As filed with the Securities and Exchange Commission on Sepember 2, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
INSIGNIA/ESG HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-2084290
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
200 Park Avenue
New York, New York 10166
(Address of principal executive offices) (Zip Code)
Insignia/ESG Holdings, Inc. 401(k) Savings Plan
(Full title of the Plan)
Adam B. Gilbert, Esq.
General Counsel and Secretary
Insignia/ESG Holdings, Inc.
200 Park Avenue
New York, New York 10166
(212) 984-8000
(Name, address and telephone number,
including area code, of agent for service)
-----------------------------------------------------
Copies to:
Arnold S. Jacobs, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
-----------------------------------------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of securities to Amount to Proposed maximum Proposed maximum Amount of
be registered be registered offering price aggregate offering price registration
per share fee
<S> <C> <C> <C> <C> <C> <C>
Common Stock, par 400,000 shares(1) $15.38(2) $6,152,000(2) $1,814.84
value $0.01 per share
</TABLE>
- ----------
(1) Represents the maximum number of shares that may be acquired by the Trustee
under the Insignia/ESG Holdings, Inc. 401(k) Savings Plan.
(2) Solely for purposes of calculating the registration fee pursuant to Rule
457(h)(1) based on the book value per share of Holdings Common Stock as of
June 30, 1998.
<PAGE>
In addition, pursuant to Rule 416(c) promulgated under the Securities Act of
1933, as amended, this Registration Statement also covers an indeterminate
amount of interests to be offered or sold pursuant to the Insignia/ESG Holdings,
Inc. 401(k) Savings Plan.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference.
The Registration Statement on Form 10 of Insignia/ESG Holdings, Inc.
(the "Corporation"), filed with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, as amended, is incorporated herein by
reference.
All documents subsequently filed by the Corporation pursuant to
Sections 13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, as
amended, 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 hereof from the date of filing such
documents. Any statement in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superceded 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 supercedes such statement. Any
statement so modified or superceded shall not be deemed, except as so modified
or superceded, to constitute part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Corporation 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 Tenth of
the Certificate of Incorporation of the Corporation provides for indemnification
of directors and
<PAGE>
officers to the fullest extent permitted by the General Corporation Law of the
State of Delaware, and the Corporation has entered into five agreements with its
executive officers and all of its directors with respect to such
indemnification. Reference is made to the Certificate of Incorporation of the
Corporation and such agreements, incorporated by reference as Exhibits 3.1 and
10.18, respectively, to the Corporation's Registration Statement on Form 10.
The Indemnification Agreements entered into by the Corporation with
all of its directors and five of its executive officers are based on the
provisions of the General Corporation Law of the State of Delaware, which are
contained primarily in Section 145 of the General Corporation Law of the State
of Delaware, but is intended to provide broader indemnification than that which
is specifically provided by Section 145. The Indemnification Agreements provide
generally that the Corporation will to the fullest extent permitted by
applicable law indemnify the director or executive officer against expenses
arising from any event or occurrence, either prior to or after the time the
Indemnification Agreement is executed, related to the fact that such person is
or was serving as a director or executive officer of the Corporation (or of
another entity at the Corporation's request).
The Corporation currently has Directors and Officers Liability
Insurance Policies (the "Policies") in place with Executive Risk Speciality
Insurance Company and Chubb Insurance Company. The Policies are a "claims made"
policies with a $20,000,000 aggregate. However, the Board of Directors believes
that it serves the Corporation's best interest to supplement this coverage or
any coverage which the Corporation may maintain in the future by agreeing by
contract to indemnify directors and executive officers to the fullest extent
permitted under applicable law.
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 transactions from which the director derived an
improper personal benefit. Article Eleventh of the Corporation's Certificate of
Incorporation contains such a provision.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Insignia/ESG Holdings, Inc. 401(k) Savings Plan.
<PAGE>
5 Opinion of Proskauer Rose LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of PricewaterhouseCoopers LLP.
23.3 Consent of Plante & Moran, LLP.
23.4 Consent of Beers & Cutler PLLC.
23.5 Consent of BDO Stoy Hayward.
23.6 Consent of Proskauer Rose LLP (included in Exhibit 5).
24 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;
(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.
(2) That, for the purposes of determining 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 (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.
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the 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.
The undersigned registrant hereby undertakes to submit the
Insignia/ESG Holdings, Inc. 401(k) Savings Plan to the Internal Revenue Service
(the "IRS") and any amendments thereto in a timely manner and will make all
changes required by the IRS in order to obtain the qualification of the
Insignia/ESG Holdings, Inc. 401(k) Savings Plan under Sections 401(a) and 401(k)
of the Internal Revenue Code of 1986, as amended.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 2nd day of
September, 1998.
INSIGNIA/ESG HOLDINGS, INC.
By: /s/ Andrew L. Farkas
--------------------
Andrew L. Farkas
Chairman and
Chief Executive Officer
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.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Andrew L. Farkas
- ---------------------- Chief Executive Officer and Director September 1, 1998
Andrew L. Farkas (Principal Executive Officer)
/s/ James A. Aston
- ---------------------- Chief Financial Officer September 1, 1998
James A. Aston (Principal Accounting Officer)
/s/ Robert J. Denison
- ---------------------- Director August 31, 1998
Robert J. Denison
/s/ Robin L. Farkas Director August 28, 1998
- --------------------
Robin L. Farkas
______________________ Director _______, 1998
Andrew J.M. Huntley
/s/ Robert G. Koen
- ------------------- Director September 1, 1998
Robert G. Koen
/s/ Stephen B. Siegel Director September 1, 1998
- ----------------------
Stephen B. Siegel
/s/ H. Strauss Zelnick Director September 1, 1998
- -----------------------
H. Strauss Zelnick
</TABLE>
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
Insignia/ESG Holdings, Inc., the administrator of the Insignia/ESG Holdings,
Inc. 401(k) Savings Plan has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of New York, the State of New York, on September 1, 1998.
Insignia/ESG Holdings, Inc.
By:/s/ Ronald Uretta
------------------
Name: Ronald Uretta
Title: Chief Operating
Officer and Member
of 401(k) Savings
Plan Comittee
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) of Insignia/ESG Holdings, Inc. ("Holdings") pertaining to
the Insignia/ESG Holdings, Inc. 401(k) Plan of our report dated April 22, 1998
with respect to the combined financial statements of the Insignia Financial
Group, inc. entities to be spun-off into Insignia/ESG Holdings, Inc. as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997, included in the Holdings Registration Statement on Form 10,
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
August 28, 1998
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) filed by Insignia/ESG Holdings, Inc. ("Holdings")
pertaining to the registration of 400,000 shares of Common Stock, par value $.01
of Holdings, which may be issued in connection with Holdings employees'
participation in the Insignia/ESG Holdings, Inc. 401(k) Plan of our report dated
April 1, 1996 on our audits of combined statements of operations and cash flows
of Edward S. Gordon Company, Incorporated and Edward S. Gordon Company of New
Jersey, Inc. for the three years ended December 31, 1995, 1994 and 1993,
included in the Holdings Registration Statement on Form 10, filed with the
Securities and Exchange Commission.
/s/ PRICEWATERHOUSECOOPERS LLP
New York, New York
August 31, 1998
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) filed by Insignia/ESG Holdings, Inc. ("Holdings")
pertaining to the registration of 400,000 shares of Common Stock, par value $.01
of Holdings, which may be issued in connection with Holdings employees'
participation in the Insignia/ESG Holdings, Inc. 401(k) Plan of our reports each
dated June 23, 1998 with respect to the audited combined financial statements of
Realty One, Inc. and Affiliated Companies as of September 30, 1997, and for the
nine months then ended and as of December 31, 1996 and 1995 and for the years
then ended, included in the Holdings Registration Statement on Form 10, filed
with the Securities and Exchange Commission.
/s/ PLANTE & MORAN, LLP
Plante & Moran, LLP
Cleveland, Ohio
August 28, 1998
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) filed by Insignia/ESG Holdings, Inc. ("Holdings")
pertaining to the registration of 400,000 shares of Common Stock, par value $.01
of Holdings, which may be issued in connection with Holdings employees'
participation in the Insignia/ESG Holdings, Inc. 401(k) Plan of our report dated
December 5, 1997 with respect to the financial statements of Barnes, Morris,
Pardoe & Foster, Inc., as of January 31, 1997 and for the year then ended; and
our report dated November 11, 1997 with respect to the financial statements of
Barnes, Morris, Pardoe & Foster Management Services, LLC, as of December 31,
1996 and for the year then ended, each included in the Holdings Registration
Statement on Form 10, filed with the Securities and Exchange Commission.
/s/ BEERS & CUTLER PLLC
Washington, DC
September 1, 1998
<PAGE>
Exhibit 23.5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-8) filed by Insignia/ESG Holdings, Inc. ("Holdings")
pertaining to the registration of 400,000 shares of Common Stock, par value $.01
of Holdings, which may be issued in connection with Holdings employees'
participation in the Insignia/ESG Holdings, Inc. 401(k) Plan of our report dated
June 15, 1998 (final paragraph signed as at July 21, 1998), with respect to the
financial statements of Richard Ellis Group Limited as of and for the
eight-month period ended December 31, 1997; of our reports each dated October
23, 1997 (final paragraph signed as at July 21, 1998), with respect to the
financial statements of Richard Ellis Holdings Limited and Richard Ellis as of
April 30, 1997 and for the year then ended; and of our reports each dated
October 22, 1996 (final paragraph signed as at July 21, 1998), with respect to
the financial statements of Richard Ellis Holdings Limited and Richard Ellis as
of April 30, 1996 and for the year then ended, included in the Holdings
Registration Statement on Form 10, filed with the Securities and Exchange
Commission.
/s/ BDO STOY HAYWARD
London, United Kingdom
August 28, 1998
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints Andrew L. Farkas and Adam B. Gilbert, and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, to act, without the other, for him and in his
name, place, and stead, in any and all capacities, to sign a Registration
Statement on Form S-8 of Insignia/ESG Holdings, Inc., and any or all amendments
(including post-effective amendments) thereto, relating to the offering of
shares of its Common Stock, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, their substitute or substitutes
may lawfully do or cause to be done by virtue hereof.
/s/ Andrew L. Farkas /s/ Robert G. Koen
- ---------------------- ----------------------
Andrew L. Farkas Robert G. Koen
/s/ Robin L. Farkas /s/ Stephen B. Siegel
- ---------------------- ----------------------
Robin L. Farkas Stephen B. Siegel
/s/ Robert J. Denison /s/ H. Strauss Zelnick
- ---------------------- ----------------------
Robert J. Denison H. Strauss Zelnick
- ----------------------
Andrew J.M. Huntley
<PAGE>
Exhibit 5
Letterhead of Proskauer Rose LLP
September 1, 1998
Insignia/ESG Holdings, Inc.
200 Park Avenue
New York, New York 10166
Dear Sirs:
We are acting as counsel to Insignia/ESG Holdings, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-8 (the "Registration Statement") filed by the Company under the
Securities Act of 1933 (the "Act") relating to the registration of 400,000
shares (the "Shares") of Common Stock, par value $0.01 per share, of the
Company. The Shares are issuable by the Company under the Insignia/ESG Holdings,
Inc. 401(k) Savings Plan (the "Plan").
We have examined originals or copies, certified or otherwise
authenticated to our satisfaction, of all such corporate records, documents,
agreements and instruments and certificates of public officials and of
representatives of the Company, and have made such investigation of law and
fact, as we have deemed appropriate for purposes of this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that
the Shares are duly authorized and, upon issuance of the Shares in accordance
with the Plan, will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.
Very truly yours,
/s/ Proskauer Rose LLP
INSIGNIA/ESG HOLDINGS, INC. Exhibit 4.1
401(k) RETIREMENT SAVINGS PLAN
Effective September 15, 1998
<PAGE>
Exhibit 4.1
INSIGNIA/ESG HOLDINGS, INC. 401(k)
RETIREMENT SAVINGS PLAN
TABLE OF CONTENTS
PREAMBLE Page
ARTICLE I: DEFINITIONS......................................................1
1.1 "Account" or "Accounts".........................................1
1.2 "Actual Deferral Percentage"....................................1
1.3 "Adjustment Factor".............................................1
1.4 "Affiliated Employer"...........................................1
1.5 "AIMCO".........................................................2
1.6 "AIMCO Common Stock"............................................2
1.7 "Beneficiary"...................................................2
1.8 "Board of Directors"............................................2
1.9 "Break in Service"..............................................2
1.10 "Class E Preferred Stock".......................................3
1.11 "Class F Preferred Stock".......................................3
1.12 "Code"..........................................................3
1.13 "Company".......................................................3
1.14 "Company Stock".................................................3
1.15 "Company Stock Fund"............................................3
1.16 "Committee".....................................................3
1.17 "Compensation"..................................................3
1.18 "Contribution Percentage".......................................4
1.19 "Deferred Account"..............................................5
1.20 "Deferred Cash Contributions"...................................5
1.21 "Deferred Matching Account".....................................5
1.22 "Deferred Matching Contributions"...............................5
1.23 "Disability"....................................................5
1.24 "Early Retirement"..............................................5
1.25 "Earnings"......................................................5
1.26 "Effective Date"................................................5
1.27 "Employee"......................................................5
1.28 "Employer"......................................................6
1.29 "ERISA".........................................................6
1.30 "Enrollment Date"...............................................6
1.31 "Fund" or "Investment Fund".....................................6
1.32 "Grandfathered Stock"...........................................6
1.33 "Grandfathered Stock Funds".....................................6
1.34 "Highly Compensated Employee"...................................6
-i-
<PAGE>
Page
1.35 "Hour of Service"...............................................7
1.36 "IFG"...........................................................8
1.37 "IFG Plan"......................................................8
1.38 "IFG Stock".....................................................8
1.39 "Leased Employee"...............................................8
1.40 "Merger Agreement"..............................................8
1.41 "Normal Retirement".............................................8
1.42 "Participant"...................................................8
1.43 "Plan"..........................................................8
1.44 "Plan Year".....................................................8
1.45 "Profit Sharing Account"........................................8
1.46 "Profit Sharing Contributions"..................................8
1.47 "Rollover Account"..............................................9
1.48 "Rollover Contributions"........................................9
1.49 "Termination of Employment".....................................9
1.50 "Trustee".......................................................9
1.51 "Valuation Date"................................................9
1.52 "Vested Portion"................................................9
1.53 "Year of Service"...............................................9
ARTICLE II: ELIGIBILITY AND PARTICIPATION..................................14
2.1 Eligibility....................................................14
2.2 Effective Date of Participation................................14
2.3 Application for Participation..................................15
2.4 Reemployment of Former Employees and Former Participants.......15
2.5 Transferred Participants.......................................16
2.6 Termination of Participation...................................16
ARTICLE III: CONTRIBUTIONS.................................................17
3.1 Deferred Cash Contributions....................................17
3.2 Deferred Matching Contributions................................18
3.3 Profit Sharing Contributions...................................18
3.4 Participant Rollover Contributions and Transfers...............19
3.5 Change in Contributions........................................20
3.6 Suspension of Contributions....................................20
3.7 Limitations Affecting Highly Compensated Employees.............20
3.8 Maximum Annual Additions.......................................24
3.9 Return of Contributions........................................27
3.10 Contributions Not Contingent Upon Profits......................27
ARTICLE IV: INVESTMENT AUTHORITY AND VALUATION.............................29
4.1 General Scope of Responsibility................................29
-ii-
<PAGE>
Page
4.2 Directed Investment Account....................................29
4.3 Investment Fund Gains and Losses...............................31
ARTICLE V: VALUATION OF THE ACCOUNTS.......................................32
ARTICLE VI: VESTED PORTION OF ACCOUNTS.....................................33
6.1 Deferred Account and Rollover Account..........................33
6.2 Deferred Matching Account and Profit Sharing Account...........33
6.3 Disposition of Forfeitures.....................................34
ARTICLE VII: WITHDRAWALS WHOLE STILL EMPLOYED..............................36
7.1 Withdrawal After Age 59 1/2....................................36
7.2 Hardship Withdrawal............................................36
7.3 Procedures and Restrictions....................................38
ARTICLE VIII: LOANS TO PARTICIPANTS........................................39
8.1 Amount Available...............................................39
8.2 Terms..........................................................40
ARTICLE IX: DISTRIBUTION OF ACCOUNTS UPON
TERMINATION OF EMPLOYMENT...................................................42
9.1 Eligibility....................................................42
9.2 Forms of Distribution..........................................42
9.3 Commencement of Payments.......................................42
9.4 Age 70 1/2 Required Distribution...............................44
9.5 Status of Accounts Pending Distribution........................44
9.6 Proof of Death and Right of Beneficiary or Other Person........44
9.7 Distribution Limitation........................................44
9.8 Rollover Distributions.........................................45
ARTICLE X: ADMINISTRATION OF PLAN..........................................46
10.1 Plan Administration............................................46
10.2 Duties of Committee............................................46
10.3 Individual Accounts............................................46
10.4 Meetings.......................................................46
10.5 Action of Majority.............................................46
10.6 Compensation and Bonding.......................................47
10.7 Establishment of Rules.........................................47
10.8 Prudent Conduct................................................47
10.9 Service in More Than One Fiduciary Capacity....................47
10.10 Limitation of Liability........................................48
10.11 Indemnification................................................48
-iii-
<PAGE>
Page
10.12 Appointment of Investment Manager..............................48
ARTICLE XI: MANAGEMENT OF FUNDS............................................49
11.1 Trust Agreement................................................49
11.2 Exclusive Benefit Rule.........................................49
ARTICLE XII: CLAIMS REVIEW PROCEDURE.......................................50
12.1 Claims Procedure...............................................50
12.2 Claims Review Procedure........................................50
ARTICLE XIII: GENERAL PROVISIONS...........................................51
13.1 Nonalienation..................................................51
13.2 Conditions of Employment Not Affected by Plan..................51
13.3 Facility of Payment............................................52
13.4 Information....................................................52
13.5 Top-Heavy Provisions...........................................52
13.6 Prevention of Escheat..........................................54
13.7 Transfers of Trust Fund Assets.................................54
13.8 Construction...................................................54
13.9 Reemployed Veterans............................................55
13.10 Adjustments for Changes in Capital Structure...................55
13.11 Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")...................................56
13.12 Voting and Other Rights........................................56
ARTICLE XIV: AMENDMENT, MERGER AND TERMINATION.............................57
14.1 Amendment of Plan..............................................57
14.2 Merger, Consolidation, or Transfer.............................57
14.3 Additional Participating Employers.............................57
14.4 Termination of Plan............................................59
14.5 Distribution of Accounts Upon a Sale of Assets.................59
14.6 Distribution of Accounts upon a Sale of a Subsidiary...........59
-iv-
<PAGE>
PREAMBLE
The Plan as set forth in this document is known as the Insignia/ESG
Holdings, Inc. 401(k) Retirement Savings Plan (hereinafter called the "Plan").
The Plan is effective upon the date of distribution of Company Stock by
IFG to holders of IFG Stock, which is September 15, 1998. Effective on such
date, assets and liabilities of the IFG Plan attributable to Participants (and
their Beneficiaries) other than "Retained Employees" (as defined in the Merger
Agreement) shall have been transferred to the Plan.
It is the purpose of this Plan to provide a means of providing
retirement and other benefits to employees of Insignia/ESG Holdings, Inc. and
certain of its affiliated companies and to provide said employees with a means
to save for their retirement.
The Plan herein set forth and its related Trust are hereby designated
as constituting parts of a plan and trust intended to qualify under Section
401(a) of the Code and to be exempt from federal income taxation under Section
501(a) of Code. The Plan is intended to constitute an "eligible individual
account plan" designed to hold "qualifying employer securities," within the
meaning of ERISA.
This Plan, which is a profit-sharing plan, provides for a Code Section
401(k) feature.
Capitalized terms in this preamble shall have the meaning set forth in
Article I of the Plan.
<PAGE>
INSIGNIA/ESG HOLDINGS, INC. 401(k) RETIREMENT SAVINGS PLAN
Effective September 15, 1998
ARTICLE I: DEFINITIONS
1.1 "Account" or "Accounts" mean the Deferred Account, the Deferred
Matching Account, the Profit Sharing Account, the Rollover Account,
and such other subaccounts as are necessary for the orderly
administration of the Plan.
1.2 "Actual Deferral Percentage" means, with respect to a specified group
of Employees, the average of the ratios, calculated separately for
each Employee in that group, of (a) the amount of Deferred Cash
Contributions made pursuant to Section 3.1 for a Plan Year (including
Deferred Cash Contributions returned to a Highly Compensated Employee
under Section 3.1(c) and Deferred Cash Contributions returned to any
Employee pursuant to Section 3.l(d)), to (b) the Employee's
Compensation for that entire Plan Year. The Actual Deferral
Percentage for each group and the ratio determined for each Employee
in the group shall be calculated to the nearest one-hundredth of one
percent. For purposes of determining the Actual Deferral Percentage
for a Plan Year, Deferred Cash Contributions may be taken into
account for a Plan Year only if they:
(a) relate to compensation that would have been received by the
Employee in the Plan Year but for the deferral election, or
are attributable to services performed by the Employee in the
Plan Year and would have been received by the Employee within
2 1/2 months after the close of the Plan Year but for the
deferral election;
(b) are allocated to the Employee as of a date within that Plan
Year and the allocation is not contingent on the participation
or performance of service after such date; and
(c) are actually paid to the Trustee no later than 12 months after
the end of the Plan Year to which the contributions relate.
1.3 "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.
1.4 "Affiliated Employer" means any company which is a member of a
controlled group of corporations (as defined in Section 414(b) of the
Code) which also includes 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
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pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing sentence, for purposes of Section 3.8,
the definitions in Sections 414(b) and (c) of the Code shall be
modified as provided in Section 415(h) of the Code.
No entity shall be treated as an Affiliated Employer for any period
during which it is not part of the controlled group, under common
control or otherwise required to be aggregated under Section 414 of
the Code, except as may otherwise be determined by the Board of
Directors and set forth in resolutions of the Board of Directors.
Each Affiliated Employer shall participate in the Plan unless (i) the
Board of Directors determines, in its sole discretion, that a
particular Affiliated Employer shall not be eligible to participate
in the Plan or (ii) the Employees of an Affiliated Employer are
eligible to participate in a tax-qualified Section 401(k) plan other
than the Plan.
1.5 "AIMCO" means Apartment Investment and Management Company and any
successor by merger, purchase or otherwise.
1.6 "AIMCO Common Stock" means the Class A Common Stock, par value $.01
share, of AIMCO.
1.7 "Beneficiary" means any person, persons, or entity named by a
Participant by written designation filed with the Committee to
receive benefits payable in the event of the Participant's death.
However, if the Participant 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 Committee. Any such designation
shall not be effective without a Participant's spouse giving written
consent to designation of a beneficiary other than the spouse. That
consent shall be duly witnessed by a Plan representative or notary
public and shall acknowledge the effect on the spouse of the
Participant's election. The requirement for spousal consent may be
waived by the Committee if it is established to its satisfaction that
there is no spouse, the Participant is legally separated, or the
spouse cannot be located, or because of such other circumstances as
may be established by applicable law. If no beneficiary designation
is in effect at the time of death of the Participant, or if no
person, persons or entity so designated shall survive the
Participant, the Beneficiary shall be determined in the following
order of priority: (1) the Participant's surviving spouse; (2) the
Participant's surviving children, including adopted children, in
equal shares; (3) the Participant's surviving parents, in equal
shares; and (4) the Participant's estate.
1.8 "Board of Directors" means the Board of Directors of the Company or a
duly authorized committee thereof.
1.9 "Break in Service" means the applicable computation period during
which an Employee has not completed more than 500 Hours of Service
with the Employer. Further, solely for the purpose of determining
whether a Participant has incurred a Break in Service,
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Hours of Service shall be recognized for "authorized leaves of
absence" and "maternity and paternity leaves of absence," including
without limitation, leaves of absences taken pursuant to the Family
and Medical Leave Act of 1993.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military
service, or any other reason.
A "maternity or paternity leave of absence" means an absence from
work for any period by reason of the Employee's pregnancy, birth of
the Employee's child, placement of a child with the Employee in
connection with the adoption of such child, or any absence for the
purpose of caring for such child for a period immediately following
such birth or placement. For this purpose, Hours of Service shall be
credited for the computation period in which the absence from work
begins, only if credit therefor is necessary to prevent the Employee
from incurring a Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service
credited for a "maternity or paternity leave of absence" shall be
those which would normally have been credited but for such absence,
or, in any case in which the plan administrator is unable to
determine such hours normally credited, eight (8) Hours of Service
per day. The total Hours of Service required to be credited for a
"maternity or paternity leave of absence" shall not exceed 501.
1.10 "Class E Preferred Stock" means the Class E Cumulative Preferred
Stock, par value $.01 per share, of AIMCO.
1.11 "Class F Preferred Stock" means the Class F Cumulative Preferred
Stock, par value $.01 per share, of AIMCO.
1.12 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
1.13 "Company" means Insignia/ESG Holdings, Inc. and any successor by
merger, purchase or otherwise.
1.14 "Company Stock" means the common stock, $.01 par value per share, of
the Company.
1.15 "Company Stock Fund" means the Insignia/ESG Holdings, Inc. Stock
Fund, a fund primarily invested in Company Stock.
1.16 "Committee" means the persons named by the Board of Directors to
administer and supervise the Plan as provided in Article X.
1.17 "Compensation" means, with respect to any Participant, such
Participant's wages, salaries, fees for professional services and
other amounts received (without regard to whether or not an amount is
paid in cash) for personal services actually rendered in the
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course of employment with the Employer maintaining the Plan to the
extent that the amounts are includible in gross income (including,
but not limited to, commissions paid salesmen, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips, and bonuses). Notwithstanding anything to
the contrary herein, the amount of the Deferred Matching Contribution
contributed on behalf of a Participant who is assigned by Insignia
Financial Group, Inc. to provide services to Insignia Commercial
Group, Inc. shall be determined by excluding the amount, if any, of
such Participant's Deferred Cash Contribution that is attributable to
commissions or advances included in the Compensation of such
Participant.
Compensation shall exclude: (a)(1) contributions made by the Employer
to a plan of deferred compensation to the extent that the
contributions are not includible in the gross income of the
Participant for the taxable year in which contributed, (2) Employer
contributions made on behalf of an Employee to a simplified employee
pension plan described in Code Section 408(k) to the extent such
contributions are excludible from the Employee's gross income, and
(3) any distributions from a plan of deferred compensation, except
any amounts received by an Employee pursuant to an unfunded
nonqualified plan to the extent such amounts are includible in the
gross income of the Participant; (b) amounts realized from the
exercise of a nonqualified stock option, or when restricted stock (or
property) held by a Participant either becomes freely transferable or
is no longer subject to a substantial risk of forfeiture; (c) amounts
realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and (d) other amounts which
receive special tax benefits (whether or not the contributions are
excludible from the gross income of the Participant).
Compensation under this Section 1.17 shall be further adjusted by:
(a) excluding (even if includible in gross income) moving expense,
relocation expense, auto usage, aircraft usage, life
insurance, excess group life premiums, stock awards, warrants,
severance payments, and loans.
(b) including amounts contributed by the Participant pursuant to a
salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125 or
402(e)(3) (determined without regard to the limitation set
forth in Code Section 402(g)).
Compensation for any Plan Year shall not exceed $160,000 multiplied
by the Adjustment Factor. With respect to any short Plan Year,
Compensation shall not exceed the foregoing limit multiplied by a
fraction, the numerator of which is the number of months in the short
Plan Year and the denominator of which is 12.
1.18 "Contribution Percentage" means, with respect to a specified group of
Employees, the average of the ratios, calculated separately for each
Employee in that group, of (a) the sum of the Employee's Deferred
Matching Contributions for that Plan Year, to (b) his
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Compensation for that entire Plan Year. The Contribution Percentage
for each group and the ratio determined for each Employee in the
group shall be calculated to the nearest one-hundredth of one
percent.
1.19 "Deferred Account" means the account into which shall be credited the
Deferred Cash Contributions made on a Participant's behalf and
earnings on those contributions.
1.20 "DeferredCash Contributions" means all amounts contributed pursuant
to Section 3.1 of the Plan.
1.21 "Deferred Matching Account" means the account into which shall be
credited the Deferred Matching Contributions made on a Participant's
behalf and earnings on those contributions.
1.22 "Deferred Matching Contributions" means all amounts contributed
pursuant to Section 3.2 of the Plan.
1.23 "Disability" means a physical or mental condition of a Participant
resulting from bodily injury, disease, or mental disorder which
renders him totally and permanently disabled and incapable of
continuing his usual and customary employment with the Employer. The
Committee shall have the right to have the Participant examined by a
licensed physician chosen by the Committee. The determination of
Disability shall be made in a uniform, consistent, and
nondiscriminatory manner considering relevant evidence including the
medical records of the Participant.
1.24 "Early Retirement" means termination of service with the Employer
(prior to becoming eligible for Normal Retirement) on or after a
Participant attains his 55th birthday. A Participant who terminates
service and thereafter reaches age 55 shall be entitled to receive
benefits under this Plan.
1.25 "Earnings" means the amount of any income (or loss) to be returned
with any excess deferrals, excess contributions or excess aggregate
contributions under Article III as determined in accordance with
regulations prescribed by the Secretary of the Treasury under the
provisions of Sections 402(g), 401(k) and 401(m) of the Code.
1.26 "Effective Date" means September 15, 1998, the date of distribution
of Company Stock by IFG to holders of IFG Stock.
1.27 "Employee" means a person employed by an Employer, including Leased
Employees within the meaning of Sections 414(n) and 414(o) of the
Code. The term "Employee" shall not include any person classified as
a "statutory employee" for purposes of Section 3121(d)(3) of the Code
or any person who is an independent contractor or who is classified
as an independent contractor notwithstanding any subsequent
reclassification
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by the Employer or a third party, even if such reclassification is
made on a retroactive basis.
1.28 "Employer" means Insignia/ESG Holdings, Inc., or any successor by
merger, purchase or otherwise, with respect to its Employees; or any
Affiliated Employer participating in the Plan as provided in Section
14.3, with respect to its Employees.
1.29 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.30 "Enrollment Date" means the first day of any payroll period.
1.31 "Fund" or "Investment Fund" means the separate funds into which
contributions to the Plan are invested in accordance with Article IV.
1.32 "Grandfathered Stock" means (i) IFG Stock which the Participant held
in his account under the IFG Plan to the extent such shares are held
after the distribution to IFG stockholders of the shares of Company
Stock and (ii) any Class E Preferred Stock, any Class F Preferred
Stock, and any AIMCO Common Stock received as a result of the merger
of AIMCO and IFG pursuant to the Merger Agreement or transactions
following the merger.
1.33 "Grandfathered Stock Funds" means the funds primarily invested in
Grandfathered Stock.
1.34 "Highly Compensated Employee" means any Employee classified as a
highly compensated employee as determined under Section 414(q) of the
Code and any regulations issued thereunder.
(a) Highly Compensated Employee means any Employee who:
(1) Was a 5-percent owner of an Employer at any time during the
Plan Year or preceding Plan Year; or
(2) For the preceding Plan Year:
(A) had Compensation from an Employer or an Affiliated
Employer in excess of $80,000 as adjusted in accordance
with the Adjustment Factor, and
(B) was in the top-paid group of employees for such
preceding Plan Year.
(b) The following provisions shall apply for purposes of this Section
1.34:
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(1) An Employee shall be treated as a 5-percent owner of an
Employer for any Plan Year if at any time during such year
the Employee was a 5-percent owner (as defined in Section
416(i)(1) of the Code) of the Employer.
(2) An Employee is in the top-paid group of employees for any
Plan Year if such Employee is in the group consisting of the
top 20 percent of the Employees (considering all employees
of an Employer when ranked on the basis of Compensation
during such Plan Year).
(3) Any former Employee shall be treated as a Highly Compensated
Employee if such Employee was a Highly Compensated Employee
on the date of his Termination of Employment, or in any year
following attainment of age 55.
1.35 "Hour of Service" means, with respect to any applicable computation period:
(a) Each hour for which the Employee is or will be directly or
indirectly paid or entitled to payment for the performance of
duties for an Employer or an Affiliated Employer,
(b) Each hour for which the Employee is or will be directly or
indirectly paid or entitled to payment by an Employer or an
Affiliated Employer on account of a period during which no
duties are performed, whether or not the employment
relationship has terminated, 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, and
(c) Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an 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.
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. No Hours of Service shall
be credited with regard to any Employee for any period prior to the
date the entity by which he is employed became or becomes an Employer
except as specifically provided herein and then only as specified.
The Hours of Service credited shall be determined as required by
Department of Labor Regulations, Section 2530.200b- 2(b) and (c),
which are incorporated herein by reference. Employees compensated on
other than an hourly basis and for whom hours are not required to be
counted and recorded by any other federal law, such as the Fair Labor
Standards Act, shall be credited with forty-five (45) hours per week
for any week during which the Employee is credited with one (1) Hour
of Service.
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1.36 "IFG" means Insignia Financial Group, Inc. and any successor by
merger, purchase or otherwise.
1.37 "IFG Plan" means the Insignia Financial Group 401(k) Retirement
Savings Plan, as amended from time to time.
1.38 "IFG Stock" means the Class A Common Stock, $.01 par value per share,
of IFG.
1.39 "Leased Employee" means any person as so defined in Section 414(n) of
the Code. In the case of any person who is a Leased Employee before
or after a period of service as an Employee, the entire period during
which he has performed services for an Employer as a Leased Employee
shall be counted to the extent required by Section 414(n) of the Code
as service as an Employee for all purposes of the Plan, except that
he shall not, by reason of that status, become a Participant of the
Plan.
1.40 "Merger Agreement" means the Amended and Restated Agreement and Plan
of Merger dated as of May 26, 1998 by and among AIMCO and AIMCO
Properties, L.P., IFG and the Company.
1.41 "Normal Retirement" means termination from service with the Employer
on or after the Participant's 65th birthday.
1.42 "Participant" means (i) any person who has met the participation
requirements of the Plan as provided in Article II or (ii) with
regard to provisions applicable to Participants who terminated
employment with IFG or another company participating in the IFG Plan
prior to the Effective Date (including, without limitation, Articles
IV and IX), any person who had an account balance in the IFG Plan
transferred to the Plan pursuant to the transactions contemplated in
the Merger Agreement but who has not met the participation
requirements of the Plan.
1.43 "Plan" means the Insignia/ESG Holdings, Inc. 401(k) Retirement
Savings Plan as set forth in this document or as amended from time to
time.
1.44 "Plan Year" means the 12 month period beginning on January lst and
ending on December 31st of each year. Notwithstanding the foregoing,
the initial Plan Year shall be the short Plan Year beginning on the
Effective Date and ending on December 31, 1998.
1.45 "Profit Sharing Account" means the account into which shall be
credited the Profit Sharing Contributions made on a Participant's
behalf and earnings on those contributions.
1.46 "Profit Sharing Contributions" means all amounts contributed pursuant
to Section 3.3 of the Plan.
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1.47 "Rollover Account" means the separate account into which shall be
credited the Rollover Contributions made by a Participant and
earnings on those contributions.
1.48 "Rollover Contributions" means all amounts contributed pursuant to
Section 3.4 of the Plan.
1.49 "Termination of Employment" means the separation from the employment
of all Employers and Affiliated Employers for any reason, including,
but not limited to, retirement, death, Disability, resignation or
dismissal with or without cause. Where an Employee enters upon an
authorized leave of absence or layoff, Termination of Employment
shall not be deemed to occur until his leave of absence expires
without immediate reemployment, or in the case of layoff, he is not
rehired within the time established by the Committee in accordance
with the general policy of the Employer. Where an Employee is on a
military leave of absence, Termination of Employment shall not be
deemed to occur unless and until the Employee fails to return to
employment prior to the end of the period during which is right to
reemployment is protected by the Selective Service Act, or Uniform
Services Employment and Reemployment Act or any similar law then
existing. In the event that an Employee is transferred from one
Employer or Affiliated Employer to another Employer or Affiliated
Employer, the Employee will not be deemed to have incurred a
Termination of Employment until he is no longer employed by any
Employer or Affiliated Employer.
1.50 "Trustee" means the trustee or trustees appointed from time to time
by the Board of Directors by whom the Funds of the Plan are held as
provided in Article XI.
1.51 "Valuation Date" means each business day of the Plan Year. A business
day is each day the New York Stock Exchange is open for the trading
of registered securities.
1.52 "Vested Portion" means the portion of the Accounts in which the
Participant has a nonforfeitable interest as provided in Article VI
or, if applicable, Section 13.5.
1.53 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at
least 1000 Hours of Service. For purposes of determining a Year of
Service for participation, the initial computation period shall begin
with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a Break
in Service shall be measured from the date on which an Employee again
performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the
date on which the Employee first performed an Hour of Service.
For vesting purposes, a Year of Service shall be a computation period
in which an Employee completes 1000 Hours of Service. For this
purpose, the computation period shall be the Plan Year, including
periods prior to the Effective Date of the Plan.
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Notwithstanding anything else herein to the contrary, Years of
Service for participation and Years of Service for vesting shall not
include, in the case of an Employee who incurs five or more
consecutive Breaks in Service and at that time does not have any
vested right in Employer contributions, any service before those
Breaks in Service commenced.
For all other purposes, the computation period shall be the Plan
Year. Years of Service with any Affiliated Employer shall be
recognized.
(a) Service for Participation and Vesting. If an Employee is
within one of the following classes of employees, the Employee
shall receive past service credit for purposes of determining
Years of Service for participation and vesting under this Plan
to the extent such service would be recognized under the terms
of this Plan had such service been rendered to an Employer
without taking into account any breaks in such service, and,
for each of the following classes of employees (other than
former employees of IFG) not to exceed five years:
Former Employees of Insignia Financial Group, Inc. Any
individual who was employed by IFG or any entity that would be
deemed a single employer with IFG under Section 414(b), (c),
(m) or (o) of the Code or Section 4001 of ERISA and who either
(i) becomes an Employee of the Company or an Affiliated
Employer participating in the Plan or (ii) had his account
balance in the IFG Plan transferred to the Plan pursuant to
the transactions contemplated in the Merger Agreement, shall
receive credit for participation and vesting purposes for all
service with IFG or any entity that would be deemed a single
employer with IFG under Section 414(b), (c), (m) or (o) of the
Code or Section 4001 of ERISA.
Former Employees of U.S. Shelter Corp. Any Employee who was
employed by U.S. Shelter Corp. on December 31, 1990, and who
became an Employee of IFG or another company participating in
the IFG Plan on January 1, 1991, shall receive credit for
participation and vesting purposes for all service with U.S.
Shelter Corp. prior to January 1, 1991.
Former Employees of Jacques-Miller, Inc. Any Employee who was
employed by Jacques-Miller, Inc. on December 31, 1991, and who
became an Employee of IFG or another company participating in
the IFG Plan on January 1, 1992, shall receive credit for
participation and vesting purposes for all service with
Jacques-Miller, Inc. prior to January 1, 1992.
Former Employees of Metropolitan Asset Group. Any Employee who
was employed by Metropolitan Asset Group on December 31, 1991,
and who became an Employee of IFG or another company
participating in the IFG Plan on January 1, 1992, shall
receive credit for participation and vesting purposes for all
service with Metropolitan Asset Group prior to January 1,
1992.
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Former Employees of Angeles Corporation. Any Employee who was
employed by Angeles Corporation on December 31, 1992, and who
became an Employee of IFG or another company participating in
the IFG Plan on January 1, 1993, shall receive credit for
participation and vesting purposes for all service with
Angeles Corporation prior to January 1, 1993.
Former Employees of Allegiance Realty Group, Inc. Any Employee
who was employed by Allegiance Realty Group, Inc. on November
4, 1994, and who became an Employee of IFG or another company
participating in the IFG Plan on November 5, 1994, shall
receive credit for participation and vesting purposes for all
service with Allegiance Realty Group, Inc. prior to November
5, 1994.
Former Employees of Partnership Services, Inc. Any Employee
who was employed by Partnership Services, Inc. on December 8,
1994, and who became an Employee of IFG or another company
participating in the IFG Plan on December 9, 1994, shall
receive credit for participation and vesting purposes for all
service with Partnership Services, Inc. prior to December 9,
1994.
Former Employees of Coventry Properties, Inc. Any Employee who
was employed by Coventry Properties, Inc. on December 8, 1994,
and who became an Employee of IFG or another company
participating in the IFG Plan on December 9, 1994, shall
receive credit for participation and vesting purposes for all
service with Coventry Properties, Inc. prior to December 9,
1994.
Former Employees of Bryanston Management Group, Inc. Any
Employee who was employed by Bryanston Management Group, Inc.
on August 15, 1995, and who became an Employee of IFG or
another company participating in the IFG Plan on August 16,
1995, shall receive credit for participation and vesting
purposes for all service with Bryanston Management Group, Inc.
prior to August 16, 1995.
Former Employees of The Kreisel Company, Inc. Any Employee who
was employed by The Kreisel Company, Inc. on September 30,
1995, and who became an Employee of IFG or another company
participating in the IFG Plan on October 1, 1995, shall
receive credit for participation and vesting purposes for all
service with The Kreisel Company, Inc. prior to October 1,
1995.
Former Employees of Douglas Elliman-Gibbons & Ives. Any
Employee who was employed by Douglas Elliman-Gibbons & Ives on
September 30, 1995, and who became an Employee of IFG or
another company participating in the IFG Plan on October 1,
1995, shall receive credit for participation and vesting
purposes for all service with Douglas Elliman-Gibbons & Ives
prior to October 1, 1995.
Former Employees of National Property Investors, Inc. Any
Employee who was employed by National Property Investors, Inc.
on January 22, 1996, and who
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became an Employee of IFG or another company participating in
the IFG Plan on January 23, 1996, shall receive credit for
participation and vesting purposes for all service with
National Property Investors, Inc. prior to January 23, 1996.
Former Employees of Edward S. Gordon Company, Inc. Any
Employee who was employed by Edward S. Gordon Company, Inc. on
June 30, 1996, and who became an Employee of IFG or another
company participating in the IFG Plan on July 1, 1996, shall
receive credit for participation and vesting purposes for all
service with Edward S. Gordon Company, Inc. prior to July 1,
1996.
Former Employees of Paragon Group Property Services, Inc. Any
Employee who was employed by Paragon Group Property Services,
Inc. on June 30, 1996, and who became an Employee of IFG or
another company participating in the IFG Plan on July 1, 1996,
shall receive credit for participation and vesting purposes
for all service with Paragon Group Property Services, Inc.
prior to July 1, 1996.
(b) Service for Participation Only. If an Employee is within one
of the following classes of employees, the Employee shall
receive credit for past service with the listed predecessor
employer for purposes of determining Years of Service for
participation only:
Former Employees of Security Management, Inc. Any Employee who
was employed by Security Management, Inc. on June 30, 1992,
and who became an Employee of IFG or another company
participating in the IFG Plan on July 1, 1993.
Former Employees of Duddlesten Management Corporation. Any
Employee who was employed by Duddlesten Management Corporation
on December 31, 1993, and who became an Employee of IFG or
another company participating in the IFG Plan on January 1,
1994.
Former Employees of Gross, Langton & Co. Any Employee who was
employed by Gross, Langton & Co. on December 31, 1993, and who
became an Employee of IFG or another company participating in
the IFG Plan on January 1, 1994.
Former Employees of O'Donnell Properties Services, Inc. Any
Employee who was employed by O'Donnell Properties Services,
Inc. on April 30, 1995, and who became an Employee of IFG or
another company participating in the IFG Plan on May 1, 1995.
Former Employees of HMB Property Services, Inc. Any Employee
who was employed by HMB Property Services, Inc. on February
28, 1997, and who became an Employee of IFG or another company
participating in the IFG Plan on March 1, 1997.
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Former Employees of Rostenberg-Doern Company, Inc. Any
Employee who was employed by Rostenberg-Doern Company, Inc. on
February 28, 1997, and who became an Employee of IFG or
another company participating in the IFG Plan on March 1,
1997.
Former Employees of Frain, Camins & Swartchild Incorporated.
Any Employee who was employed by Frain, Camins & Swartchild
Incorporated on March 31, 1997, and who became an Employee of
IFG or another company participating in the IFG Plan on April
1, 1997.
Former Employees of Koll Management Services, Inc. Any
Employee who was employed by Koll Management Services, Inc. on
March 30, 1997, and who became an Employee of IFG or another
company participating in the IFG Plan during the period April
1, 1997 through August 1, 1997.
Former Employees of Thomas Safran & Associates. Any Employee
who was employed by Thomas Safran & Associates on July 31,
1997, and who became an Employee of IFG or another company
participating in the IFG Plan on August 1, 1997.
Former Employees of Forum Properties, Inc. Any Employee who
was employed by Forum Properties, Inc. on September 7, 1997,
who was a participant in the Forum Properties, Inc. 401(k)
Savings Plan, and who became an Employee of IFG or another
company participating in the IFG Plan on September 8, 1997.
Former Employees of First Winthrop Corporation. Any Employee
who was employed by First Winthrop Corporation on October 27,
1997, and who became an Employee of IFG or another company
participating in the IFG Plan on October 28, 1997.
Former Employees of Barnes, Morris, Pardoe & Foster Management
Services, LLC. Any Employee who was employed by Barnes,
Morris, Pardoe & Foster Management Services, LLC on October
31, 1997, and who became an Employee of IFG or another company
participating in the IFG Plan on November 1, 1997.
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ARTICLE II: ELIGIBILITY AND PARTICIPATION
2.1 Eligibility
(a) Each present or future Employee who has attained the age of 21
shall be eligible to participate in the Plan on the later of
(i) the Effective Date or (ii) the Employee's date of hire. An
Employee who has not attained the age of 21 shall be eligible
to participate as of the date he attains age 21.
(b) Notwithstanding the preceding, the following persons shall not
be eligible to participate in the Plan.
(1)any Leased Employee;
(2)any person who is employed by an Affiliated Employer that is
not eligible to participate in the Plan as provided under
the last paragraph of Section 1.4 of the Plan;
(3)an Employee whose employment is governed by the terms of a
collective bargaining agreement between Employee
representatives (within the meaning of Code Section
7701(a)(46)) and the Employer (except to the extent that the
collective bargaining agreement expressly provides for the
inclusion of such Employees);
(4)any nonresident alien (within the meaning of Section 7701(b)
of the Code) with no earned income (within the meaning of
Section 911(d)(2) of the Code) from an Employer, which
constitutes income from sources within the United States
(within the meaning of Section 861(a)(3) of the Code); and
(5)any person who is a qualified real estate agent (within the
meaning of Section 3508 of the Code).
2.2 Effective Date of Participation
(a) An eligible Employee shall become a Participant effective as
of the Enrollment Date coinciding with or next following the
date such Employee meets the eligibility requirements of
Section 2.1(a), provided said Employee is still employed as of
such date (or if not employed on such date, as of the date of
rehire if a Break in Service has not occurred).
(b) Notwithstanding the above, the effective date of participation
for the following classes of eligible employees shall be as
follows:
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Former Employees of First Winthrop Corporation. Any Employee
who was employed by First Winthrop Corporation on October 27,
1997, and who became an Employee of IFG or another company
participating in the IFG Plan on October 28, 1997, shall
become a Participant as of January 1, 1998.
Former Employees of Barnes, Morris, Pardoe & Foster Management
Services, LLC. Any Employee who was employed by Barnes,
Morris, Pardoe & Foster Management Services, LLC on October
31, 1997, and who became an Employee of IFG or another company
participating in the IFG Plan on November 1, 1997, shall
become a Participant as of January 1, 1998.
2.3 Application for Participation
(a) Prior to an eligible Employee's Enrollment Date, such eligible
Employee shall give notice to the Trustee in the manner
prescribed by the Committee on which he:
(1)designates a percentage of Compensation or dollar amount as
Deferred Cash Contributions;
(2)authorizes an Employer to reduce his Compensation in
accordance with his election under Section 3.1;
(3)makes an investment election; and
(4)names a Beneficiary.
(b) Notwithstanding the preceding, an eligible Employee who has
not otherwise become a Participant under paragraph (a) above
shall become a Participant as of the Valuation Date that
Profit Sharing Contributions are credited to his Profit
Sharing Account. A Participant described in this paragraph (b)
may still elect to reduce his Compensation for the purpose of
having Deferred Cash Contributions made on his behalf by
filing an appropriate form in accordance with paragraph (a)
above.
(c) The Committee shall notify each eligible Employee described in
paragraph (b) above and each Participant who is an Employee,
but who does not currently have in effect an investment
election, about the opportunity and process for making
investment elections. In addition, the Committee shall furnish
each eligible Employee described in paragraph (b) above a form
upon which he may designate a Beneficiary.
2.4 Reemployment of Former Employees and Former Participants
Any person reemployed by an Employer as an Employee, who was
previously a Participant or who was previously eligible to become a
Participant, shall be immediately
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eligible to become a Participant of the Plan upon the filing of a
form in accordance with Section 2.3. Notwithstanding anything to the
contrary herein, any person who is reemployed by an Employer as an
Employee after he has had five or more Breaks in Service and who does
not have any vested right in Employer contributions, shall again
become a Participant upon completing the eligibility requirements in
Section 2.1 and filing the appropriate form or forms in accordance
with Section 2.3. Any person reemployed by an Employer as an
Employee, who was not previously eligible to become a Participant,
shall become a Participant upon completing the eligibility
requirements in Section 2.1 and filing the appropriate form or forms
in accordance with Section 2.3.
2.5 Transferred Participants
A Participant who remains in the employ of an Employer but ceases to
be an Employee shall continue to be a Participant of the Plan but
shall not be eligible to make Deferred Cash Contributions while his
employment status is other than as an Employee.
2.6 Termination of Participation
A Participant's participation shall terminate on the date of his
Termination of Employment unless the Participant is entitled to
benefits under the Plan, in which event his participation shall
terminate when those benefits are distributed to him.
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ARTICLE III: CONTRIBUTIONS
3.1 Deferred Cash Contributions
(a) A Participant may elect on his application filed under Section
2.3 to reduce his Compensation payable during a Plan Year
while a Participant by not less than 1% and not more than 15%,
in multiples of 1%, or a flat dollar amount not to exceed 15%
of his Compensation, as elected by the Participant, and have
that amount contributed to the Plan by an Employer as Deferred
Cash Contributions in a manner to be determined by the
Committee. Any Deferred Cash Contributions elected under this
Section 3.1 shall be allocated to the Participant within the
Plan Year for which they are contributed and shall be paid to
the Trustee within the time permitted by law. Such
contributions shall reduce the amount of Compensation
otherwise payable thereafter. Deferred Cash Contributions
shall be further limited as provided in this Article III.
(b) In no event shall the Participant's reduction in Compensation
and the corresponding Deferred Cash Contributions and similar
contributions made on his behalf by an Employer in any
calendar year exceed $10,000 as adjusted by the Secretary of
the Treasury in accordance with Code Section 402(g)(5). If a
Participant's Deferred Cash Contributions in a calendar year
reach that dollar limitation, his election of Deferred Cash
Contributions for the remainder of the calendar year will be
canceled. As of the first pay period of the calendar year
following such cancellation, the Participant's election of
Deferred Cash Contributions shall again become effective in
accordance with his previous election.
(c) In the event that the sum of the Deferred Cash Contributions
and similar contributions to any other qualified defined
contribution plan maintained by an Employer exceeds the dollar
limitation under paragraph (b) for any calendar year, the
Participant shall be deemed to have elected a return of
Deferred Cash Contributions in excess of such limit ("excess
deferrals") from this Plan. The excess deferrals, together
with Earnings, shall be returned to the Participant no later
than the April 15 following the end of the calendar year in
which the excess deferrals were made. The amount of excess
deferrals to be returned for any calendar year shall be
reduced by any Deferred Cash Contributions previously returned
to the Participant under Section 3.7(a)(2) for that calendar
year. In the event any Deferred Cash Contributions returned
under this paragraph (c) were matched by Deferred Matching
Contributions under Section 3.2, those Deferred Matching
Contributions, together with Earnings thereon, shall be
forfeited and used to reduce Employer contributions.
(d) If a Participant makes tax-deferred contributions under
another qualified defined contribution plan maintained by an
employer other than an Employer for any calendar year and
those contributions when added to his Deferred Cash
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Contributions under this Plan exceed the dollar limitation
under paragraph (b) above for that calendar year, the
Participant may allocate all or a portion of such excess
deferrals to this Plan. In that event, the excess deferrals,
with Earnings, as allocated shall be returned to the
Participant no later than the April 15 following the end of
the calendar year in which the excess deferrals were made.
However, the Plan shall not be required to return excess
deferrals unless the Participant notifies the Committee, in
writing, by March 1 of that following calendar year of the
amount of the excess deferrals allocated to this Plan. In
addition, the amount of any excess deferrals to be returned
for any calendar year shall be reduced by any Deferred Cash
Contributions previously returned to the Participant under
Section 3.7(a)(2) for that calendar year. In the event any
Deferred Cash Contributions returned under this paragraph (d)
were matched by Deferred Matching Contributions under Section
3.2, those Deferred Matching Contributions, with Earnings
thereon, shall be forfeited and used to reduce Employer
contributions.
3.2 Deferred Matching Contributions
The Employer shall contribute, on behalf of each of its Participants
who has completed one Year of Service for participation and who makes
the election described in Section 3.1, a discretionary amount,
representing a Deferred Matching, Contribution equal to a percentage
of each such Participant's Deferred Cash Contribution, the exact
percentage to be determined each year by the Employer in its sole and
absolute discretion.
The Deferred Matching Contributions are made expressly conditional on
the Plan satisfying the provisions of Sections 3.1 and 3.7. If any
portion of the Deferred Cash Contribution to which the Deferred
Matching Contribution relates is returned to the Participant under
Section 3.1 or 3.7, the corresponding Deferred Matching Contribution
shall be forfeited, and if any amount of the Deferred Matching
Contribution is deemed an excess aggregate contribution under Section
3.7(b), such amount shall be forfeited in accordance with the
provisions of that Section. The Deferred Matching Contributions shall
be paid to the Trustee within the time permitted by law.
3.3 Profit Sharing Contributions
(a) The Employer may elect, in its sole and absolute discretion,
to make Profit Sharing Contributions to the Plan for each Plan
Year in an amount to be determined by the Employer as of the
last day of that Plan Year. Profit Sharing Contributions shall
be made on behalf of each Participant or Employee eligible to
become a Participant who either:
(1) completes 1000 Hours of Service during the Plan Year
and is employed by the Employer on the last day of
that Plan Year; or
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(2) terminated employment from an Employer during a Plan
Year by reason of death, Disability, or Normal
Retirement.
(b) Profit Sharing Contributions shall be paid to the Trustee at
such time or times as the Board of Directors shall determine,
but not later than the due date, with extensions, for the
Employer's applicable federal income tax return.
(c) Except as otherwise provided, the Profit Sharing
Contributions, if any, for each Plan Year shall be allocated
to all Participants or Employees described in paragraph (a)
above based on the ratio of each such Participant's or
Employee's Compensation received during the period in that
Plan Year such individual is a Participant or eligible to
become a Participant to the total of such Compensation during
that Plan Year of all such Participants and Employees.
(d) In no event, however, shall the contributions by the Employer
under this Article III, when combined with amounts contributed
pursuant to Section 3.1 hereof and any other plan of the
Employer qualified under Section 401(a) of the Code exceed the
maximum amount deductible from an Employer's income for that
Plan Year under Section 404(a)(3)(A) of the Code or any
statute of similar import.
3.4 Participant Rollover Contributions and Transfers
(a) With permission of the Committee and without regard to any
limitations on contributions set forth in any other section of
this Article III, the Plan may receive from a Participant, or
an Employee who has not yet met the eligibility requirements
for participation, in cash or other property (approved by the
Committee and the Trustee), any amount previously received by
him either directly from a qualified plan or directly or
indirectly from an individual retirement account that holds
assets solely from a plan qualified under Section 401(a) of
the Code, provided that such amount is eligible to be rolled
over to a qualified trust in accordance with Code Section
402(c)(5) and the Participant provides evidence satisfactory
to the Committee that such amount qualifies for rollover
treatment. The Rollover Contributions may be contributed to
the Plan either through a direct or indirect rollover and, if
indirect, the Rollover Contributions must be paid to the
Trustee on or before the 60th day after the day they were
received by the Participant.
(b) With the permission of the Committee and under such conditions
as it may require, but without regard to any limitations on
contributions set forth in any other section of this Article
III, the Plan may accept an amount in cash or other property
(approved by the Committee and the Trustee), if any, from
another qualified plan which the Participant elects under such
plan to transfer to this Plan, or which the trustee of such
other qualified plan transfers directly to the Trustee of this
Plan. Such transfer contributions shall be paid to the Trustee
as soon as practicable and shall be held in the Rollover
Account of the Participant. Notwithstanding the
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foregoing, the Plan shall not accept any amount directly or
indirectly transferred from a defined contribution plan
subject to Sections 401(a)(11) and 417 of the Code with
respect to the Participant requesting permission to transfer
said amount. Further, the Plan shall not accept any amount
directly or indirectly transferred from a defined benefit plan
or a defined contribution plan subject to Section 412 of the
Code unless the transfer is in the form of an eligible
rollover distribution.
3.5 Change in Contributions
The percentages of Compensation designated by a Participant under
Section 3.1 shall automatically apply to increases and decreases in
his Compensation. Subject to the provisions of Section 3.1, a
Participant may modify the percentage or flat dollar amount of his
authorized payroll deduction or reduction and concurrently make a new
election by giving notice to the Trustee in the manner approved by
the Committee. The change in contribution shall be effective as soon
as reasonably practicable following receipt by the Trustee of such
notice. Any modification shall not have retroactive effect and shall
remain in force until revoked.
3.6 Suspension of Contributions
(a) A Participant may suspend his Deferred Cash Contributions
and/or revoke his election under Section 3.1 at any time by
giving notice to the Trustee in the manner approved by the
Committee. The suspension or revocation shall become effective
as of the first day of the payroll period following the
Trustee's receipt of the notice requesting the suspension.
(b) A Participant who has suspended his Deferred Cash
Contributions may again elect to commence making Deferred Cash
Contributions to the Plan at any time by so notifying the
Trustee in the manner approved by the Committee. The
resumption of Deferred Cash Contributions shall be effective
as of the first day of the payroll period following the
Trustee's receipt of the notice requesting commencement of
contributions.
3.7 Limitations Affecting Highly Compensated Employees
(a) Limitation Based on Actual Deferral Percentage: The Actual
Deferral Percentage for Highly Compensated Employees who are
Participants or eligible to become Participants shall not
exceed the Actual Deferral Percentage for the preceding Plan
Year for all other Employees who were Participants or were
eligible to become Participants multiplied by 1.25. If the
Actual Deferral Percentage does not meet the foregoing test,
the Actual Deferral Percentage for Highly Compensated
Employees may not exceed the lesser of the Actual Deferral
Percentage for the preceding Plan Year for all other Employees
who were Participants or were eligible to become Participants
plus two percentage points or such Actual Deferral
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Percentage multiplied by 2.0 (or such lesser amount as the
Committee shall determine to satisfy the provisions of
paragraph (c) below). The Committee may implement rules
limiting the Deferred Cash Contributions which may be made on
behalf of some or all Highly Compensated Employees so that
this limitation is satisfied. If the Committee determines that
the limitation under this paragraph (a) has been exceeded in
any Plan Year, the following provisions shall apply:
(1) Any distribution of Deferred Cash Contributions
subject to reduction under this paragraph ("excess
contributions") shall be made to Highly Compensated
Employees by leveling based on the amount of
contributions by, or on behalf of, such employees.
Such leveling shall be determined by reducing
Deferred Cash Contributions made on behalf of Highly
Compensated Employees in order of the dollar amounts
of Deferred Cash Contributions beginning with the
largest of such dollar amounts of Deferred Cash
Contributions, as adjusted as the reduction takes
place.
(2) Excess contributions, together with Earnings thereon,
shall be paid to the Participant 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 Participant
under Section 3.1(c) for that Plan Year. In the event
any Deferred Cash Contributions returned under this
paragraph (a) were matched by Deferred Matching
Contributions, such corresponding Deferred Matching
Contributions, with Earnings thereon, to the extent
vested shall be paid to the Participant and to the
extent forfeitable under the Plan shall be forfeited
and used to reduce Employer contributions.
(3) Notwithstanding the foregoing, there shall be no
income allocable to excess contributions during the
period between the end of the Plan Year and the date
of distribution of the excess contributions.
All determinations and procedures with regard to the matters
covered by this Section 3.7(a) shall be made in accordance
with Code Section 401(k)(3) and Treasury Regulation Section
1.401(k)-1(b).
(b) Limitation Based on Contribution Percentage: The Contribution
Percentage for Highly Compensated Employees who are
Participants or eligible to become Participants shall not
exceed the Contribution Percentage for the preceding Plan Year
for all other Employees who were Participants or were eligible
to become Participants multiplied by 1.25. If the Contribution
Percentage does not meet the foregoing test, the Contribution
Percentage for Highly Compensated Employees may not exceed the
lesser of the Contribution Percentage for the preceding Plan
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Year for all other Employees who were Participants or were
eligible to become Participants plus two percentage points or
such Contribution Percentage multiplied by 2.0 (or such lesser
amount as the Committee shall determine to satisfy the
provisions of paragraph (c) below). If the Committee
determines that the limitation under this paragraph (b) has
been exceeded in any Plan Year, the following provisions
apply:
(1) Any distribution of Deferred Matching Contributions
subject to reduction under this paragraph ("excess
aggregate contributions") shall be made to Highly
Compensated Employees by leveling based on the amount
of contributions by, or on behalf of, such employees.
Such leveling shall be determined by reducing
Deferred Matching Contributions made on behalf of
Highly Compensated Employees in order of the dollar
amounts of Deferred Matching Contributions beginning
with the largest of such dollar amounts of Deferred
Matching Contributions, as adjusted as the reduction
takes place.
(2) Any excess aggregate contributions, together with
Earnings thereon, shall be reduced and allocated in
the following order:
(A) so much of the matched Deferred Matching
Contributions, together with Earnings, as
shall be necessary to meet the test shall be
reduced, with the Deferred Matching
Contributions, together with Earnings, being
forfeited and applied to reduce Employer
contributions; and then if necessary,
(B) so much of the Deferred Matching
Contributions, together with Earnings, as
shall be necessary to equal the balance of
the excess aggregate contributions shall be
reduced, with the vested Deferred Matching
Contributions being paid to the Participant
and the Deferred Matching Contributions
which are forfeitable under the Plan being
forfeited and applied to reduce Employer
contributions.
Any repayment 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.
(3) Notwithstanding the foregoing, there shall be no
income allocable to excess contributions during the
period between the end of the Plan Year and the date
of distribution of the excess contributions.
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All determinations and procedures with regard to the
matters covered by this Section 3.7(b) shall be made
in accordance with Code Section 401(m) and Treasury
Regulation Section 1.401(m)-1.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, in no event shall the sum of the Actual Deferral
Percentage of the group of eligible Highly Compensated
Employees and the Contribution Percentage of such group, after
applying the provisions of paragraphs (a) and (b) above,
exceed the "aggregate limit" as such term is defined under
regulations prescribed by the Secretary of the Treasury under
Section 401(m) of the Code. In the event the aggregate limit
is exceeded for any Plan Year, the 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 paragraph (b) above.
(d) If any Highly Compensated Employee is a member of another
qualified plan of an Employer, other than an employee stock
ownership plan described in Section 4975(e)(7) of the Code,
under which deferred cash contributions or matching
contributions are made on behalf of the Highly Compensated
Employee or under which the Highly Compensated Employee makes
after-tax contributions, 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. If any other such qualified
plan has a plan year other than the Plan Year as defined in
1.44, the contributions to be taken into account in applying
the limitations of this Section will be those made on the plan
years ending with or within the same calendar year.
(e) In the event that this Plan is aggregated with one or more
other plans to satisfy the requirements of Sections 401(a)(4)
and 410(b) of the Code (other than for purposes of the average
benefit percentage test) or if one or more other plans is
aggregated with this Plan to satisfy the requirements of such
sections of the Code, then the provisions of this Section 3.7
shall be applied by determining the Actual Deferral Percentage
and Contribution Percentage of employees as if all such plans
were a single plan. If this Plan is permissively aggregated
with any other plan or plans for purposes of satisfying the
provisions of Section 401(k)(3) of the Code, the aggregated
plans must also satisfy the provisions of Sections 401(a)(4)
and 410(b) of the Code as though they were a single plan.
Plans may be aggregated under this paragraph (f) only if they
have the same plan year.
(f) Notwithstanding any provision of the Plan to the contrary,
employees included in a unit of employees covered by a
collective bargaining agreement shall be disregarded in
applying the provisions of this Section 3.7.
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(g) The Committee may authorize that special "qualified
nonelective contributions" shall be made for a Plan Year,
which shall be allocated in such amounts and to such
Participants who are not Highly Compensated Employees,
starting with the Participant with the lowest Compensation for
the testing period until such Participant has reached the
limitation under Section 3.8 hereof and progressing thereafter
in similar manner in reverse order of Compensation until such
contributions are fully utilized, as the Committee shall
determine. The Committee shall establish such separate
accounts as may be necessary. Qualified nonelective
contributions shall be 100% nonforfeitable when made.
Qualified nonelective contributions made for the Plan Year
shall be used to satisfy the tests described in paragraphs (a)
and (c) above, where necessary; furthermore, they may be used
to satisfy the tests described in paragraphs (b) and (c)
above. An Employer may also elect to use Deferred Cash
Contributions to satisfy the tests described in paragraphs (b)
and (c) above, provided that the tests described in paragraphs
(a) and (c) above are met prior to such election, and continue
to be met following an Employer's election to shift the
application of those Deferred Cash Contributions from
paragraph (a) to paragraph (b). The provisions of this
paragraph shall be subject to any applicable regulations which
may be issued.
3.8 Maximum Annual Additions
(a) The annual addition to a Participant'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
Participant's annual addition for that Plan Year under any
other qualified defined contribution plan of an Employer shall
not exceed an amount which is equal to the lesser of (i)
$30,000 or (ii) 25% of his aggregate remuneration for that
Plan Year.
(b) For purposes of this Section 3.8, the term "annual addition"
shall mean the sum of:
(1) The total contributions, including Deferred Cash
Contributions, made on the Participant's behalf by an
Employer and all Affiliated Employers;
(2) All Participant contributions, exclusive of any
Rollover Contributions;
(3) Forfeitures;
(4) Amounts allocated to an individual medical benefit
account, as defined in Section 415(l)(2) which is
part of a pension or annuity plan maintained by an
Employer; and
(5) Amounts derived from contributions which are
attributable to postretirement medical benefits
allocated to the separate account of a key employee
(as defined in Section 419A(d)(3) of the Code) under
a welfare
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benefit fund (as defined in Section 419(e) of the
Code) maintained by an Employer.
The percentage limitation of Section 3.8(a)(ii) above, however, shall
not apply to:
(6) Any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after
separation from service which is otherwise treated as
an "annual addition;" or
(7) Any amount otherwise treated as an "annual addition"
under Section 415(l)(1) of the Code.
For purposes of this paragraph (b), any Deferred Cash
Contributions or Deferred Matching Contributions which may
have been distributed or forfeited under the provisions of
Section 3.1(c) or Section 3.7 shall be included in the annual
addition for the year allocated.
(c) For purposes of this Section, the term "remuneration" with
respect to any Participant shall include such Participant's
wages, salaries, fees for professional services and other
amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements or other
expense allowances under a nonaccountable plan).
"Remuneration" shall exclude (a)(1) contributions made by the
Employer to a plan of deferred compensation to the extent
that, before the application of the limitations of Section 415
of the Code to the Plan, the contributions are not includible
in the gross income of the Employee for the taxable year in
which contributed, (2) Employer contributions made on behalf
of an Employee to a simplified employee pension plan described
in Code Section 408(k) to the extent such contributions are
excludible from the Employee's gross income, (3) any
distributions from a plan of deferred compensation, except any
amounts received by an Employee pursuant to an unfunded
non-qualified plan to the extent such amounts are includible
in the gross income of the Employee; (b) amounts realized from
the exercise of a non qualified stock option, or when
restricted stock (or property) held by an Employee either
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (c) amounts realized from the
sale, exchange or other disposition of stock acquired under a
qualified stock option; and (d) other amounts which receive
special tax benefits (whether or not the contributions are
actually excludible from the gross income of the Employee).
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Remuneration shall be determined by including a Participant's
Deferred Cash Contributions made pursuant to Section 3.1 and
amounts contributed by the Employer at the election of the
Participant pursuant to a cafeteria plan as described in
Section 125 of the Code.
(d) If the annual addition to a Participant's Accounts for any
Plan Year, prior to the application of the limitation set
forth in paragraph (a) above, exceeds that limitation as a
result of the allocation of forfeitures, a reasonable error in
estimating a Participant's remuneration or as a result of such
other circumstances as may be permitted under applicable
Treasury Regulations, the amount of contributions credited to
the Participant's Accounts in that Plan Year shall be adjusted
to the extent necessary to satisfy that limitation in
accordance with the following order of priority:
(1) The Participant's unmatched Deferred Cash
Contributions under Section 3.1 shall be reduced to
the extent necessary. The amount of the reduction
shall be returned to the Participant, together with
any Earnings on the contributions to be returned.
(2) The Participant's matched Deferred Cash Contributions
and corresponding Deferred Matching Contributions
shall be reduced to the extent necessary.
The amount of the reduction attributable to the
Participant's matched Deferred Cash Contributions
shall be returned to the Participant, together with
any Earnings on those contributions to be returned,
and the amount attributable to the Deferred Matching
Contributions shall be forfeited and used to reduce
subsequent contributions payable by an Employer.
(3) The Profit Sharing Contributions allocated to the
Participant under Section 3.3 shall be reduced to the
extent necessary. The amount of the reduction shall
be forfeited and used to reduce subsequent
contributions payable by an Employer.
(4) For limitation years beginning prior to January 1,
2000 only, if a Participant is a member in any
defined benefit plan required to be taken into
account for purposes of applying the combined plan
limitations contained in Section 415(e) of the Code,
then for any year the sum of the defined benefit plan
fraction and the defined contribution plan fraction,
as such terms are defined in said Section 415(e),
shall not exceed 1. If for any year the foregoing
combined plan limitation would be exceeded, the
benefit provided under the defined benefit plan shall
be reduced to the extent necessary to meet that
limitation.
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3.9 Return of Contributions
(a) If the Commissioner of Internal Revenue, on timely application
made after the initial establishment of the Plan, determines
that the Plan is not qualified under Section 401(a) of the
Code, or refuses, in writing, to issue a determination as to
whether the Plan is so qualified, an Employer's contributions
made on or after the date on which that determination or
refusal is applicable shall be returned to an Employer. The
return shall be made within one year after the denial of
qualification. The provisions of this paragraph (a) shall
apply only if the application for the determination is made by
the time prescribed by law for filing an Employer's return for
the taxable year in which the Plan was adopted, or such later
date as the Secretary of the Treasury may prescribe.
(b) An Employer's contributions to the Plan are conditioned upon
their deductibility under Section 404 of the Code. If all or
part of an Employer's deductions for contributions to the Plan
are disallowed by the Internal Revenue Service, the portion of
the contributions to which that disallowance applies shall be
returned to an Employer without interest but reduced by any
investment loss attributable to those contributions. The
return shall be made within one year after the disallowance of
the deduction.
(c) An 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 Deferred Cash Contributions made under
Section 3.1 are returned to an Employer in accordance with the
provisions of this Section 3.9, the elections to reduce
Compensation which were made by Participants on whose behalf
those contributions were made 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 Participants for whom those
contributions were made, provided, however, that if the
contributions are returned under the provisions of paragraph
(a) above, the amount of Deferred Cash Contributions to be
distributed to Participants shall be adjusted to reflect any
investment gains or losses attributable to those
contributions.
3.10 Contributions Not Contingent Upon Profits
An Employer may make contributions to the Plan without regard to the
existence or the amount of profits. Profits shall include both
accumulated earnings and current net taxable income of an Employer
before deduction of federal, state, and local income taxes and before
any contributions made by an Employer to this or any other employee
benefit plan maintained by an Employer, as determined by its
independent public accountants in accordance with generally accepted
accounting principles. Notwithstanding the foregoing, however, this
Plan is designed to qualify as a "profit-sharing plan" for all
purposes of the Code.
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ARTICLE IV: INVESTMENT AUTHORITY AND VALUATION
4.1 General Scope of Responsibility
The Trustee shall be responsible for the management, investment, and
control of the trust fund and disbursements from the trust fund
except as set forth in Section 4.2.
4.2 Directed Investment Account
(a) Investment Funds. Contributions to the Plan shall be invested
in one or more of the available Investment Funds at the
direction of the Participant or Beneficiary. The Plan will
provide an opportunity for a Participant or Beneficiary to
exercise control over assets in his Account and provide a
Participant or Beneficiary an opportunity to choose from a
broad range of investment alternatives. From time to time the
Committee may designate additional Investment Funds, withdraw
the designation of Investment Funds or change designated
Investment Funds. The Plan, therefore, is intended to
constitute a plan described in ERISA Section 404(c) and DOL
Reg. Section 2550.404c-1, and the fiduciaries of the Plan
shall be relieved of liability for any losses that are the
direct and necessary result of investment instructions given
by such Participant or Beneficiary. The Committee may
establish any rule or procedure necessary to meet the
standards for "ERISA Section 404(c) Plans" as defined in DOL
Reg. Section 2550.404c-1.
(b) Management of Funds. The Trustee may keep such amounts of cash
as it, in its sole discretion, shall deem necessary and
advisable as part of the Investment Funds, all within the
limitations of the Plan. Dividends, interest, and other
distributions received on the assets held by the Trustee for
each of the above Investment Funds shall be reinvested in the
respective Investment Fund.
Pending the purchase of Company Stock, if an allowed
investment alternative, and in anticipation of cash
distributions or the need to meet certain administrative
requirements of the Plan, assets to be invested in Company
Stock may be invested in cash and cash equivalents. The
Trustee may, in its sole discretion, for the purpose of
reducing brokerage fees, commissions, and other expenses, or
if stock is not available to be purchased in the market, defer
the purchase of Company Stock until it has accumulated
sufficient funds to purchase quantities which would obtain
such reductions. Assets held in the Grandfathered Stock Fund
may also be invested in cash and cash equivalents.
(c) Investment Allocation Elections. A Participant (or, in the
event of a Participant's death, a Participant's Beneficiary)
shall make one investment allocation election covering each of
his directed investment accounts in accordance with one of the
following options:
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(1) One hundred percent (100%) in any one Investment Fund; or
(2) In more than one of the Investment Funds allocated in
multiples of at least one percent (1%).
If no election is made, the Participant's Account and future
contributions shall be invested in a guaranteed interest fund
or money market fund, or if there is more than one such fund
or no such fund which has been so, the Investment Fund
designated by the Committee for such investments.
(d) Responsibility for Investments. Each Participant (or, in the
event of a Participant's death, a Participant's Beneficiary)
is solely responsible for the selection of his directed
investments. The Trustee, the Committee, the Employer, and the
officers, supervisors, and Employees of the Employer are not
empowered to advise a Participant (or, in the event of a
Participant's death, a Participant's Beneficiary) as to the
manner in which his Account shall be invested. The fact that
an Investment Fund is available to Participants (or, in the
event of a Participant's death, a Participant's Beneficiary)
for investment in the Plan shall not be construed as a
recommendation for investment in that Investment Fund.
With respect to any investment election or other direction by
a Participant (or, in the event of the Participant's death,
the Participant's Beneficiary), none of the Trustee, the Plan
Administrator, the Committee or the Employer shall be under
any duty to question any such direction of a Participant (or,
in the event of the Participant's death, the Participant's
Beneficiary). The Trustee shall comply as promptly as is
practicable with the directions given by a Participant or by a
Beneficiary in accordance with the terms of the Plan. None of
the Trustee, the Plan Administrator, the Committee, or the
Employer shall be responsible or liable for any loss or
expense which may arise from or result from compliance with
any directions from the Participant (or, in the event of the
Participant's death, the Participant's Beneficiary).
(e) Change of Investment Elections. A Participant may change his
investment allocation election each business day of a Plan
Year by giving notice to the Trustee in the manner approved by
the Committee. The changed investment allocation election
shall become effective as of the earliest practicable
Valuation Date following receipt by the Trustee of such notice
of change, in accordance with the Trustee's customary
procedures, and shall be effective only with respect to
subsequent contributions.
If the Participant (or, in the event of the Participant's
death, the Participant's Beneficiary) fails to change his
election, the previous investment election shall remain
effective until the Participant (or Beneficiary) affirmatively
changes his investment election. Subject to the provisions of
the governing documents of the
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Investment Funds involved, if there is a change in designated
Investment Funds and a Participant (or, in the event of the
Participant's death, the Participant's Beneficiary) does not
make a new election, he will be deemed to have designated
investment in the designated Investment Funds most similar to
those previously elected and in the same proportion as
previously elected.
(f) Reallocation of Accounts. A Participant may elect to
reallocate his Accounts among the Investment Funds at any time
by giving notice to the Trustee in the manner approved by the
Committee; provided, however, that the amount of any transfer
must equal at least $250 or, if less, the total value of the
Participant's Accounts in the Investment Fund or Funds from
which the transfer is being made. The transfer or transfers
shall be effective as of the earliest practicable Valuation
Date following the receipt by the Trustee of such notice of
transfer.
(g) Limitations Imposed by Contract. Notwithstanding anything in
this Article 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 Participant
under any other provision of this Plan.
4.3 Investment Fund Gains and Losses
(a) Valuation of Funds. On each Valuation Date, there shall be
allocated to each Participant's Account the proportionate
share of the increase or decrease in the fair market value of
such Participant's Account in each of the Investment Funds
based on the daily weighted average of the balances of the
Participants' Accounts. Whenever an event requires a
determination of the value of a Participant's Account, the
value shall be computed as of the Valuation Date coincident
with or immediately following the date of determination,
subject to the provisions of subsection (b) below.
(b) Discretionary Power of Committee. The Committee reserves the
right to change from time to time the procedures used in
valuing Accounts or crediting (or debiting) such accounts if
it determines, after due deliberation and upon the advice of
counsel 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 assets. In the event of a conflict
between the provisions of this Article and such new
administrative procedures, those new administrative procedures
shall prevail.
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ARTICLE V: VALUATION OF THE ACCOUNTS
A Participant's Accounts in each Investment Fund shall be represented in shares
or units. The value of any such Account on any Valuation Date shall equal the
number of shares or units of the applicable Investment Fund held for the
Participant in such Account multiplied by the value on such Valuation Date of
such a share or unit. Such share value or unit value shall be determined in
accordance with the applicable Investment Fund's customary procedures. The
interest of each Participant in the Company Stock Fund or Grandfathered Stock
Fund shall be expressed as units of the Investment Fund as of a Valuation Date
and shall be determined by using unit accounting. The interest of each
Participant in the Investment Funds (other than the Company Stock Fund or
Grandfathered Stock Fund) shall be expressed in accordance with the valuation
methods and practices of the entity maintaining the Investment Fund.
A Participant's Account shall also be adjusted as of each Valuation Date to
reflect contributions, loan payments, withdrawals, distributions, loan
disbursements, and transfers between Investment Funds since the last Valuation
Date. For purposes of the foregoing sentence:
(a) contributions and loan repayments shall be credited as of the
Valuation Date coincident with or next following the date the
amounts are actually invested in the applicable Investment
Funds, in accordance with the Trustee's customary procedures;
(b) withdrawals, distributions, and loan disbursements shall be
deducted as of the Valuation Date coincident with or next
following the date the required document is processed by the
Trustee, in accordance with its usual procedures; and
(c) transfers between Investment Funds shall be reflected as of
their effective date under Section 4.2(f).
Each calendar quarter a Participant shall be furnished with a statement setting
forth the value of his Accounts and the Vested Portion of his Accounts.
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ARTICLE VI: VESTED PORTION OF ACCOUNTS
6.1 Deferred Account and Rollover Account
A Participant shall at all times be 100% vested in, and have a
nonforfeitable right, to his Deferred Account and his Rollover
Account.
6.2 Deferred Matching Account and Profit Sharing Account
(a) A Participant who is an Employee on or after the Effective
Date shall be vested in, and have a nonforfeitable right to,
his Deferred Matching Account and Profit Sharing Account in
accordance with the following schedule:
Years of Service Percent Vested
1 0%
2 25%
3 50%
4 100%
(b) A Participant described in Section 6.2(b) herein shall be
vested in, and have a nonforfeitable right to, his Deferred
Matching Account and Profit Sharing Account in accordance with
the following schedule:
Years of Service Percent Vested
1 0%
2 25%
3 50%
4 75%
5 100%
The vesting schedule in this Section 6.2(b) will continue to
apply to a Participant: (i) who is not an Employee on or after
the Effective Date; (ii) whose account balance in the IFG Plan
was transferred to the Plan pursuant to the transactions
contemplated by the Merger Agreement; (iii) whose employment
with IFG or any entity that would be deemed a single employer
with IFG under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA terminated after December 31, 1997 and
before the Effective Date; and (iv) who is not rehired before
incurring five or more Breaks in Service.
(c) A Participant described in Section 6.2(c) herein shall be
vested in, and have a nonforfeitable right to, his Deferred
Matching Account and Profit Sharing Account in accordance with
the following schedule:
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Years of Service Percent Vested
1 0%
2 0%
3 20%
4 40%
5 60%
6 80%
7 100%
The vesting schedule in this Section 6.2(c) will continue to
apply to a Participant: (i) who is not an Employee on or after
the Effective Date; (ii) whose account balance in the IFG Plan
was transferred to the Plan pursuant to the transactions
contemplated by the Merger Agreement; (iii) whose employment
with IFG or any entity that would be deemed a single employer
with IFG under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA terminated on or before December 31,
1997; and (iv) who is not rehired before incurring five or
more Breaks in Service.
(d) Notwithstanding the foregoing, a Participant shall be 100%
vested in, and have a nonforfeitable right to, his Deferred
Matching Account and Profit Sharing Account upon his death,
Disability, or Normal Retirement while, in each case, in the
employment of an Employer.
6.3 Disposition of Forfeitures
(a) Upon Termination of Employment of a Participant who was not
fully vested in his Deferred Matching Account or Profit
Sharing Account, the nonvested portion of his Deferred
Matching Account and Profit Sharing Account shall be
segregated in a separate account until the Participant has a
period of Break in Service of five years or receives a
distribution of the Vested Portion of his Accounts, if
earlier. If the former Participant, who has not received a
distribution of the Vested Portion of his Account, is not
reemployed by an Employer before he has a period of Break in
Service of five years or receives such a distribution, the
nonvested portion of his Deferred Matching Account or Profit
Sharing Account so segregated, shall be forfeited. Any amounts
forfeited pursuant to this paragraph (a) shall first be
applied to reinstate the previously forfeited account balances
of former Participants in accordance with Section 6.3(b). The
remaining forfeitures, if any, shall be used to reduce the
Plan's ordinary and necessary administrative expenses for the
Plan Year or to reduce Employer contributions as soon as
practicable after the forfeiture. If the amount of the Vested
Portion of a Participant's Deferred Matching Account or Profit
Sharing Account at the time of his Termination of Employment
is zero, the Participant shall be deemed to have received a
distribution of such vested benefit.
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(b) If a portion of a Participant's Deferred Matching Account or
Profit Sharing Account has been forfeited or is held in a
separate account in accordance with paragraph (a) above, that
amount shall be subsequently restored to the Participant's
Deferred Matching Account or Profit Sharing Account provided
(i) he is reemployed by an Employer before he has a period of
Break in Service of five years, and (ii) he repays to the Plan
during his period of reemployment and within five years of his
date of reemployment an amount in cash equal to the full
amount distributed to him, if any, from the Plan on account of
his Termination of Employment, other than the amount
attributable to Rollover Contributions made under Section 3.4;
provided, however, that he may elect to repay to the Plan all
or part of those amounts as well.
(c) In the event that any amounts to be restored by an Employer to
a Participant's Deferred Matching Account or Profit Sharing
Account are not available from the forfeitures described in
paragraph (a) above, the Employer shall make a special
Employer contribution equal to those amounts.
(d) Repayments under this Section must be made in a lump sum
within five years of a Participant's reemployment. A repayment
shall be invested in the available Investment Funds as the
Participant elects at the time of repayment.
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ARTICLE VII: WITHDRAWALS WHOLE STILL EMPLOYED
7.1 Withdrawal After Age 59 1/2
A Participant who shall have attained age 59 1/2 as of the effective
date of any withdrawal pursuant to this Section may elect to withdraw
in the following order all or part of:
(a) his Rollover Account; then
(b) the Vested Portion of his Deferred Matching Account; then
(c) the Vested Portion of his Profit Sharing Account; and then
(d) his Deferred Account.
No amount may be withdrawn from an Account under this Section unless
the entire amounts available for withdrawal have been withdrawn from
the Accounts preceding such Account in the hierarchy set forth above.
7.2 Hardship Withdrawal
(a) A Participant may elect to withdraw in the following order all or
part of:
(1) his Rollover Account; then
(2) his Deferred Cash Contributions and earnings credited
to his Deferred Account as of December 31, 1988; then
(3) the Vested Portion of his Deferred Matching Account;
and then
(4) the Vested Portion of his Profit Sharing Account,
provided that the Participant demonstrates the existence of a
"hardship" in accordance with paragraphs (b) and (c) below.
The amount to be withdrawn shall not exceed the amount to meet
the immediate and heavy financial need created by the
hardship. No amount may be withdrawn from an Account under
this Section unless the entire amounts available for
withdrawal have been withdrawn from the Accounts preceding
such Account in the hierarchy set forth in the prior sentence.
(b) As a condition for hardship there must exist with respect to
the Participant an immediate and heavy financial need to draw
upon his Accounts. The Committee shall presume the existence
of such immediate and heavy financial need if the requested
withdrawal is on account of any of the following:
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(1) Medical expenses described in Section 213(d) of the Code
incurred by the Participant, his spouse, or any of his
dependents (as defined in Section 152 of the Code), or
necessary for these persons to obtain medical care described
in Section 213(d) of the Code;
(2) Purchase of a principal residence of the Participant
(excluding mortgage payments);
(3) Payment of tuition and related educational fees, including
room and board expenses, for the next twelve months of
post-secondary education of the Participant, his spouse,
children or dependents;
(4) Payment of amounts necessary to prevent eviction of the
Participant from his principal residence or to avoid
foreclosure on the mortgage of his principal residence; or
(5) The inability of the Participant to meet such other expenses,
debts, or 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.
Notwithstanding the foregoing, upon a Participant's request,
the amount necessary to satisfy an immediate and heavy
financial need shall be considered to include the amount of
federal, state, and local income taxes reasonably anticipated
to result from the distribution, based on an assumed tax rate
equal to the aggregate regular withholding rate applicable to
the Participant's base compensation, plus 10% in respect of
the additional tax imposed under Section 72(t) of the Code (if
applicable).
(c) As a condition for a hardship withdrawal, the Participant must
demonstrate that the requested withdrawal is necessary to
satisfy the financial need described in paragraph (b). The
Participant must request, on such form as the Committee shall
prescribe, that the Committee make its determination of the
necessity for the withdrawal solely on the basis of his
application. In that event, the Committee shall make such
determination, provided all of the following requirements are
met:
(1) the Participant has obtained all distributions, other
than distributions available only on account of
hardship, and all nontaxable loans currently
available under all plans of Employers and Affiliated
Employers,
(2) the Participant shall be suspended from making
Deferred Cash Contributions pursuant to Section 3.1
hereof and pre-tax elective or after-tax voluntary
contributions to all other plans of an Employer and
Affiliated Employers; and
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(3) the limitation described in Section 3.1(b) under all
plans of an Employer and Affiliated Employers for the
calendar year following the year in which the
withdrawal is made must be reduced by the
Participant's elective deferrals made in the calendar
year of the distribution for hardship. For purposes
of clause (2), "all other plans of an Employer and
Affiliated Employers" shall include stock option
plans, stock purchase plans, qualified and
nonqualified deferred compensation plans, and such
other plans as may be designated under regulations
issued under Section 401(k) of the Code, but shall
not include health and welfare benefit plans and the
mandatory employee contribution portion of a defined
benefit plan.
7.3 Procedures and Restrictions
To make a withdrawal, a Participant shall give notice to the Trustee
in the manner approved by the Committee. A withdrawal shall be made
as of the earliest practicable Valuation Date following receipt by
the Trustee of the application for withdrawal. The minimum withdrawal
shall be $500 or the total value of the Vested Portion of a
Participant's Accounts available for withdrawal, if less. The amount
of the withdrawal shall be allocated between and among the Investment
Funds in proportion to the value of the Participant's Accounts from
which the withdrawal is made in each Investment Fund as of the date
of the withdrawal. All payments to Participants under this Article
VII shall be made in cash. A withdrawal shall be made in accordance
with the guidelines and administrative procedures established by the
Committee, including, but not limited to, the frequency with which
withdrawals shall be permitted.
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ARTICLE VIII: LOANS TO PARTICIPANTS
8.1 Amount Available
(a) A Participant may borrow, by giving written notice to the
Trustee in the manner approved by the Committee and on
approval by the Committee under such uniform rules as it shall
adopt, an amount which is not less than $700 and, when added
to the outstanding balance of any other loans to the
Participant from the Plan, does not exceed the lesser of
(1) 50% of the Vested Portion of his Accounts, or
(2) $50,000 reduced by the excess, if any, of (A) the
highest outstanding balance of loans to the
Participant 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
Participant from the Plan on the date on which the
loan is made.
(b) The interest rate to be charged on loans shall be the
prevailing commercial rate determined by the Committee based
on a review of prevailing commercial rates in the Employer's
geographical region at the time the Participant's loan
application is approved and (unless and until otherwise
determined by the Committee) shall be one percent above the
prime rate as reported in the Wall Street Journal for the day
on which the loan application is approved. The interest rate
so determined for purposes of the Plan shall be fixed for the
duration of each loan.
(c) The amount of the loan shall be transferred from the
Investment Funds in which each of the Participant's Accounts
is invested to a special "Loan Fund" maintained for the
Participant under the Plan. Such transfer shall be applied to
the Participant's Accounts in a prorata manner, and within
each Account, amounts shall be transferred from the Investment
Funds in a pro rata manner. The Loan Fund shall consist solely
of the amount of the Participant's Accounts transferred to the
Loan Fund and shall be invested solely in the loan made to the
Participant. The amount of the Participant's Accounts
transferred to the Loan Fund shall be pledged as security for
the loan. Repayment of principal on the loan will reduce the
amount held in the Participant's Loan Fund. Those repayments,
together with the attendant interest payments, will be
recredited to the Participant's Accounts in the order in which
the loan proceeds were withdrawn, and the repayments and
attendant interest payments will be reinvested in accordance
with the Participant's investment election in effect on the
date of the repayment.
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8.2 Terms
(a) In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(1) An application for a loan by a Participant shall be
made to the Trustee in the manner approved by the
Committee, whose action in approving or disapproving
the application shall be final;
(2) Each loan shall be evidenced by a promissory note
payable to the Plan;
(3) The period of repayment for any loan shall be arrived
at by mutual agreement between the Committee and the
Participant, but that period shall not exceed five
years unless the loan is used to purchase the
principal residence of the Participant, in which case
the loan term shall not exceed ten years;
(4) Payments of principal and interest will be made by
payroll deductions or in a manner agreed to by the
Participant and the Committee in substantially level
amounts based on a weekly or semi-monthly repayment
schedule, but no less frequently than quarterly, in
an amount sufficient to amortize the loan over the
repayment period;
(5) A loan may be prepaid in full as of any date without
penalty;
(6) Generally, a Participant may not have more than one
(1) loan outstanding at any given time; however, a
Participant may have multiple loans outstanding if
such loans are the result of a corporate acquisition
and such loans were transferred to the Plan as part
of a Rollover Contribution. Notwithstanding the
foregoing, a loan shall not be deemed outstanding if
all or a portion of it is to be used (determined at
the time the loan is made) to repay an existing loan
under the Plan to such same Participant;
(7) In the event any loan remains outstanding at the time
a distribution (other than an additional loan) is
otherwise scheduled to occur and such distribution
would reduce the prescribed security for, or
otherwise violate limitations with regard to the
loan, then the amount of the distribution will be
reduced by all or a portion of the outstanding loans
to prevent such reduction;
(8) All loans made to Participants while actively
employed by the Employer shall become immediately due
and payable upon the Participant's Termination of
Employment;
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(9) Any loan shall be subject to such additional
acceleration provisions as shall be determined by the
Committee to be commercially reasonable; and
(10) Loan repayments will be suspended under this Plan as
permitted under Section 414(u)(4) of the Code.
(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 Participant's
Accounts under the Plan to satisfy the debt; however, the Plan
shall not levy against any portion of the Loan Fund
attributable to amounts held in the Participant's Deferred
Account, Deferred Matching Account or Profit Sharing Account
until such time as a distribution of such Account could
otherwise be made under the Plan. Thus, if under the terms of
the Plan, distribution is not then permitted, the Participant
will have a deemed distribution for tax purposes, but the loan
will remain outstanding.
(c) Any additional rules or restrictions as may be necessary to
implement and administer the loan program shall be in writing
and communicated to employees. Such further documentation is
hereby incorporated into the Plan by reference, and the
Committee is hereby authorized to make such revisions to these
rules as it deems necessary or appropriate, on the advice of
counsel. Furthermore, such loan program may be modified or
amended by the Committee from time to time, in the Committee's
discretion, without the necessity of amending this Article
XIII.
(d) To the extent required by law and under such rules as the
Committee shall adopt, loans shall also be made available on a
reasonably equivalent basis to any Beneficiary or former
Employee (i) who maintains an Account balance under the Plan
and (ii) who is still a party-in-interest (within the meaning
of Section 3(14) of ERISA).
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ARTICLE IX: DISTRIBUTION OF ACCOUNTS UPON
TERMINATION OF EMPLOYMENT
9.1 Eligibility
Upon a Participant's Termination of Employment, the Vested Portion of
his Accounts, as determined under Article VI, shall be distributed as
provided in this Article.
9.2 Forms of Distribution
The distribution of the Vested Portion of a Participant's Accounts
shall be made in one, or any combination, of the following methods,
at the election of the Participant or Beneficiary: (a) by payment in
a lump sum; or (b) by payment in monthly, quarterly, or annual
installments over a fixed, reasonable period of time, not exceeding
the life expectancy of the Participant, or the joint life and last
survivor expectancy of the Participant and his Beneficiary. A
Participant who has directed the investment of all or a portion of
his Account balance into an Investment Fund invested in Company Stock
may, at his sole discretion, elect to receive any part or all of a
distribution from such Investment Fund in the form of Company Stock,
provided that the Participant's nonforfeitable interest in such
Company Stock Fund is equal to or greater than the fair market value
of 100 shares of Company Stock as of the distribution date. The
distribution shall consist of whole shares of Company Stock in
amounts of 100 or more shares only, and any remaining portion of the
Participant's Accounts will be paid in cash. All shares of Company
Stock distributed will be transferred in one stock certificate.
9.3 Commencement of Payments
(a) Normal Distribution. Unless a Participant otherwise elects,
distribution of the Vested Portion of a Participant's Accounts
shall be made as soon as practicable following the
Participant's Normal Retirement. However, distribution shall
begin no later than 60 after the end of the Plan Year in which
occurs the latest of the following: (i) the Participant's
Termination of Employment; (ii) the Participant's 65th
birthday; or (iii) the tenth anniversary of the date on which
the Participant commenced participation in the Plan.
(b) Early Distribution. In lieu of the normal distribution as
described above, a Participant may elect to have the
distribution of the Vested Portion of his Accounts made as
soon as administratively practicable on any Valuation Date
coincident with or following his Termination of Employment or
Early Retirement which is before the date described in
paragraph (a) above. A Participant's election for early
distribution of benefits must be made in accordance with such
procedures as the Committee shall prescribe.
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(c) Death Benefit. In the case of the death of a Participant
before his benefits would otherwise commence, the Vested
Portion of his Accounts shall be distributed to his
Beneficiary in the form elected by the Participant or
Beneficiary or, in the absence of an election, in one lump sum
as soon as administratively practicable following the
Participant's date of death.
(d) Cashout. Notwithstanding the provisions of paragraphs (a),
(b), and (c), if the value of the Vested Portion of the
Participant's Accounts amounts to $5,000 or less at the time
of the Participant's Termination of Employment and at all
times thereafter prior to distribution, a lump sum payment
shall automatically be made without the Participant's consent
as soon as administratively practicable following the
Participant's Termination of Employment.
(e) Disability Benefit. In the event a Participant terminates
employment due to Disability prior to his Early Retirement or
Normal Retirement, the Trustee shall distribute to such
Participant all amounts credited to his Accounts as soon as
administratively practicable on any Valuation Date coincident
with or following his Termination of Employment.
Notwithstanding the foregoing, such distribution shall be made to the
Participant on or as soon as administratively feasible (and in
accordance with the Plan's administrative procedures) following the
Valuation Date following the first day for which an amount is
payable, as requested in writing by the Participant, without regard
to administrative delay and not the actual payment date (the "Benefit
Starting Date"). The Benefit Starting Date may not be more than
ninety (90) days after such request and, except as provided below,
may not be less than thirty (30) days after such request. The
Participant's distribution shall be based on the fair market value of
a Participant's Account as of the actual date the Company Stock or
any other investments held by a Participant's Account are sold,
provided that no distribution may be made until the Committee has
provided the Participant with a notice as to his rights and benefits
under the Plan not more than ninety (90) days or less than thirty
(30) days prior to the Participant's Benefit Starting Date.
Notwithstanding the foregoing, a Participant may elect a Benefit
Starting Date earlier than thirty (30) days, but no less than seven
(7) days, after receiving such notice from the Committee, provided
that:
(a) the Participant has been clearly informed that he 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
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
Actual payment of benefits may be reasonably delayed beyond a
Participant's Benefit Starting Date for administrative purposes.
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9.4 Age 70 1/2 Required Distribution
(a) The distribution of a Participant's Accounts must begin no
later than the April 1 of the calendar year following the
later of (i) the calendar year in which the Participant
attains age 70 1/2, or (ii) the calendar year in which the
Participant retires, provided that commencement of
distributions while in active service shall be required as
provided in clause (i) with respect to a Participant who is a
5-percent owner of an Employer (as defined in Section
416(i)(1) of the Code). Notwithstanding the foregoing, a
Participant who is an Employee of the Employer and who attains
age 70 1/2prior to January 1, 1999 shall be entitled to elect
to receive a distribution under the Plan while an Employee no
later than the April 1 following the end of the calendar year
in which he attains age 70 1/2.
(b) In the event a Participant is required to begin receiving
payments while in service pursuant to the provisions of
paragraph (a) above, the payment shall be in one lump sum
unless the Participant has made a valid election to receive an
alternative form of payment pursuant to this Article.
9.5 Status of Accounts Pending Distribution
Until distributed under Section 9.3 or 9.4, the Accounts of a
Participant who is entitled to a distribution shall continue to be
invested as part of the Funds of the Plan.
9.6 Proof of Death and Right of Beneficiary or Other Person
The 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 Participant as the Committee
may deem proper, and its determination of the right of that
Beneficiary or other person to receive payment shall be conclusive.
9.7 Distribution Limitation
(a) Notwithstanding any other provision of this Article IX, all
distributions from this 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.
(b) Payments may be made in cash or property, except that Company
Stock may be distributed in kind in accordance with Section
9.2.
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9.8 Rollover Distributions
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee's election under this
Section 9.8, a Distributee may elect, at the 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. The Committee shall have the authority to set
minimums and maximums with respect to Eligible Rollover
Distributions and adopt other guidelines and administrative
procedures that are necessary or desirable to administer the
direct rollover rules under this Section 9.8.
(b) Definitions. For purposes of paragraph (a) above, the
following terms and phrases shall mean:
(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
of 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.
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ARTICLE X: ADMINISTRATION OF PLAN
10.1 Plan Administration
The general administration of the Plan and the responsibility for
carrying out the provisions of the Plan shall be upon the Company,
acting by and through the Committee. The Company shall be the "plan
administrator" and the "named fiduciary" for the operation and
administration of the Plan under the provisions of ERISA. The
Committee shall consist of not less than two persons appointed from
time to time by the Board of Directors to serve at the pleasure of
the Board of Directors. Any person who is appointed a member of the
Committee shall signify his acceptance by filing written acceptance
with the Board of Directors and the secretary of the Committee. Any
member of the Committee may resign by delivering his written
resignation to the Board of Directors and the Secretary of the
Committee; such resignation shall become effective upon delivery or
at any later date specified therein.
10.2 Duties of Committee
The members of the Committee shall elect a chairman from their number
and a secretary who may be but need not be one of the members of the
Committee; may appoint from their number such subcommittees with such
powers as they shall determine; may authorize one or more of their
number or any agent to execute or deliver any instrument or make any
payment on their behalf; may retain counsel, employ agents and
provide for such clerical, accounting, and consulting services as
they may require in carrying out the provisions of the Plan; and may
allocate among themselves or delegate to other persons all or such
portion of their duties under the Plan, other than those granted to
the Trustee under the trust agreement adopted for use in implementing
the Plan, as they, in their sole discretion, shall decide.
10.3 Individual Accounts
The Committee shall maintain, or cause to be maintained, records
showing the individual balances in each Participant's Accounts.
However, maintenance of those records and Accounts shall not require
any segregation of the Funds of the Plan.
10.4 Meetings
The Committee shall hold meetings upon such notice, at such place or
places, and at such time or times as it may from time to time
determine.
10.5 Action of Majority
Any act which the Plan authorizes or requires the Committee to do may
be done by a majority of its members. The action of that majority
expressed from time to time by a
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vote at a meeting or in writing without a meeting shall constitute
the action of the Committee and shall have the same effect for all
purposes as if assented to by all members of the Committee at the
time in office.
10.6 Compensation and Bonding
No member of the Committee shall receive any compensation from the
Plan for his services as such. The Plan shall pay or reimburse the
members of the Committee for all reasonable expenses incurred unless
the Employer shall pay or reimburse the members of the Committee for
such expenses. 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.
10.7 Establishment of Rules
Subject to the limitations of the Plan, the Committee may make such
rules and regulations as it deems necessary or proper for the
administration of the Plan and the transaction of business
thereunder; may interpret the Plan; may decide on questions as to the
eligibility of any person to receive benefits and the amount of such
benefits; may authorize the payment of benefits in such manner and at
such times as it may determine; may prescribe forms or telephonic or
electronic means to be used for making various elections under the
Plan, for designating beneficiaries or for changing or revoking such
designations, for applying for benefits and for any other purposes of
the Plan, which prescribed forms in all cases must be executed and
filed with the Committee (unless the Committee shall otherwise
determine) and may take such other action or make such determinations
in accordance with the Plan as it deems appropriate. To the extent
that the form or method prescribed by the Committee to be used in the
operation and administration of the Plan does not conflict with the
terms and provisions of the Plan, such form shall be evidence of (i)
the Committee's interpretation, construction and administration of
this Plan and (ii) decisions or rules made by the Committee pursuant
to the authority granted to the Committee under the Plan.
10.8 Prudent Conduct
The members of the 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 of a similar
situation.
10.9 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 and/or the Funds of
the Plan.
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10.10 Limitation of Liability
An Employer, an Affiliated Employer, the directors of an Employer or
an Affiliated Employer, the members of the Committee, or any officer,
employee, or agent of an Employer or Affiliated Employer shall not
incur any liability individually or on behalf of any other
individuals or on behalf of an Employer or an Affiliated 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 an Employer from a responsibility or
liability for any fiduciary responsibility, obligation, or duty under
Part 4, Title I of ERISA. Further, no member of the Committee shall
be personally liable merely by virtue of any instrument executed by
him or on his behalf as a member of the Committee.
10.11 Indemnification
The members of the Committee, and the directors, officers, and
employees of an Employer or an Affiliated Employer shall be
indemnified to the full extent permitted by law and the Company's
Certificate of Incorporation and by-laws, and to the extent not
covered by insurance, 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
failure to act as to which any such person shall be adjudged in such
action to be liable for gross negligence or willful misconduct. The
foregoing indemnification shall be from the funds of the Plan to the
extent of those funds and to the extent permitted under applicable
law; otherwise from the assets of an Employer or an Affiliated
Employer.
10.12 Appointment of Investment Manager
The Committee may, in its discretion, appoint one or more investment
managers (within the meaning of Section 3(38) of ERISA) to manage
(including the power to acquire and dispose of) all or part of the
assets of the Plan, as the 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.
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ARTICLE XI: MANAGEMENT OF FUNDS
11.1 Trust Agreement
All the funds of the Plan shall be held by the Trustee appointed from
time to time by the Board of Directors under a trust agreement
adopted, or as amended, by the Board of Directors for use in
providing the benefits of the Plan and paying its expenses not paid
directly by an Employer. An Employer shall have no liability for the
payment of benefits under the Plan nor for the administration of the
funds paid over to the Trustee.
11.2 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 Participants and
other persons entitled to benefits under the Plan. 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.
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ARTICLE XII: CLAIMS REVIEW PROCEDURE
12.1 Claims Procedure
Claims for benefits under the Plan may be filed with the Committee on
forms supplied by the Employer. Written notice of the disposition of
a claim shall be furnished to the claimant within 90 days after the
application is filed provided that in the event of special
circumstances such period may be extended to 180 days. In the event
the claim is denied, the reasons for the denial shall be specifically
set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and,
where appropriate, an explanation as to how the claimant can perfect
the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review procedure.
12.2 Claims Review Procedure
Any Participant or Beneficiary who has been denied a benefit by a
decision of the Committee pursuant to Section 12.1 shall be entitled
to request the Committee to give further consideration to his claim
by filing with the Committee (on a form which may be obtained from
the Committee) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim
should be allowed, shall be filed with the Committee no later than 60
days after receipt of the written notification provided for in
Section 12.1. The Committee shall then conduct a hearing within the
next 60 days, at which the claimant may be represented by an attorney
or any other representative of his choosing and at which the claimant
shall have an opportunity to submit written and oral evidence and
arguments in support of his claim. At the hearing (or prior thereto
upon 5 business days written notice to the Committee) the claimant or
his representative shall have an opportunity to review all documents
in the possession of the Committee which are pertinent to the claim
at issue and its disallowance. Either the claimant or the Committee
may cause a court reporter to attend the hearing and record the
proceedings. In such event, a complete written transcript of the
proceedings shall be furnished to both parties by the court reporter.
The full expense of any such court reporter and such transcripts
shall be borne by the party causing the court reporter to attend the
hearing. A final decision as to the allowance of the claim shall be
made by the Committee within 60 days of receipt of the appeal (unless
there has been an extension of 60 days due to special circumstances,
provided the delay and the special circumstances occasioning it are
communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for the
decision and specific references to the pertinent Plan provisions on
which the decision is based. All interpretations, determinations and
decisions of the Committee with respect to any claim shall be made by
the Committee in its sole discretion based on the Plan and documents
presented to it and shall be final, conclusive and binding.
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ARTICLE XIII: GENERAL PROVISIONS
13.1 Nonalienation
Except as required by any applicable law, no benefit under the Plan
shall in any manner be anticipated, assigned, or alienated, 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, a spouse, former spouse, child or
other dependent of a Participant the right to receive all or a
portion of the Participant's benefits under the Plan for the
purpose of providing child support, alimony payments, or
marital property rights to that spouse, child, or dependent;
(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 by the Committee.
Any distribution due an alternate payee under a qualified domestic
relations order may be made as soon as practicable following the
earliest date specified in such order (even if the Participant has
not reached the "earliest retirement age" under Section 414(p) of the
Code), or as otherwise permitted under such order pursuant to an
agreement between the Plan and the alternate payee, provided,
however, that if the amount of the distribution exceeds $5,000, the
alternate payee must consent to the distribution. The Committee may,
in its sole discretion, adopt such guidelines and procedures relating
to the administration and interpretation of qualified domestic
relations orders as it deems appropriate or necessary.
Notwithstanding anything herein to the contrary, the provisions of
this Section 13.1 shall not apply to any offset of a Participant's
benefits provided under the Plan against an amount that the
Participant is ordered or required to pay to the Plan under any of
the circumstances set forth in Section 401(a)(13)(C) of the Code and
Sections 206(d)(4) and 206(d)(5) of ERISA.
13.2 Conditions of Employment Not Affected by Plan
The establishment 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 to discharge any
Employee and to treat him without regard to the effect which that
treatment might have upon him as a Participant or potential
Participant of the Plan.
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13.3 Facility of Payment
If the Committee shall find that a Participant or other person
entitled to a benefit is unable to care for his affairs because of
illness or accident or is a minor, the 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.
13.4 Information
Each Participant, 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 Committee the information that it shall
require to establish his rights and benefits under the Plan.
13.5 Top-Heavy Provisions
(a) The following definitions apply to the terms used in this
Section:
(1) "Applicable determination date" means the last day of
the later of the first Plan Year or the preceding
Plan Year;
(2) "Top-heavy ratio" means the ratio of (A) the value of
the aggregate of the Accounts under the Plan for key
employees to (B) the value of the aggregate of the
Accounts under the Plan for all key employees and
non-key employees;
(3) "Key employee" means an employee who is in a category
of employees determined in accordance with the
provisions of Section 416(i)(1) and (5) of the Code
and any regulations thereunder, and where applicable,
on the basis of the employee's remuneration (defined
as set forth in Section 3.8(c)) from an Employer;
(4) "Non-key employee" means any Employee who is not a
key employee;
(5) "Applicable Valuation Date" means the Valuation Date
coincident with or immediately preceding the last day
of the first Plan Year or the preceding Plan Year,
whichever is applicable;
(6) "Required aggregation group" means any other
qualified plan(s) of an Employer in which there are
members who are key employees or which
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enable(s) the Plan to meet the requirements of Section
401(a)(4) or 410 of the Code; and
(7) "Permissive aggregation group" means each plan in the
required aggregation group and any other qualified
plan(s) of an Employer in which all members are
non-key employees, if the resulting aggregation group
continues to meet the requirements of Sections
401(a)(4) and 410 of the Code.
(b) For purposes of this Section, the Plan shall be "top-heavy"
with respect to any Plan Year if as of the applicable
determination date the top-heavy ratio exceeds 60%. The
top-heavy ratio shall be determined as of the applicable
Valuation Date in accordance with Section 416(g)(3) and (4) of
the Code and Article V of this Plan, and shall take into
account any contributions made after the applicable Valuation
Date but before the last day of the Plan Year in which the
applicable Valuation Date occurs. For purposes of determining
whether the Plan is top-heavy, the account balances under the
Plan will be combined with the account balances or the present
value of accrued benefits under each other plan in the
required aggregation group, and, in an Employer's discretion,
may be combined with the account balances or the present value
of accrued benefits under any other qualified plan in the
permissive aggregation group. Distributions made with respect
to a Participant under the Plan during the five-year period
ending on the applicable determination date shall be taken
into account for purposes of determining the top-heavy ratio;
distributions under plans that terminated within such
five-year period shall also be taken into account, if any such
plan contained key employees and therefore would have been
part of the required aggregation group.
(c) For any Plan Year with respect to which the Plan is top-heavy,
an additional Employer contribution shall be allocated on
behalf of each Participant (and each Employee eligible to
become a Participant) who is a non-key employee, and who has
not separated from service as of the last day of the Plan
Year, to the extent that the contributions made on his behalf
under Sections 3.2 and 3.3 for the Plan Year (and not needed
to meet the contribution percentage test set forth in Section
3.7(b)) would otherwise be less than 3% of his remuneration.
However, if the greatest percentage of remuneration
contributed on behalf of a key employee under Sections 3.1,
3.2, and 3.3 for the Plan Year would be less than 3%, that
lesser percentage shall be substituted for "3%" in the
preceding sentence. Notwithstanding the foregoing provisions
of this paragraph (c), no minimum contribution shall be made
under this Plan with respect to a Participant (or an Employee
eligible to become a Participant) if the required minimum
benefit under Section 416(c)(1) of the Code is provided to him
by any other qualified pension plan of an Employer or an
Affiliated Employer. For the purposes of this paragraph (c),
remuneration has the same meaning as set forth in Section
3.8(c).
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13.6 Prevention of Escheat
If the Committee cannot ascertain the whereabouts of any person to
whom a payment is due under the Plan, the Committee may, no earlier
than five (5) years from the date such payment is due, mail a notice
of such due and owing payment by registered mail, return receipt
requested to the last known address of such person, as shown on the
records of the Committee or an Employer. If such person has not made
written claim therefor within three months of the date of the
mailing, the Committee may, if it so elects and upon receiving advice
from counsel to the Plan, after requesting the cooperation of the
Social Security Administration or other appropriate entity to
ascertain the whereabouts of such person, direct that such payment
and all remaining payments otherwise due such person be canceled on
the records of the Plan and the amount thereof applied to reduce the
contributions of an Employer. Upon such cancellation, the Plan and
the trust shall have no further liability therefor except that, in
the event such person or his beneficiary later notifies the Committee
of his whereabouts and requests the payment or payments due to him
under the Plan, the amount so applied shall be paid to him in
accordance with the provisions of the Plan applicable to the
restoration of forfeitures.
13.7 Transfers of Trust Fund Assets
The Committee may make a transfer of liabilities and corresponding
assets from the trust fund to trusts of plans of an Affiliated
Employer and other plans qualified under Section 401(a) of the Code,
subject to Section 14.2. The Committee may accept a transfer of
liabilities and corresponding assets from the trustees of plans of an
Affiliated Employer and other plans qualified under Section 401(a) of
the Code. Any assets received under this Section shall thereafter
constitute part of the corpus of the trust fund. All such transfers
and allocations shall be made in accordance with ERISA.
13.8 Construction
(a) The Plan shall be construed, regulated, and administered to
meet the minimum requirements of applicable federal laws,
including the Employee Retirement Income Security Act of 1974,
as amended (ERISA), the Americans with Disabilities Act of
1990 (ADA), the Family and Medical Leave Act of 1993 (FMLA),
and the Uniformed Services Employment and Reemployment Act of
1994 (USERRA). To the extent a Plan provision is contrary to
or fails to address the minimum requirements of an applicable
federal law, the Plan shall provide the coverage or benefit
necessary to comply with such minimum requirements. Except to
the extent preempted by applicable federal law, the Plan shall
be construed, administered, and governed in all respects under
and by the laws of the State of New York.
(b) The masculine pronoun shall mean the feminine wherever
appropriate.
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(c) 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.
13.9 Reemployed Veterans
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service shall be provided in accordance with Section 414(u)
of the Code.
13.10 Adjustments for Changes in Capital Structure
The existence of this Plan and the Company Stock Fund and the
Grandfathered Stock Fund shall not affect in any way the right or
power of the Board of Directors or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any
merger, consolidation or separation, including a spin-off, or other
distribution of stock or property of the Company or Affiliated
Employers, any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting Company Stock, the
authorization or issuance of additional shares of Common Stock, the
dissolution or liquidation of the Company or Affiliated Employers,
any sale or transfer of all or part of its assets or business or any
other corporate act or proceeding.
In the event of any change in the capital structure or business of
the Company, IFG or AIMCO by reason of any stock dividend or
extraordinary dividend, stock split or reverse stock split,
recapitalization, reorganization, merger, consolidation, spin-off or
exchange of shares, distribution with respect to its outstanding
common stock or other capital stock, reclassification of its capital
stock, any sale or transfer of all or part of the Company's, IFG's
and/or AIMCO's (as applicable) assets or business, or any similar
change affecting the Company's, IFG's and/or AIMCO's (as applicable)
capital structure or business and it is determined that an adjustment
is appropriate under this Plan, then the aggregate number and kind of
shares which thereafter may be issued under this Plan, the number and
kind of shares or other property (including cash) held under this
Plan shall be appropriately adjusted consistent with such change or
transaction in a manner to prevent substantial dilution or
enlargement of the rights granted to, or available for, Participants
under this Plan or as otherwise necessary to reflect the change or
transaction, and any such adjustment determined in good faith by the
Company shall be binding and conclusive on the Company and all
Participants, Beneficiaries and employees and their respective heirs,
executors, administrators, successors and assigns.
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13.11 Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")
Solely to the extent required under Section 16(b) of the Exchange
Act, all elections and transactions under the Plan by persons subject
to Section 16 of the Exchange Act involving shares of Company Stock
are intended to comply with all exemptive conditions under Rule 16b-3
promulgated under the Exchange Act. The Company may establish and
adopt written administrative guidelines designed to facilitate
compliance with Section 16(b) of the Exchange Act, as it may deem
necessary or proper for the administration and operation of the Plan.
13.12 Voting and Other Rights
(a) Voting of Company Stock or Grandfathered Stock. The manner in
which the Company Stock or Grandfathered Stock held in the
Company Stock Funds shall be voted on each matter brought
before an annual or special stockholders' meeting of the
Company, IFG or AIMCO and the provisions relating to the
pass-through of voting rights to Participants (and in the
event of any Participant's death, the Participant's
Beneficiary) shall be governed by the terms of the trust
agreement between the Company and the Trustee.
(b) Tender and Exchange Offers on Company Stock or Grandfathered
Stock. The manner in which to respond to a tender or exchange
offer for Company Stock or Grandfathered Stock and the
provisions relating to the pass-through of tender and exchange
rights to Participants (and in the event of any Participant's
death, the Participant's Beneficiary) shall be governed by the
terms of the trust agreement between the Company and the
Trustee.
(c) Participant Deemed Named Fiduciary. Notwithstanding anything
in the Plan to the contrary, each Participant is, for purposes
of this Section, hereby designated a "named fiduciary", within
the meaning of Section 402(a)(1) of ERISA, with regard to his
Account.
(d) Confidentiality. It is intended that the Company Stock Fund be
administered and operated in accordance with Section 404(c) of
ERISA and the regulations thereunder. For such purposes, the
Trustee shall be the identified fiduciary and shall be
responsible for, without limitation, the implementation and
monitoring of confidentiality procedures.
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ARTICLE XIV: AMENDMENT, MERGER, AND TERMINATION
14.1 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 for any reason in whole or in any part any or all of the
provisions of the Plan by duly adopted resolution. 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 decreasing the
balance of the Accounts of any Participant or of reducing the
nonforfeitable percentage of the balance of the Accounts of a
Participant 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.
14.2 Merger, Consolidation, or Transfer
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.
14.3 Additional Participating Employers
(a) If any company is or becomes an Affiliated Employer, the
employees of that Affiliated Employer will, subject to the
satisfaction of the requirements of Section 2.1, be eligible
to participate in the Plan, except as provided in the last
paragraph of Section 1.4 herein. In that event, or if any
persons become 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
Board of Directors shall determine to what extent, if any,
previous service with the Affiliated Employer 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) Notwithstanding (a) above, the following rights are
specifically reserved to the Company:
(1) the right to appoint the members of the Committee, as
set forth herein, is specifically reserved to the
Company so long as the Company participates under the
Plan; provided that an Affiliated Employer which
participates in
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the Plan may appoint an advisory committee of such
composition and size as it may determine to advise
the Committee on any matters affecting such
Affiliated Employer or its employees who are
Participants under the Plan. The Committee shall be
entitled to rely upon any information furnished it by
the Affiliated Employer or its employees who are
Participants under the Plan. The Committee shall be
entitled to rely upon any information furnished it by
the Affiliated Employer appointing such advisory
committee, but in no event shall the existence of
such advisory committee modify or otherwise limit any
of the powers or duties of the Committee under the
Plan;
(2) the right to direct, appoint, remove, approve the
accounts of, or otherwise deal with the Trustee, as
set forth herein, is specifically reserved to the
Company so long as the Company participates under the
Plan;
(3) the right to amend the Plan and trust, as set forth
herein, is specifically reserved to the Company so
long as the Company participates under the Plan; and
any such amendment, unless otherwise specified
herein, shall be fully binding with respect to such
participation by any Affiliated Employer; provided
that this reservation shall in no event be construed
to prevent any Affiliated Employer from terminating
at any time, in the manner set forth herein, its
participation under the Plan.
Each Affiliated Employer which participates in the Plan shall
be liable for and shall pay at least annually to the Company
its fair share of the expenses of operating the Plan and
trust, including its share of any Trustee's fees. The amount
of such charges to each Affiliated Employer shall be
determined by the Committee in its sole discretion; provided
that, except with respect to charges incurred solely on
account of a particular Affiliated Employer, an Affiliated
Employer shall not be charged for a greater portion of any
expenses of Plan operation than the ratio that the number of
Participants who are or were its Employees bears to the total
of all Participants nor for a greater proportion of any
Trustee's fees than the ratio that the portion of the trust
fund pertaining to Participants who are or were its Employees
bears to the total trust fund.
(c) Any Affiliated Employer may terminate its participation in the
Plan upon appropriate action by it at any time. In that event
the Funds of the Plan held on account of Participants in the
employ of that Affiliated Employer, and any unpaid balances of
the Accounts of all Participants who have separated from the
employ of that Affiliated Employer shall be determined by the
Committee. Those funds shall be distributed as provided in
Section 14.4 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 Committee, continuing the
Plan as a separate plan for the employees of that company
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 the members of the
Committee.
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14.4 Termination of Plan
(a) The Board of Directors, by duly adopted resolution, may
terminate the Plan in whole or in part, 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 Participants to their
Accounts under the Plan as of the date of the termination or
discontinuance shall be nonforfeitable. The total amount in
each Participant's Accounts shall be distributed, as the
Committee shall direct, to him or for his benefit or continued
in trust for his benefit.
(b) Upon termination of the Plan, Deferred Cash Contributions,
with earnings thereon shall be distributed to Participants as
soon as administratively practicable, provided that (i)
neither an Employer nor an Affiliated Employer establishes or
maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Section 4975(e)(7)
of the Code), and (ii) payment is made to the participant in
the form of a lump sum.
14.5 Distribution of Accounts Upon a Sale of Assets
Upon the disposition by an Employer of substantially all of the
assets (within the meaning of Sections 401(k)(10)(a)(ii) and
409(d)(2) of the Code) used by such Employer in a trade or business,
Deferred Cash Contributions, with earnings thereon, may be
distributed to those Participants who continue in employment with the
employer acquiring such assets, provided that (a) an Employer
continues to maintain the Plan and (b) payment is made to the
Participant in the form of a lump sum distribution (as defined in
Section 402(d)(4) of the Code, without regard to clauses (i) through
(iv) of subparagraph (A), subparagraph (B) or subparagraph (F)
thereof).
14.6 Distribution of Accounts upon a Sale of a Subsidiary
Upon the disposition by an Employer of its interest in a subsidiary
(within the meaning of Sections 401(k)(10)(a)(iii) and 409(d)(3) of
the Code), Deferred Cash Contributions, with earnings thereon, may be
distributed to those Participants who continue in employment with
such subsidiary, provided that (a) an Employer continues to maintain
the Plan, and (b) payment is to the Participant in the form of a lump
sum distribution (as defined in Section 402(d)(4) of the Code,
without regard to clauses (i) through (iv) of subparagraph (A),
subparagraph (B) or subparagraph (F) thereof).
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IN WITNESS WHEREOF, this Plan has been executed this day of
, 1998.
INSIGNIA/ESG HOLDINGS, INC.
By:
Title:
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