All communications from the Committee to the claimant shall be
written in a manner calculated to be understood by the claimant.
All interpretations, determinations and decisions by the
Committee in respect of any matter hereunder will be final,
conclusive, and binding upon the Employer, Participants, Former
Participants, Beneficiaries, and all other persons claiming an
interest in the Plan.
11.8 Committee's Duty to Trustee. The Committee will notify
the Trustee at the appropriate time of all facts which may be
necessary hereunder for the proper allocation of increases,
decreases, expenses, and contributions for Participants, the
proper payment or distribution of benefits, or the proper
performance of any other act required of the Trustee hereunder.
The Committee will notify the Trustee of such facts as are needed
by the Trustee to perform its functions under the Plan. The
Committee will secure appropriate elections, directions, and
designations for Participants, Former Participants, and
Beneficiaries provided for in the Plan.
11.9 Duty to Keep Committee Informed of Distributee's
Current Address. Each Participant, Former Participant and
Beneficiary must file with the Committee from time to time in
writing his mailing address and each change of mailing address.
Any communication, statement or Notice addressed to a
Participant, Former Participant or Beneficiary at his last
mailing address filed with the Committee or if no address is
filed with the Committee then at the last mailing address as
shown on an Employer's records, will be binding on the
Participant, Former Participant and their Beneficiaries for all
purposes of the Plan. Neither the Committee nor the Trustee shall
be required to search for or locate a Participant, Former
Participant or Beneficiary. In connection with the payment of any
benefits, the Committee shall mail by registered or certified
mail to the Participant, Former Participant or Beneficiary at his
last known address his distribution under the Plan. If the
distribution is returned to the Committee, the unpaid amounts
will be invested in an Investment Fund consisting primarily of
fixed income investments. If the Participant, Former Participant
or Beneficiary fails to claim his benefits under the Plan within
three years after the date of the distribution, the Committee
will direct that all unpaid amounts which would have been payable
to such Participant, Former Participant or Beneficiary will be
forfeited as of the next Valuation Date and applied to reduce
Matching Company Contributions as provided in Section 4.8. In the
event that the Participant, Former Participant or Beneficiary is
subsequently located, the unpaid amounts as of the date of the
forfeiture will be paid to such Participant, Former Participant
or Beneficiary. The funds used to make such distribution will be
paid from forfeitures. In the event the forfeitures are not
adequate to effect the distribution, the Employer shall make such
additional contribution to the Plan as is necessary to make such
distribution.
11.10 Distribution Pursuant Qualified Domestic
Relations Orders. Notwithstanding any other provision of the
Plan to the contrary, if the provisions of a Qualified
Domestic Relations Order provide that distributions shall be
made to an Alternate Payee prior to the time that the
Participant with respect to whom the Alternate Payee's
benefits are derived attains age 50 or would be entitled to a
distribution of assets from the Plan, the Trustee shall
commence payments to the Alternate Payee as soon as
administratively practicable following the later of (i) the
receipt of such Qualified Domestic Relations Order by the
Committee or (ii) the date the Committee receives the
Alternate Payee's written consent to such distribution. Unless
specified otherwise in a Qualified Domestic Relations Order, a
distribution to an Alternate Payee who is the former spouse of
the Participant shall be based on a pro rata allocation of the
Participant's Investment Plan Contributions as provided in
Section 72(m)(10) of the Code and amounts awarded to the
Alternate Payee shall be paid on a pro rata basis from the
Investment Funds in which the Participant is invested at the
time of the distribution to the Alternate Payee. Until such
time as payment is made to an Alternate Payee pursuant to this
Section 11.10, the Alternate Payee shall have no rights under
the Plan other than the rights of a Beneficiary and the right
to direct the investment of amounts awarded to Alternate Payee
pursuant to the provisions of Article IX.
11.11 Tax Withholding and Participant's Direct
Rollover Election. Unless provided otherwise in regulations
promulgated by the Secretary of the Treasury, to the extent
required under Section 3405 of the Code, the Trustee shall
withhold 20% of the taxable portion of the Plan distribution
or withdrawal made to a Participant, Former Participant or
Beneficiary after December 31, 1992 which constitutes an
eligible rollover distribution within the meaning of Section
402(c)(4) of the Code. Any amount withheld shall be deposited
by the Trustee with the Internal Revenue Service for the
purpose of paying the distributee's federal income tax
liability associated with the distribution or withdrawal.
Notwithstanding the foregoing provisions, commencing on and
after January 1, 1993, each Participant, each Former
Participant and each spouse (or former spouse under a
Qualified Domestic Relations Order) of a Participant or Former
Participant shall be provided with a notice described in
Section 11.3(e) hereof and given the right to elect [pursuant
to Section 401(a)(31) of the Code and applicable Treasury
regulations promulgated thereunder] during the period
described in Section 11.3(e) hereof to rollover all or any
portion of the taxable amount of such person's distribution or
withdrawal (subject to limitations and restrictions, if any,
adopted by the Committee in accordance with applicable
Treasury regulations) directly to an eligible retirement plan
as defined in Section 402(c)(8)(B) of the Code as limited by
Section 402(c)(9) of the Code and, to the extent a direct
rollover is elected by any such person, the tax withholding
requirements of this Section 11.11 will not apply. If
permitted by the Code or applicable Treasury regulations, a
direct rollover as described in the preceding sentence may be
accomplished by delivering a check from the Plan to the
distributee payable to the trustee or custodian of the
eligible retirement plan. Each direct rollover election shall
be in writing on a form prescribed by the Committee for such
purpose and given to the Participant, Former Participant or
spouse within a reasonable period of time prior to the
distribution or withdrawal.
11.12 Application of Forfeitures. As of each
Valuation Date forfeitures under Sections 5.1, 5.3, 6.2, 8.3,
10.3 and 11.9 less any restorations under Sections 10.4 and
11.9, shall be placed in a Plan forfeiture account and applied
as provided in Section 4.8.
11.13 Restrictions on Distributions. Notwithstanding
anything to the contrary contained in the Plan, a
Participant's Tax Reduction Contribution Account, any amounts
treated as "qualified non-elective contributions" as described
in Section 401(m)(4)(C) of the Code, and any earnings thereon,
shall not be distributed before the first to occur of the
following events:
(a) the Participant's retirement;
(b) his death;
(c) his permanent disability;
(d) his termination of employment;
(e) his attainment of age 59 1/2;
(f) the termination of the Plan, provided that neither
the Employer nor an Affiliated Company maintains a successor
plan;
(g) the disposition, to a corporation that is not an
Affiliated Company, of substantially all of the assets [within
the meaning of Code section 409(d)(2)] used by the Employer in
the trade or business in which the Participant is employed,
provided that the Participant continues employment with the
transferee corporation and the Employer continues to maintain
the Plan; or
(h) the disposition, to a corporation that is not an
Affiliated Company, of the Employer's interest in a subsidiary
in which the Participant is employed, provided that the
Participant continues employment with the subsidiary and the
Employer continues to maintain the Plan.
A distribution may be made under (f), (g) or (h) above only if
it constitutes a total distribution of the Participant's
entire balance in all Accounts and the account balances under
any other profit sharing plans of the Employer or an
Affiliated Company.
ARTICLE XII
NOTICE
12.1 Notice. As soon as practicable after a Participant
or Former Participant makes a request for payment or a benefit
becomes payable to a Beneficiary, the Committee shall notify
the Trustee of the following information and give such
directions as are necessary or advisable under the
circumstances
(a) name and address of the Participant, Former
Participant or Beneficiary, and
(b) amount to be distributed.
In addition to the information described above, for
distributions and withdrawals occurring after December 31,
1992, the Committee shall notify the Trustee, if applicable,
as to the identity, address and other pertinent information of
eligible retirement plans as described in Section 402(c)(8)(B)
of the Code to which the payee has elected to rollover
directly such distribution or withdrawal pursuant to Section
11.11 of the Plan.
12.2 Modification of Notice. At any time and from time
to time after giving the notice as provided for in Section
12.1, the Committee may modify such original notice or any
subsequent notice by means of a further notice or notices to
the Trustee but any action taken or payments made by the
Trustee pursuant to a prior notice shall not be affected by a
subsequent notice.
12.3 Reliance on Notice. Upon receipt of any notice as
provided in this Article XII, the Trustee shall promptly take
whatever action and make whatever payments are called for
therein, it being intended that the Trustee may rely upon the
information and directions in such notice absolutely and
without question.
ARTICLE XIII
LOANS
13.1 General Provisions Regarding Loans. At any time
prior to the date a Participant's benefits are paid, the
Committee, in its sole discretion and in accordance with the
policies and procedures set forth in this Article XIII, may
direct the Trustee to make a loan to a Participant (as defined
below) if such loans (a) are made on a reasonably equivalent
basis, (b) are not made available to Highly Compensated
Employees in an amount greater than the amount made available
to other Employees, (c) are adequately secured, and (d) bear a
reasonable interest rate. Solely for purposes of this Article
XIII, the term "Participant" shall mean an active Participant,
a Former Participant, a Beneficiary who is a "party in
interest" [within the meaning of Section 3(14) of ERISA] or an
Employee who has not yet met the eligibility provisions of
Article III but who has made a Rollover Contribution pursuant
to Section 4.9.
13.2 Amount and Limitations Applicable to Loans. A
Participant may request a loan in an amount which does not
exceed (i) 50% of the present value of the Participant's
vested interest in the Plan determined in accordance with
Section 13.8 hereof or, if less, (ii) $50,000 reduced by the
highest outstanding loan balance applicable to the Participant
from this Plan and any other qualified plan of the Company or
an Affiliated Company during the one year period ending on the
day before the loan date. The minimum amount that may be
borrowed from the Plan is $1,000 and only two loans may be
outstanding under the Plan at any one time. It is intended
that loans granted to a Participant under this Article XIII
will not place other Participants at risk with respect to
their Accounts. Therefore, each loan shall be made from the
borrower's Account and the income or loss associated with the
loan shall be allocated to the borrower's Account.
A loan to a Participant (and interest thereon) shall be
considered a Plan investment, and repayments shall be credited
to an Investment Fund or Funds in accordance with Article IX
as if such repayments were future Tax Reduction Contributions,
Investment Plan Contributions, Matching Company Contributions
and/or Rollover Contributions, as the case might be, made to
the Plan on behalf of the Participant.
13.3 Security for Loans. Any loan to a Participant under
this Article XIII shall be secured by the irrevocable pledge
and assignment of 50% of the present value, determined at the
time the loan is granted based on the most recently completed
Valuation Date, of the Participant s vested interest in the
Trust, supported by the execution of a promissory note for the
amount of the loan, including interest, payable to the order
of the Trustee. If the loan will be used to acquire or
construct a dwelling unit which is within a reasonable period
of time to be used as the principal residence of the
Participant the Committee may permit or require the
Participant to secure such loan with assets in addition to 50%
of the Participant's interest in the Trust.
13.4 Interest Rate for Loans. Each loan shall bear
interest at a rate fixed by the Committee based on rates
charged by the financial institutions in the same geographic
location for similar secured personal loans. The loan rate
shall remain fixed for the term of the loan (or the remaining
term of a renegotiated loan). The Committee shall not
discriminate among Participants in the manner of interest
rates but loans granted at different times may bear different
interest rates if, in the opinion of the Committee, the
difference in rates is justified by a change in general
economic conditions.
13.5 Repayment of Loans. (a) Any loan to a Participant
under this Article XIII shall be repaid within five years of
the date on which the loan is made, except that loans used to
acquire or construct any dwelling unit which is within a
reasonable time to be used as a principal residence of the
Participant may be repaid over a longer period of time (not to
exceed 25 years) as determined by the Committee; provided,
however, that any loan shall be repaid (or offset against the
Participant's Account) on or before the date the Participant
receives his final distribution from the Plan. Loans shall be
amortized on a level basis and repaid in regular,
substantially equal installments by payroll deduction (or, if
the Participant is not receiving pay from the Employer at any
time while a loan is outstanding, by direct payment from the
Participant to the Employer for deposit in the Trust Fund) on
a schedule prescribed by the Committee (with payments made at
least as often as quarterly), which installments shall be
applied to reduce the principal as well as the accrued
interest of the loan. Notwithstanding the preceding provisions
of this Section 13.5(a) for periods commencing on and after
September 9, 1994, a Participant shall not be required to make
payments on a level amortization basis during any period the
Participant is on leave of absence from the Employer without
pay for up to one year.
(b) Each loan repayment shall be paid to the Trustee,
and the Committee shall provide written instructions to be
Recordkeeper regarding such repayment that:
(i) identify the Participant on whose behalf the
repayment is being made; and
(ii) direct the investment of the loan repayment to the
Investment Fund account in the same proportion as
elected by the Participant in Section 9.5 as if the
repayment were future contributions.
13.6 Default on Loans. In the event of a default by a
Participant on a loan repayment, all remaining repayments on
the loan shall be immediately due and payable, and the entire
amount of the unpaid balance of such loan and accrued interest
thereon shall be considered and treated as having been
distributed in cash under Article XI as of the date of
default, and an appropriate adjustment of his Account shall be
made therefor. Notwithstanding the foregoing, the Committee
may use alternative means to pursue payment of a loan in
default if such alternative means are necessary to prevent an
actual distribution from the portion of the Participant's
Account that is attributable to Tax Reduction Contributions
and that would contravene Section 401(k) of the Code;
provided, however, that a taxable distribution for purposes of
Section 72(p) of the Code shall occur in the event of any
default by a Participant on a loan made under this Article
XIII.
13.7 Acceleration of Loans Upon Termination of
Employment. All loans shall be accelerated and immediately
due and payable upon a Participant's termination of employment
with the Employer [unless such Participant is a "party in
interest" as defined in Section 3(14) of ERISA or is otherwise
mandatorily eligible for Plan loans under ERISA, the Code or
regulations and rulings promulgated thereunder]. If a
Participant does not repay the loan at the time of
acceleration, the Committee shall direct the Recordkeeper to
offset the nonforfeitable portion of the Participant's
Accounts by the outstanding amount of the loan and such offset
shall reduce the amount payable to the Participant from the
Trust Fund.
13.8 Manner of Making Loans. All requests by a
Participant for loans from the Trust shall be made in writing
to the Committee and if the request is received on or before
the 25th day of a month, the loan amount shall be paid to the
Participant as soon as administratively practicable after the
first day of the next month, based on the value of the
Participant's Account as of the preceding Valuation Date,
adjusted to reflect the value of the Participant's interest,
if any, in the Zurn Stock Fund, the U.S. Industries Stock Fund
and the Household International, Inc. Common Stock Fund as of
the 25th day of the month immediately following such Valuation
Date. Notwithstanding the foregoing provisions of this Section
13.8, if a Participant repays a loan made to him pursuant to
this Article XIII, he may not apply for another loan from the
Trust prior to the expiration of two months from the date of
such repayment. The Committee shall apply its standards for
the approval of loans in a uniform and consistent manner with
respect to all Participants and shall approve a loan if the
requirements of this Article XIII are satisfied. If a
Participant's request for a loan is approved by the Committee,
the Committee shall furnish the Trustee with written
instructions directing the Trustee to make the loan in a
single sum payment in cash to the Participant. Such payment
shall be made by withdrawing as of the Valuation Date for
which the loan is made amounts from the Investment Funds as
designated by the Participation accordance with rules
established by the Committee from time to time or if the
Participant fails to designate Investment Funds to be used to
fund the loan, by withdrawing as of the Valuation Date for
which the loan is made a proportionate amount from the
separate Investment Funds of the Participant under the Plan.
No loan shall be granted hereunder if at the time the loan is
to be granted it would be treated as a distribution under
Section 72(p) of the Code. Notwithstanding the foregoing
provisions of this Section 13.8, that portion of a
Participant s Account which is attributable to Matching
Company Contributions and TRIP+ Contributions made with
respect to calendar quarters ending on and after June 30, 1997
shall not be available for withdrawal in connection with a
loan under the Plan unless the Participant has attained age 57
as of the first day of the month in which the loan amount is
to be paid to the Participant.
13.9 Additional Loan Procedures. For purposes of
satisfying the requirements of Section 2550.408b-l(d) of the
Labor Regulations, the Committee may adopt written loan
policies and procedures to supplement or, if appropriate,
modify the provisions of this Article XIII. Such policies and
procedures, upon adoption by the Committee, shall be
incorporated in the Plan by this reference as if fully set
forth herein. The Committee shall have the power to amend and
modify such policies and procedures at anytime in the
Committee's sole discretion.
ARTICLE XIV
ADMINISTRATION OF THE PLAN
14.1 Allocation of Responsibilities Among Fiduciaries. A
fiduciary with respect to the Plan, as described in Section
3(21) of ERISA, shall have only those specific powers, duties,
responsibilities and obligations as are explicitly given such
fiduciary under the terms of the Plan and the Trust Agreement
or allocated to such fiduciary pursuant to the procedures set
forth herein. In general, Zurn shall have the sole authority
to amend or terminate, in whole or in part, the Plan or the
Trust Agreement, subject to the provisions of Article XVI. The
Board of Directors shall have the sole authority to appoint
and remove the members of the Committee. The Employer shall
have the sole responsibility for making contributions to the
Plan. Zurn shall be the administrator of the Plan as described
in Section 3(16)(A) of ERISA and, except as otherwise provided
herein, Zurn shall have all the duties and responsibilities of
an administrator for purposes of ERISA. Except as otherwise
provided herein or subsequently delegated to other persons
pursuant to the provisions hereof, the Committee shall possess
general authority to manage the operation and administration
of the Plan. The Committee may designate one or more
individuals or committees of individuals to carry out any of
its fiduciary responsibilities in connection with the Plan.
Any such designation may be made by action of the Committee or
by a member or members duly authorized by the Committee to
make such designation on behalf of the Committee. Any
designation, or revocation thereof, made by the Committee or
be such authorized Committee member shall be made in writing,
shall specify the responsibilities which the designee is to
carry out and shall be filed with the Secretary of the
Committee, from whom the names and Committee assignments, if
any, of all individuals so designated and of any Committee
member authorized to make such designations shall be
available. Subject to Participants investment directions
under Section 9.5, and subject to Committee directions under
Section 14.3, the Trustee shall have the sole responsibility
for the administration of the Trust and the management of the
assets held thereunder, as provided in the Trusts Agreement.
It is intended that each fiduciary shall be responsible only
for the proper exercise of his own powers, duties,
responsibilities and obligations under the Plan and shall not
be responsible for any act or failure to act of another
fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan and any fiduciary to the
Plan may also be an Employee. The Committee may employ one or
more persons to render advice to any director, officer or
Employee with respect to such individual s responsibilities
under the Plan. No fiduciary of the Plan guarantees the Trust
Fund in any manner against investment loss or depreciation in
asset value.
14.2 Management of Plan Assets. The amounts allocated
under this Plan shall be held in trust pursuant to the terms
of the Trust Agreement by a Trustee or Trustees appointed by
the Committee, provided that a portion of such amounts may be
held directly by one or more insurance companies appointed by
the Committee under one or more individual or group insurance
contracts. The aggregate of the amounts so contributed to the
Plan and held by the Trustee and such insurance companies as
may be acting at any time, together with any income, gains and
profits thereon, less losses, distributions and other
permissible payments therefrom, shall constitute a Trust Fund
for the payment of benefits under the Plan. The Committee
shall review the performance of the Trustee from time to time
and the Committee shall determine the form and terms of any
insurance company contract to accomplish the purposes of the
Plan. The Committee may remove any Trustee and may terminate
any insurance contract, to the extent permitted by the terms
hereof, the terms of the Trust Agreement and the terms of the
insurance contract.
The Trustee shall have exclusive responsibility for the
management and control of the portion of the Trust Fund held
in trust by it, except as provided in Section 14.3 and except
to the extent that the Committee delegates such responsibility
to one or more persons who are "investment managers"[within
the meaning of Section 3(38) of ERISA], each of whom shall be
either
(a) registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Act");
(b) a bank, as defined in the Act; or
(c) an insurance company qualified to perform investment
management services under the laws of more than one state.
Any insurance company which holds a portion of the Trust Fund
directly shall have exclusive responsibility for the
management and control of such portion of the Trust Fund. The
names of each Trustee, insurance company and investment
manager acting at any time hereunder shall be available from
the Committee.
14.3 Powers and Responsibilities of the Committee. In
addition to any other powers and responsibilities allocated to
the Committee pursuant to the terms of this Plan, the
following powers and responsibilities shall be exercised by
the Committee, the members of which shall be appointed by, and
serve at the pleasure of, the Board of Directors.
(a) To administer the Plan, including but not limited
to, the power to resolve any and all disputes which may arise
involving Participants, Former Participants, Beneficiaries
and/or the Trustee. The Committee shall have the exclusive
discretionary authority to interpret and construe the terms of
the Plan and the Trust Agreement and the exclusive
discretionary authority to determine eligibility for all
benefits hereunder. Any such determinations or interpretations
of the Plan adopted by the Committee shall be final and
conclusive and shall bind all parties. The Trustee may rely
upon the decision of the Committee with respect to any
question concerning the meaning, interpretation, or
application of any provision of the Plan and the Trust
Agreement. The Committee's interpretations and determinations
with respect to the Plan and the Trust Agreement shall be
based on such information as is reasonably available to the
Committee at the time a decision is made. In addition, in
administering the Plan, the Committee may rely conclusively
upon an Affiliated Company's payroll and personnel records
maintained in the ordinary course of business.
(b) To administer the Plan's claims procedure pursuant
to Section 11.7 in a uniform and nondiscriminatory manner.
(c) To adopt such rules, forms and procedures as it
shall deem necessary for the efficient administration of the
Plan in accordance with its terms and the terms of any
applicable law.
(d) To prepare and submit to governmental agencies,
Participants, Former Participants and Beneficiaries such Plan
descriptions, reports and other documents, or summaries
thereof, as may be required by applicable law or necessary in
the administration of the Plan.
(e) To remedy possible ambiguities, inconsistencies or
omissions in connection with its power to interpret the Plan;
provided, however, that all such actions and decisions shall
be applied in a uniform manner to all Employees similarly
situated.
(f) To authorize disbursements from the Trust, including
refunds of contributions permitted by the Plan (any
instructions of the Committee to the Trustee shall be
evidenced in writing and signed by a member of the Committee
delegated with such authority by a majority of the Committee).
(g) To employ such advisors (including but not limited
to attorneys, independent public accountants and investment
advisors) and such other technical and clerical personnel as
may be required in the Committee's discretion for the proper
administration of the Plan, and to pay the reasonable expenses
of such persons from the Trust Fund.
(h) To establish and to instruct the Trustee and any
investment manager with respect to asset administration
objectives and policies consistent with Plan requirements and
establish Investment Funds in accordance with such objectives
and policies.
(i) To review from time to time, but at least as often
as annually, the investment performance of the Trustee and any
insurance company or investment manager acting with respect to
any portion of the Trust Fund. The Committee may engage the
services of such persons it deems appropriate including,
investment managers, to review investments held by the Plan
and the financial condition of insurance companies issuing
insurance contracts to the Plan.
(j) To supervise at least one audit of the Plan's assets
for each Plan Year and review the Trustee's annual accounting.
(k) To exclude Affiliated Companies from participation
in the Plan.
Each of the members of the Committee is hereby authorized
to sign documents relating to the Plan required by the
Department of Labor, Internal Revenue Service or other
governmental agencies on behalf of the Company provided,
however, that the Company shall have the responsibility and
duty to file reports required by any governmental agency with
respect to the Plan and to comply with all other filing and
disclosure requirements required by ERISA in connection with
the administration of the Plan. Notwithstanding any other
provisions of this Section 14.3, no member of the Committee
shall vote or act upon any matter involving his own rights,
benefits, or participation in the Plan.
14.4 Operation of Committee. The Committee may act by a
majority of its members present at a meeting at which at least
half the members are present or by a unanimous written
decision taken without a meeting. The Board of Directors may
remove any member of the Committee at any time and a member
may resign by written notice to the Board of Directors. If at
any time the minimum number of Committee members has not been
designated by the Board of Directors, then the Committee
member or members designated and acting at such time shall be
deemed to constitute the full membership of the Committee. The
Committee may appoint a chairman, a secretary and such other
agents and representatives (who may, but need not, be members
thereof) as it may deem advisable to keep its records or
otherwise to assist it in the performance of its
responsibilities. The Committee may engage agents to assist it
and may engage legal counsel who may be legal counsel for the
Company. All reasonable expenses incurred by the Committee may
be paid from the Trust Fund to the extent not paid by the
Employer.
14.5 Compensation and Expenses of Employees and Directors
Serving as Fiduciaries. The members of the Committee and
employees, officers and directors of Affiliated Companies who
are designated as fiduciaries with respect to the Plan shall
serve without compensation for their services, but all
reasonable expenses of the Committee, the members thereof and
such other individuals incurred in the performance of their
duties and responsibilities under the Plan shall be paid out
of the Trust Fund unless paid by the Employer.
14.6 Indemnification of Employees and Directors. The
Company hereby indemnifies each member of the Committee and
each employee, officer and director of an Affiliated Company
who are delegated responsibilities under or pursuant to the
Plan against any and all liabilities and expenses, including
attorney's fees, actually and reasonably incurred by them in
connection with any threatened, pending or completed legal
action or judicial or administrative proceeding to which they
may be a party, or may be threatened to be made a party, by
reason of membership on the Committee or other delegation of
responsibilities, except with regard to any matters as to
which they shall be adjudged in such action or proceeding to
be liable for gross negligence or willful misconduct in
connection therewith. In addition, the Company may provide
appropriate insurance coverage for the members of the
Committee or each such other individual indemnified pursuant
to this Section 14.6 who is not otherwise appropriately
insured.
14.7 Action Taken in Good Faith. To the extent permitted
by ERISA, the members of the Committee and each employee,
officer and director of an Affiliated Company who are
fiduciaries with respect to the Plan shall be entitled to rely
upon, and be fully protected with respect to any action taken
or suffered by them in good faith in reliance upon, all
tables, valuations, certificates, reports and opinions
furnished by the Recordkeeper, the Trustee, or any accountant,
attorney, insurance company or investment manager acting at
any time hereunder.
14.8 Expenses of the Plan. The expenses of administering
the Plan, other than the compensation of persons on the
payroll of an Affiliated Company, but including fees of the
Trustee, counsel, accountants or other experts appointed under
the Plan, at the direction of the Committee may be paid from
any forfeitures which arise under the Plan, and to the extent
expenses are not paid from forfeitures, they shall be paid out
of the Trust Fund to the extent not paid by the Employer.
ARTICLE XV
TRUST FUND
15.1 Establishment of Trust Fund. The Trustee appointed
by the Committee shall accept and receipt for all assets
transferred to it as Trustee. All assets so received, together
with the income therefrom and any other increment thereon, as
well as assets held in the Trust as of the Effective Date,
shall constitute the Trust Fund and shall be held, managed and
administered by the Trustee, pursuant to the terms of the
Trust Agreement. The Trustee shall not be responsible for the
collection of any contributions pursuant to the terms of the
Plan but shall be accountable only for cash or other property
actually received by the Trustee and for the administration
thereof in accordance with the terms of the Trust Agreement.
15.2 Investments in Employer Stock. All investments by
the Trustee in shares of Zurn Stock or U.S. Industries Stock
shall be made in such a manner to comply with all applicable
federal and state securities laws and the provisions of ERISA
and the Code. Up to 100% of the assets of the Trust Fund may
be invested in shares of Zurn Stock (or, after consummation of
the USI Merger Transaction, in shares of U.S. Industries
Stock).
15.3 Title of Trust Assets. The legal and equitable
title and ownership of all assets at any time constituting a
part of the Trust Fund shall be and remain with the Trustee,
and neither the Company, or any Employer nor any Participant,
Former Participant or Beneficiary shall ever have any legal or
equitable estate therein, save and except that each
Participant, Former Participant and Beneficiary shall be
entitled to receive distributions as and when lawfully made
under the terms of the Plan.
ARTICLE XVI
AMENDMENT AND TERMINATION
16.1 Amendment. Zurn, acting through its Board of
Directors, may at any time, and from time to time, modify or
amend this Plan in whole or in part, or discontinue or modify
Employer contributions to the Plan; provided, however, that
except to the extent required or permitted by the Code or
other applicable law, the accrued benefit of any Participant,
Former Participant or Beneficiary shall not be affected
retroactively by any such action. No amendment of the Plan
shall authorize or permit any part of the Trust Fund to be
used for or diverted to purposes other than for the exclusive
benefit of the Participants or their Beneficiaries, and no
amendment shall be made or shall be valid if it would result
in the Plan's disqualification under the applicable provisions
of the Code.
16.2 Termination or Discontinuance of Contributions. The
Board of Directors may at any time terminate or partially
terminate this Plan or permanently discontinue contributions
hereunder. Upon termination or partial termination of the Plan
with respect to a group of Participants or complete
discontinuance of contributions to the Plan, any amount of the
Trust Fund previously unallocated, including any amounts in a
suspense account established under Section 8.3, shall be
allocated (unless such allocation would violate Section 8.1),
and the Accounts of all affected Participants shall thereupon
be and become fully vested and nonforfeitable to the extent
then funded. The Trustee shall deduct from the Trust Fund all
unpaid charges and expenses including those relating to said
termination, except as the same may be paid by an Employer.
The Trustee shall then adjust the balance of all Accounts on
the basis of the net value of the Trust Fund. The Trustee
shall distribute the amount to the credit of each Participant,
Former Participant, and Beneficiary when all appropriate
administrative procedures have been completed. If any amount
in a suspense account shall not be allocable because of the
provisions of Section 8.1, such amount shall be returned to
the Employer. Upon any complete discontinuance of
contributions by an Employer, the assets of the Trust Fund
shall be held and administered by the Trustee for the benefit
of the Participants employed by such Employer discontinuing
contributions in the same manner and with the same powers,
rights, duties and privileges herein described until the Trust
Fund with respect to such Employer has been fully distributed.
16.3 Distribution on Plan Termination. Except as
provided in the next sentence, if no other defined
contribution plan [other than an employee stock ownership plan
as defined in Section 4975(e)(7) of the Code or a simplified
employee pension plan as defined in Section 408(k) of the
Code] is maintained by the Company or any other Affiliated
Company as of the Plan termination date, the Trustee shall
distribute each Participant's entire Account in a single lump
sum distribution to him, or to an eligible retirement plan as
defined in Section 402(c)(8)(B) of the Code pursuant to the
Participant s direct rollover election described in Section
11.11, as soon as administratively practicable after the later
of (i) the termination date of the Plan or (ii) the receipt
following application of a favorable determination letter from
the Internal Revenue Service with respect to the termination
of the Plan. If the Participant either fails or refuses to
consent in writing to the distribution upon termination of the
Plan, the Trustee shall use the balance of the Participant's
Account to purchase a deferred annuity satisfying the
requirements of Article XI and providing for commencement of
the Participant's benefits at age 65 and distribute such
annuity contract to the Participant. If, however, the Company
or any Affiliated Company maintains another defined
contribution plan [other than an employee stock ownership plan
as defined in Section 497S(e)(7) of the Code or a simplified
employee pension plan as defined in Section 408(k) of the
Code] as of the Plan termination date, then except as provided
in the next sentence, each Participant's entire Account shall
either (i) be transferred by the Trustee, without the
Participant's consent, to such other defined contribution plan
provided, however, that no such transfer may result in the
elimination or reduction of a Plan benefit of the Participant
protected under Section 411(d)(6) of the Code, unless the
transfer satisfies the requirements of Q&A-3(b) of the
Treasury Regulations, or (ii) be used to purchase a deferred
annuity satisfying the requirements of Article XI and
providing for commencement of benefits at age 65 and such
annuity contract shall be distributed to the Participant. A
Participant may request in writing that the Trustee distribute
his Account, excluding the balance attributable to his Tax
Reduction Contribution Account, unless distribution of such
account would be permitted under Section 401(k)(2)(B) of the
Code and the applicable Treasury regulations thereunder, in a
single lump sum distribution to him, or to an eligible
retirement plan as defined in Section 402(c)(8)(B) of the Code
pursuant to the Participant's direct rollover election
described in Section 11.11, as soon as administratively
practicable after the later of (i) the termination date of the
Plan or (ii) the receipt following application of a favorable
determination letter from the Internal Revenue Service with
respect to the termination of the Plan.
16.4 Distributions upon Certain Sales. A single sum
distribution may be made from the Plan to any Participant, or
to an eligible retirement plan as defined in Section
402(c)(8)(B) of the Code pursuant to the Participant's direct
rollover election described in Section 11.11, affected by (i)
a disposition by an Employer of substantially all of the
assets used by the Employer in a trade or business, but only
if the Participant continues employment with the corporation
acquiring such assets or (ii) a disposition by an Employer of
its interest in a subsidiary, but only if the Participant
continues employment with such subsidiary.
16.5 Merger or Consolidation of Plan. In the event of
any merger or consolidation of the Plan with, or transfer in
whole or in part of the assets and liabilities of the Trust
Fund to, another trust fund held under any other plan of
deferred compensation maintained or to be established for the
benefit of all or some of the Participants in this Plan, the
assets of the Trust Fund applicable to such Participants shall
be transferred to the other trust fund only if:
(a) each Participant would (if either this Plan or the
other plan had then terminated) receive a benefit immediately
after the merger, consolidation, or transfer which is equal to
or greater than the benefit he would have been entitled to
receive immediately before the merger, consolidation, or
transfer (if this Plan had then terminated); and
(b) such other plan and trust fund are qualified under
Section 401(a) of the Code and exempt from tax under Section
501(a)of the Code.
16.6 Merger and Other Reorganization of Employer. A
merger, consolidation, similar corporation change, or sale
which results in the transfer of substantially all the assets
and Employees of the Company or an Employer to a successor
corporation shall constitute a total or partial termination of
the Plan unless, and except to the extent that the Board of
Directors shall adopt a resolution consenting to the
continuance of the Plan and specifying appropriate amendments
and conditions applicable to such continuance.
ARTICLE XVII
MISCELLANEOUS
17.1 No Employment or Compensation Agreement. Nothing
contained in the Plan shall be construed as giving any person
or entity any legal or equitable right against the Company,
any Employer, any Affiliated Company, their stockholders or
partners, officers or directors, the Named Fiduciary, or the
Trustee, except as the same shall be specifically provided in
the Plan. Nor shall anything in the Plan give any Participant
or other Employee the right to be retained in the service of
an Employer. The employment of all persons by an Employer
shall remain subject to termination by such Employer to the
same extent as if the Plan had never been executed.
17.2 Spendthrift Provision. Except as provided under
Article XIII with respect to participant loans, by the terms
of a Qualified Domestic Relations Order, or as permitted
pursuant to Section 401(a)(13) of the Code, no Participant,
Former Participant, or Beneficiary shall have the right to
assign, alienate or transfer his interest hereunder, nor shall
his interest be subject to claim of his creditors or others,
it being understood that all provisions of the Plan shall be
for the exclusive benefit of those designated herein.
17.3 Construction. It is the intention of each Employer
that the Plan be qualified under Section 401 of the Code and
comply with the applicable provisions of ERISA, and all
provisions hereof shall be construed to that result.
17.4 Titles. Titles of Articles and Sections hereof are
for convenience only and shall not be considered in construing
the Plan.
17.5 Texas Law Applicable. The Plan and each of its
provisions shall be construed and their validity determined by
the laws of the State of Texas to the extent not preempted by
ERISA or other applicable federal law.
17.6 Successors and Assigns. The Plan shall be binding
upon the successors and assigns of the Company and each
Employer and the Trustee and upon the heirs and personal
representatives of those individuals who become Participants
hereunder.
17.7 Payments Only from Trust Fund. All benefits of the
Plan shall be payable solely from the Trust Fund and neither
the Employer, the Committee, nor the Trustee shall have any
liability or responsibility therefor except as expressly
provided herein.
17.8 Plan Controls. The Trust Agreement is a part of the
Plan. In case of any inconsistency between the terms of the
Plan and the Trust Agreement, the provisions of the Plan shall
control. In the event of any conflict between the terms of
the Plan and any summary thereof or other document relating
thereto, from whatever a source, the terms of the Plan shall
govern.
17.9 Effect of Mistakes. In the event of a mistake or
misstatement as to the age or eligibility of any person, the
service to be credited to any person, or the amount of any
kind of contributions, withdrawals or distributions made or to
be made to a Participant, or other person, the Committee
shall, to the extent it deems possible, make such adjustment
as will in its judgment afford to such person the credits,
service, distributions or other rights to which he is properly
entitled under the Plan.
17.10 IRC 414(u) Compliance Provision.
Notwithstanding any provision of the Plan to the contrary and
effective on and after October 13, 1996, contributions
benefits and service credit with respect to qualified military
service shall be provided in accordance with Section 414(u) of
the Code.
ARTICLE XVIII
TOP HEAVY PROVISIONS
18.1 Application and Purpose. The following special
provisions shall apply to determine if the Plan is a Top Heavy
Plan in accordance with Section 416 of the Code and special
rules that will apply based on the Plan's status as a Top
Heavy Plan. In the event that the provisions contained in this
Article are inconsistent with the terms contained in the
remainder of the Plan, the provisions of this Article shall
take precedence over such other terms of the Plan.
18.2 Minimum Allocation Requirements. For any Plan Year
in which the Plan is a Top Heavy Plan, each Employee who on
the last day of such Plan Year (i) is a Non Key Employee who
has satisfied the eligibility requirements of Section 3.1
(regardless of whether he will have Tax Reduction
Contributions or Investment Plan Contributions made on his
behalf to the Plan for the Plan Year) and (ii) does not
participate in a defined benefit plan maintained by an
Employer or an Affiliated Company that provides that the
minimum benefit applicable to top heavy plans will be
satisfied in such other plan, shall receive a minimum
allocation of Employer contributions (excluding, for Plan
Years beginning after December 31, 1988, Tax Reduction
Contributions and Matching Company Contributions that are used
to satisfy the Contribution Percentage tests of Section 6.1)
equal to the lesser of (x) three percent of such Participant's
Compensation or (y) the largest percentage of Employer
contributions (including, for Plan Years beginning after
December 31, 1988, Tax Reduction Contributions and Matching
Company Contributions) made to the Plan for the Plan Year, as
a percentage of the first $200,000 (or such other amount equal
to the Compensation Limitation as defined in Section 2.13) of
the Compensation of Participants who are Key Employees
allocated to any such Participant who is a Key Employee for
that Plan Year; provided, however that if the Plan is part of
a Required Aggregation Group and the Plan enables a defined
benefit plan that is included in the same Required Aggregation
Group to meet the requirements of Sections 401(a)(4) or 410 of
the Code, clause (y) above shall not apply.
18.3 Adjustment to Limitation on Allocations. For any
Plan Year in which the Plan is a Top Heavy Plan, the
provisions of Article VIII hereof shall be adjusted in
accordance with the provisions of Section 416(h) of the Code
which are by this reference incorporated herein.
18.4 Vesting Schedule. For any Plan Year in which the
Plan is a Top Heavy Plan, the following provisions shall be
applicable to the Plan:
(a) Except as provided in Section 18.4(b) below, each
Participant shall be entitled (as a vested interest) to
receive the greater of the vested interest calculated pursuant
to any other provision of the Plan or a percentage of the then
combined balance to his credit in his Accounts and determined
in accordance with the following schedule
Years of
Service
Vested
Interest
Less than 3
0%
3 or more
100%
(b) The schedule in Section 18.4(a) above shall not
apply to the Account of any Participant who does not perform
an Hour of Service after the Determination Date on which the
Plan first becomes a Top Heavy Plan.
18.5 Definitions.
(a) "Top Heavy Plan" means the Plan for a Plan Year if
the Plan is the only plan maintained by an Employer and the
top heavy ratio as of the Determination Date exceeds 60%. The
top heavy ratio is a fraction, the numerator of which is the
sum of the present value of the Accounts of all Key Employees
as of the Determination Date, the contributions due as of the
Determination Date, and distributions made within the five-year
period mmediately preceding the Determination Date
(including distributions under a terminated plan which if it
had not been terminated would have been required to be
included in an aggregation group), and the denominator of
which is a similar sum determined for all Employees. The top
heavy ratio shall be calculated without regard to (i) the
Account of a Participant who is not a Key Employee but who was
a Key Employee in a prior Plan Year, (ii) the Account of any
individual who has not performed any services for an Employer
at any time during the five-year period ending on the
Determination Date, and (iii) voluntary deductible Employee
contributions, if any. The top heavy ratio, including
distributions, rollovers and transfers, to the extent such
items must be taken into account, shall be calculated in
accordance with Section 416 of the Code and the regulations
thereunder. If an Employer maintains other qualified plans
(including a simplified employee pension plan) or has ever
maintained one or more defined benefit plans which have
covered or could cover a Participant in this Plan, this Plan
is top heavy for a Plan Year only if it is part of the
Required Aggregation Group, and the top heavy ratio for both
the Required Aggregation Group and the Permissive Aggregation
Group exceeds 60%. The top heavy ratio shall be calculated as
described above, taking into account all plans within the
aggregation group and with reference to Determination Dates
that fall within the same calendar year provided that if a
defined benefit plan is included in the aggregation group, the
present value of accrued benefits (instead of account
balances) oft participants in that plan shall be computed for
purposes of calculating the top heavy ratio. The accrued
benefit under a defined benefit plan in both the numerator and
the denominator of the top heavy ratio are increased for any
distribution of an accrued benefit made in the five-year
period ending on the Determination Date. The accrued benefit
of a Participant other than a Key Employee shall be determined
under (i) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by
the Employer, or (ii) if there is no such method, as if such
benefit accrued not more rapidly than the lowest accrual rate
permitted under the fractional rule Section 411(b)(1)(C) of
the Code. The value of account balances and the present value
of accrued benefits will be determined as of the most recent
Allocation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in
Section 416 of the Code and the Treasury Regulations
thereunder for the first and second plan years of a defined
benefit plan. The actuarial assumptions (interest rate and
mortality only) used by the actuary under the defined benefit
plan shall be used to calculate the present value of accrued
benefits from the defined benefit plan.
(b) "Determination Date" means for any Plan Year the
last day of the preceding Plan Year, or in the case of the
first Plan Year of the Plan, the last day of that Plan Year.
(c) "Required Aggregation Group" means (i) each
qualified plan of an Employer in which at least one Key
Employee participates, and (ii) any other qualified plan of an
Employer which enables a plan described in (i) to meet the
requirements of Sections 401(a)(4) and 410 of the Code.
(d) "Permissive Aggregation Group" means the Required
Aggregation Group plus any other qualified plans maintained by
an Employer which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.<PAGE>
IN WITNESS WHEREOF, Zurn Industries, Inc. has caused this
Plan to be executed this ________ day of
___________________________, 1998, effective as set forth
herein.
ZURN INDUSTRIES, INC.
By:
Title:
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Regis-
tration Statement on Form S-8, pertaining to the U.S. Industries,
Inc. USI Retirement Savings & Investment Plan, USI Corporate
Office Retirement Savings & Investment Plan, The Huron Retirement
Savings & Investment Plan For Employees Represented by UAW Local
213, The Ames Group Retirement Savings & Investment Plan For
Employees Represented by USAW Local 7958, O. Ames Co. Retirement
Savings Plan, Zurn Retirement Savings Plan and Eljer Tax
Reduction Investment Plan, of our report dated November 17, 1997
with respect to the consolidated financial statements and
schedule of U.S. Industries, Inc. included in its Annual Report
on Amendment No. 1 to Form 10-K/A for the year ended September
30, 1997, and of our report dated June 17, 1997, with respect to
the financial statements and schedules of the USI Retirement
Savings & Investment Plan (formerly the U.S. Industries, Inc.
Retirement Savings & Investment Plan) included in its Annual
Report on Form 11-K for the year ended December 31, 1996, both
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
June 9, 1998
EXHIBIT 23.2
CONSENT OF PRICE WATERHOUSE LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated November
14, 1997, which appears on page 26 of the U.S. Industries, Inc.
Annual Report on Form 10-K/A for the year ended September 30,
1997.
PRICE WATERHOUSE LLP
Florham Park, New Jersey
June 10, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Regis-
tration Statement on Form S-8, pertaining to the U.S. Industries,
Inc. USI Retirement Savings & Investment Plan, USI Corporate
Office Retirement Savings & Investment Plan, The Huron Retirement
Savings & Investment Plan For Employees Represented by UAW Local
213, The Ames Group Retirement Savings & Investment Plan For
Employees Represented by USAW Local 7958,
O. Ames Co. Retirement Savings Plan, Zurn Retirement Savings Plan
and
Eljer Tax Reduction Investment Plan, of our report dated May 19,
1997 with respect to the consolidated financial statements and
schedule of Zurn Industries, Inc. included in its Annual Report
on Form 10-K for the year ended March 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Dallas, Texas
June 9, 1998
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in the Registration Statement on Form
S-8 for U.S. Industries, Inc. of our report on the consolidated
financial statements of Eljer Industries, Inc. and subsidiaries
dated February 14, 1997 included on Form 8-K/A dated April 7,
1997 for Zurn Industries, Inc. It should be noted that we have
audited the consolidated financial statements of Eljer
Industries, Inc. and subsidiaries as of and for the three fiscal
years ended December 29, 1996. We have not audited any financial
statements subsequent to December 29, 1996 or performed any audit
procedures subsequent to the date of our report.
ARTHUR ANDERSEN LLP
Dallas, Texas
June 11, 1998
EXHIBIT 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated June 23,
1997, with respect to the O. Ames Co. Retirement Savings Plan for
the year ended December 31, 1996.
Weyer, Weyer & Associates,
A.C.
Parkersburg, West Virginia
June 9, 1998
EXHIBIT 23.6
CONSENT OF THE PASHKE GROUP
We consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reports dated May 21, 1998 with
respect to the financial statements and supplemental schedules
included in the Annual Reports on Form 11-K for the years ended
December 31, 1997 of the Zurn Retirement Savings Plan, the
Zurn/Nepco Retirement Savings Plan and the Eljer Tax Reduction
Retirement Plan.
The Pashke Group
Erie, Pennsylvania
June 11, 1998
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes GEORGE H. MACLEAN his true
and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign a registration
statement on Form S-8 of U.S. Industries, Inc. with respect to:
the USI RETIREMENT SAVINGS & INVESTMENT PLAN,
the USI CORPORATE OFFICE RETIREMENT SAVINGS & INVESTMENT
PLAN,
THE HURON RETIREMENT SAVINGS & INVESTMENT PLAN FOR EMPLOYEES
REPRESENTED BY UAW LOCAL 213,
THE AMES GROUP RETIREMENT SAVINGS & INVESTMENT PLAN FOR
EMPLOYEES REPRESENTED BY USAW LOCAL 7958,
the O. AMES CO. RETIREMENT SAVINGS PLAN,
the ZURN RETIREMENT SAVINGS PLAN and the
ELJER TAX REDUCTION INVESTMENT PLAN
and to sign and file any other documents in connection therewith,
including amendments thereto, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full
power and authority to do and perform each act and thing
requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power
of Attorney as of the 11th day of June 1998.
/s/ David H. Clarke /s/ John G. Raos
David H. Clarke John G. Raos
/s/ Frank R. Reilly /s/ Brian C. Beazer
Frank R. Reilly Brian C. Beazer
/s/ John J. McAtee, Jr. /s/ The Hon. Charles H.
Price II John J. McAtee, Jr. The Hon. Charles
H. Price II
/s/ Harry Solomon /s/ Royall Victor III
Sir Harry Solomon Royall Victor III
/s/ Mark Vorder Bruegge /s/ Robert R. Womack
Mark Vorder Bruegge Robert R. Womack
/s/ William E. Butler /s/ James O'Leary
William E. Butler James O'Leary
