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Exhibit 99.1
APW LTD. 401(K) PLAN
Effective July 1, 2000
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APW LTD. 401(K) PLAN
TABLE OF CONTENTS
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PREAMBLE P-1
ARTICLE I
DEFINITION OF TERMS 1-1
1.01 "Account" 1-1
1.02 "Affiliated Company" 1-1
1.03 "Anniversary Date" 1-1
1.04 "Annual Addition" 1-1
1.05 "Beneficiary" 1-2
1.06 "Break in Service" 1-3
1.07 "Code" 1-4
1.08 "Committee" 1-4
1.09 "Company" 1-4
1.10 "Company Stock Fund" 1-4
1.11 "Disability" 1-4
1.12 "Eligible Compensation" 1-4
1.13 "Eligible Employee" 1-5
1.14 "ERISA" 1-5
1.15 "Fund" 1-5
1.16 "Hours of Service" 1-6
1.17 "Participant" 1-7
1.18 "Plan" 1-7
1.19 "Plan Administrator" 1-7
1.20 "Plan Year" 1-7
1.21 "Retirement Date" 1-7
1.22 "Trust" 1-7
1.23 "Trustee" 1-7
1.24 "Valuation Date" 1-7
1.25 "Vesting Service" 1-7
ARTICLE II
PLAN PARTICIPATION 2-1
2.01 Commencement of Participation 2-1
2.02 Transfers to/from Eligible Employee Status 2-1
2.03 Rehire After Termination of Employment 2-1
2.04 No Guaranty of Employment. 2-1
ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS TO PARTICIPANTS' ACCOUNTS 3-1
3.01 APW Ltd. Core Contributions 3-1
3.02 Employee Pre-Tax Contributions 3-2
3.03 401(k) Matching Contributions 3-2
3.04 Prior Company Contributions 3-4
3.05 Employee After-Tax Contributions 3-4
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3.06 Rollover Contributions 3-5
3.07 Limitations on Annual Additions 3-5
ARTICLE IV
VESTING 4-1
4.01 Full Vesting Dates 4-1
4.02 Vesting Schedule 4-1
4.03 Election of Former Vesting Schedule 4-2
4.04 Forfeitures 4-2
4.05 Vesting Credit Following Termination 4-3
ARTICLE V
INVESTMENT ELECTIONS AND VALUATION OF ACCOUNTS 5-1
5.01 Investment Elections 5-1
5.02 Investment Diversification of APW Ltd. Core
and 401(k) Matching Contributions 5-1
5.03 Account Adjustments to Reflect Net Worth of the Trust Fund. 5-2
5.04 Net Worth 5-2
5.05 Certain Segregated Accounts 5-2
5.06 Responsibility to Maintain Account Balances 5-2
5.07 Participant Loans 5-2
ARTICLE VI
DISTRIBUTIONS 6-1
6.01 Time of Distribution 6-1
6.02 When Distribution of Accounts Shall Commence 6-1
6.03 How Accounts Are To Be Distributed 6-2
6.04 Required Distribution Rules 6-3
6.05 Nonalienation of Benefits 6-3
6.06 Procedures on Receipt of a Domestic Relations Order 6-3
6.07 Payment of Taxes 6-4
6.08 Incompetent Payee 6-5
6.09 Effect of Rehire on Distribution of Benefits 6-5
6.10 Notice, Place and Manner of Payment 6-5
6.11 Source of Benefits 6-5
6.12 Hardship Withdrawals 6-5
ARTICLE VII
PLAN ADMINISTRATION 7-1
7.01 The Administrative Committee 7-1
7.02 Agent For Legal Process 7-3
7.03 Claims Procedures 7-3
7.04 Records 7-4
7.05 Correction of Errors 7-4
7.06 Evidence 7-5
7.07 Bonding 7-5
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7.08 Waiver of Notice 7-5
7.09 Unclaimed Accounts 7-5
7.10 USERRA Compliance. 7-5
ARTICLE VIII
TRUST FUND 8-1
8.01 Composition 8-1
8.02 Compensation, Reimbursement 8-1
8.03 No Diversion 8-1
8.04 Funding Policy and Method 8-2
ARTICLE IX
SPECIAL RULES FOR TOP-HEAVY PLANS 9-1
9.01 Definitions of Key Employee 9-1
9.02 Aggregation of Plans 9-1
9.03 Determination Date 9-2
9.04 Present Value of Accrued Benefits In A Defined Contribution Plan 9-2
9.05 Adjustments to Present Value of Accrued Benefits 9-3
9.06 Top-Heavy Plan and Super Top-Heavy Plan Definitions and Ratios 9-4
9.07 Adjustments to Plan Provisions If Plan Is Top-Heavy 9-4
ARTICLE X
NONDISCRIMINATION REQUIREMENTS 10-1
10.01 Special Definitions 10-1
10.02 Limitations on Elective Deferrals 10-2
10.03 Distribution of Excess Contributions 10-3
10.04 Limitations on Matching Contributions and Employee After-Tax Contributions 10-5
10.05 Distribution of Excess Aggregate Contributions 10-6
10.06 Required Reductions for Multiple Use of Alternative Limitation 10-8
ARTICLE XI
ADOPTION, AMENDMENT, TERMINATION AND MERGER 11-1
11.01 Adoption of Plan by Additional Company 11-1
11.02 Amendment 11-1
11.03 Termination 11-2
11.04 Discontinuance of Contributions 11-2
11.05 Rights Upon Termination, Partial Termination and Discontinuance of Contributions 11-2
11.06 Deferral of Distributions 11-2
11.07 Merger, Consolidation or Transfer of Plan Assets 11-3
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ARTICLE XII
MISCELLANEOUS 12-1
12.01 Responsibility of Insurance Companies 12-1
12.02 Limitation of Fiduciary Responsibility and Liability 12-1
12.03 Numbers and Genders 12-1
12.04 Headings 12-1
12.05 Severability 12-1
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APW LTD. 401(K) PLAN
PREAMBLE
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WHEREAS, Applied Power Inc. has previously established the APW 401(k)
Plan; and
WHEREAS, Applied Power Inc. will spin-off APW Ltd., a Bermuda
corporation (the "Company"); and
WHEREAS, the Company desires to spin-off the retirement plan benefits
of the Company employees and establish a retirement plan for the benefit of its
eligible employees.
NOW, THEREFORE, the plan is hereby established
July 1, 2000 as follows:
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ARTICLE I
DEFINITION OF TERMS
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1.01 "Account" shall mean the records of a Participant's interest in
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the Plan, which records shall be created and maintained for each Participant.
Separate Accounts will be maintained for each Participant for each of the
following types of contributions, and the income, expenses, gains and losses
attributable thereto:
(a) APW Ltd. Core Contributions pursuant to Section 3.01.
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(b) Employee Pre-Tax Contributions pursuant to Section 3.02.
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(c) 401(k) Matching Contributions pursuant to Section 3.03.
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(d) Prior Company Contributions pursuant to Section 3.04.
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(e) Employee After-Tax Contributions pursuant to Section 3.05.
--------------------------------
(f) Rollover Contributions pursuant to Section 3.06.
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1.02 "Affiliated Company" means each corporation which is included as
------------------
a member of a controlled group with the Company, and trades or businesses,
whether or not incorporated, which are under common control by or with the
Company within the meanings of Sections 414(b) and (c) of the Internal Revenue
Code of 1986, or any amendments thereof, except that for purposes of the
limitation or Annual Additions, the term shall also include trades or businesses
on the basis of a more than 50% test rather than an 80% test. Further, the term
shall include any members of the same "affiliated service group" within the
meaning of Code Section 414(m) or deemed as such pursuant to Code Section
414(o).
1.03 "Anniversary Date" means the last day of each Plan Year.
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1.04 "Annual Addition" means with regard to any Participant the sum
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of:
(a) Company contributions to the Plan for the Plan Year; and
(b) forfeitures credited to such Participant's Account for the Plan
Year; and
(c) Participant contributions to the Plan for the Plan Year.
For purposes of this definition only, "compensation" shall mean the
Participant's Eligible Compensation and, unless otherwise required by
regulation, includes bonuses, and other taxable payments, and all other amounts
specified in IRS Regulations Section 1.415-2(d)(1) but excludes deferred
compensation, stock options and other distributions which receive special tax
benefits. In computing an "Annual Addition", all of the Company's defined
contribution plans (as defined in Section 414(i) of the Code) shall be
aggregated.
1.05 "Beneficiary" means any one or more primary or contingent
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beneficiaries designated by the Participant to receive any benefits payable
under this Plan on or after the Participant's death. Each Participant having an
entitlement to benefits under the Plan shall have the right to designate one or
more Beneficiaries or contingent Beneficiaries to whom payment of any account
balances described in this Plan to which such Participant was entitled shall be
paid in the event of the Participant's death, subject to the rights, described
below, of the Participant's spouse. Each such designation shall be evidenced by
a written instrument in a form acceptable to the Committee, signed by the
Participant and filed with the Committee. A
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Participant may designate different Beneficiaries at any time by filing a new
beneficiary designation with the Committee. The last effective designation filed
with the Committee shall supersede all prior designations. No beneficiary
designation filed after the death of a Participant shall be valid. The following
paragraphs shall also be applicable:
(a) If a Participant fails to designate a Beneficiary, or if no designated
Beneficiary survives a Participant, or if a beneficiary designation is
invalid, the following persons in the order named shall be deemed to
be such Beneficiary:
(1) Surviving spouse of the Participant, if any.
(2) If there is no surviving spouse, then the children surviving the
Participant (in equal shares) and the descendants then living of
any deceased children, by right of representation.
(3) If the Participant shall leave neither spouse nor descendants
surviving, then the executors or administrators of the
Participant's estate.
(b) A Participant may designate both primary and contingent Beneficiaries,
as well as to whom benefits shall be distributed in the event of the
death of a Beneficiary.
(c) Any designation of a Beneficiary by a Participant other than the
Participant's spouse, if any, shall not be effective unless the
Participant's spouse consents in writing to such election, such
election designates a Beneficiary which may not be changed without
spousal consent (or the consent of the spouse expressly permits
designation by the Participant without any requirement of further
consent by spouse), and the spouse's consent acknowledges the effect
of such election and is witnessed by a Plan representative or a notary
public. Spousal consent is not required if it is established that
there is no spouse, that the spouse cannot be located, that the prior
consent of the spouse expressly permits the Participant to change a
beneficiary designation without any requirement of further consent by
the spouse, or that consent is not required under such other
circumstances as may be prescribed by applicable regulations. Any
consent by a spouse, or establishment that such consent is not
required, shall be effective only with respect to such spouse.
Spousal consent may be revoked any time prior to the Participant's
death, shall be in the same form as is required for spousal consent,
and shall be effective for all purposes of the Plan.
(d) Whenever rights of a Participant are stated or limited by the Plan,
his Beneficiaries shall be limited thereby.
1.06 "Break in Service" shall mean a Plan Year in which the Employee
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does not complete an aggregate of more than 500 Hours of Service with any of the
Company and any Affiliated Companies. No termination of employment shall be
deemed to occur, and hence no Break in Service shall be deemed commenced, by
reason of the commencement of any maternity or paternity absence, as such
absences are defined in paragraph 202(b)(5) of ERISA, i.e., any period of
absence due to pregnancy, birth or placement of a child with an individual, or
any absence immediately following such birth or placement. Solely for the
purpose of determining whether or not a Break in Service subsequently occurs
under this Plan, up to 501 nonperformance Hours of Service shall be credited
during the continuation of such absence, either in the Plan Year of its
commencement if a One Year Break in Service otherwise would occur in that year,
or, if not, then in the following Plan Year. Such Hours of Service shall be
credited at the same rate as normally would occur but for such absence, or, in
the case of uncertainty, at the rate of eight hours of service per day of
absence. If the Participant does not
1-2
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return to the performance of duties for the Company or for an Affiliated Company
by the first business day of the first Plan Year after such nonperformance hours
are credited, then a termination of employment may be deemed to have occurred
either on that date or on such later date as any authorized leave of absence
given in connection with or during the maternity or paternity absence shall have
ended without return of the Participant to such active duties. Nothing in this
Section shall be understood to establish or alter any Company policy with
respect to maternity or paternity leaves for any purpose other than the
determination of Breaks in Service under this Plan.
1.07 "Code" means the Internal Revenue Code of 1986, as amended from
----
time to time.
1.08 "Committee" means the Administrative Committee described in
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Section 7.01.
1.09 "Company" means APW Ltd. and any successor which shall continue
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the Plan. The term "Company" shall also include any other Affiliated Company
authorized by APW Ltd. to participate in this Plan; provided, however, that for
purposes of the power to amend the Plan or to terminate the Plan in whole or in
part or to make decisions with respect to the selection or direction of the
Trustee or to appoint the Plan Administrator, the term Company shall refer only
to APW Ltd. Any participating Company shall have the right to terminate
participation in the Plan with respect to its Employees only.
1.10 "Company Stock Fund" means the investment fund established under
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the Plan that is invested primarily in Company stock.
1.11 "Disability" means a Termination of Employment of a Participant
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by reason of permanent disability occurring before the Participant is eligible
for Normal Retirement. For all purposes of this Plan, "permanent disability"
means a physical condition resulting from bodily injury, disease or disorder
(whether or not occupational) which renders the Participant incapable of
engaging in or performing the principal duties of the Participant's customary
employment. Whenever there is a dispute as to whether a Participant has
terminated employment by reason of permanent disability, the Committee shall
select a physician to examine the Participant for the purpose of making this
determination. The physician's determination shall be conclusive and binding
upon the Committee and the Participant. Determinations as to whether retirement
is by reason of permanent disability shall be made under rules and policies
uniformly applied to all Participants similarly situated.
1.12 "Eligible Compensation" means the total of all amounts paid to
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an Eligible Employee while a Participant by the Company in a Plan Year which is
reportable currently for federal income tax purposes on Form W-2 subject to the
following paragraphs:
(a) Eligible Compensation shall include amounts which are not includable
in gross income under Section 125 (cafeteria plan contributions), Code
Section 402(e)(3) (salary deferrals), Code Section 402(h) (SEP
contributions), and Code Section 403(b) (tax sheltered annuities).
(b) Eligible Compensation shall not include the following items (even if
includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation, stock options and welfare benefits.
(c) Eligible Compensation shall not exceed $160,000 (subject to cost-of-
living adjustments as provided in Code Section 401(a)(17) and
regulations thereunder). If required by applicable regulations, the
Eligible Compensation of a spouse and
1-3
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descendants (under age 19) of a Participant who is Five Percent Owner
or who is among the ten most highly compensated Highly Compensated
Employees shall be aggregated with the Eligible Compensation of such
Participant for purposes of determining the Eligible Compensation
dollar limit described in this paragraph. Notwithstanding any other
provision of this Plan, the dollar limit set forth in this paragraph
shall apply for purposes of determining whether the Plan complies with
applicable nondiscrimination rules, including the determination of the
Actual Contribution Percentage and Actual Deferral Percentage.
For purposes of applying the nondiscrimination requirements in Article X,
"Eligible Compensation" shall include the items in (b) above which are
reportable for federal income tax purposes on Form W-2.
1.13 "Eligible Employee" is an employee of the Company, but not
-----------------
including (a) temporary employees, (b) employees included in a unit of employees
covered by an agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and one or more employers,
unless the collective bargaining agreement provides for coverage under the
Plan,(c) employees who are nonresident aliens and who receive no earned income
from the Company constituting United States source income, and (d) employees of
an operating unit which is excluded from Plan participation by the Company. The
term Eligible Employee does not include "leased employees" as that term is
defined in Section 414(n) of the Code, even though it is recognized that such
leased employees, if any, must be treated as employees of the Company for
purposes of certain non-discrimination, coverage and other rules under the Code.
1.14 "ERISA" means the Employee Retirement Income Security Act of
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1974, as amended.
1.15 "Fund" shall mean all assets and their earnings which are held
----
in the trust which constitutes the funding vehicle hereunder.
1.16 "Hours of Service" means hours credited to an Employee under the
----------------
Plan. An Employee shall receive credit for one Hour of Service for each hour:
(a) for which he is directly or indirectly compensated by, or
entitled to compensation from, the Company or an Affiliated
Company, for the performance of duties;
(b) for which back pay, irrespective of mitigation of damages, has
been awarded or agreed to by the Company or an Affiliated
Company; and
(c) for which he is paid or entitled to payment by the Company or an
Affiliated Company, but during which no duties are performed due
to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty, or leave of absence; provided,
however, that no credit shall be given for periods for which
payment is made solely to comply with workmen's compensation or
unemployment compensation or disability insurance laws, or for
payments which solely reimburse an Employee for medical or
medically-related expenses incurred by the Employee.
The number of hours for which an Employee is paid or entitled to
payment for reasons described in subparagraph (c) (or the number of hours to
which an award or agreement to pay back pay for a period described under such
subparagraph applies) shall be determined in accordance with Department of Labor
Regulation (S)2530.200b-2; provided, however, that in no
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event shall more than 501 Hours of Service be credited for any single continuous
period during which the Employee performs no duties but for which he is entitled
to credit under subparagraph (c). Hours of Service described in subparagraph (a)
shall be credited to the computation period in which the duties are performed.
The computation period to which Hours of Service described in subparagraph (b)
or (c) are credited shall be determined in accordance with Department of Labor
Regulations (S)2530.200b-2.
In addition to, but not in duplication of the foregoing provisions,
the term "Hour of Service" shall include any period of time during which the
Employee is on a leave of absence authorized by the Company or an Affiliated
Company in accordance with uniform rules applied on a non-discriminatory basis
as required under the state or federal Family and Medical Leave Act or any
period of military service in the armed forces of the United States required to
be credited by law, provided that the Employee returns to employment upon the
expiration of any such leave or within the period during which his reemployment
rights are protected by law. Such periods of time shall be credited at a rate
equal to the annual number of Hours of Service that such individual was accruing
during the calendar year immediately prior to such absence, annualized if the
Employee was employed for less than the whole of such year (but not less than at
an annual rate of 1,000 Hours of Service in any event), without regard to the
501 hour limitation specified above.
1.17 "Participant" means each Eligible Employee who qualifies to
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participate in the Plan.
1.18 "Plan" means the APW Ltd. 401(k) Plan. The Plan is a profit
----
sharing plan, but the Company need not have profits to make any contribution
under the Plan.
1.19 "Plan Administrator" means the Committee or other person,
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persons, or entity as may be designated by the Company.
1.20 "Plan Year" means the twelve-month period on which the records
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of the Plan are maintained, which is currently the period beginning September 1
and ending August 31.
1.21 "Retirement Date" means the date when a Participant attains age
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59 1/2. The term "Normal Retirement" shall refer to a termination of employment
following a Participant's Retirement Date.
1.22 "Trust" means the trust created by the agreement between the
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Company and the Trustee.
1.23 "Trustee" means the person, persons or entity from time to time
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acting as Trustee or Trustees under the Trust.
1.24 "Valuation Date" means the Anniversary Date and such other date
--------------
or dates as the Plan Administrator may deem necessary or desirable.
1.25 "Vesting Service" means an employee's "Vesting Service" which
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shall be determined in accordance with the following paragraphs:
(a) Vesting Service shall accrue at the rate of one (1) year of Vesting
Service for each Plan Year in which an employee completes 1000 or more
Hours of Service. Partial years of Vesting Service shall not be
recognized. Plan Years ending prior to the effective date of the Plan
are included in determining years of Vesting Service.
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(b) The Vesting Service of an employee who has incurred a Break in Service
shall not be recognized if such service is to be disregarded in
accordance with Section 4.5.
(c) As provided in Section 10.01, the Board of Directors of the Company
may, in its discretion, determine that service with a predecessor
employer shall be counted as Vesting Service.
(d) Vesting Services earned under the APW 401(k) Plan shall be counted as
Vesting Service under this Plan.
1-6
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ARTICLE II
PLAN PARTICIPATION
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2.01 Commencement of Participation. An employee of the Company shall
-----------------------------
become a Participant on the first date on which (1) the employee is an Eligible
Employee, and (2) the employee completes one (1) Hour of Service, if such
employee's customary employment is at the rate of at least 1000 Hours of Service
in the following 1-year period. In the event an employee's schedule changes so
the employee is then scheduled to complete at least 1000 Hours of Service in the
following 1-year period, the employee shall become eligible to participate in
the Plan as of the date of such change.
2.02 Transfers to/from Eligible Employee Status. If an employee is
------------------------------------------
transferred to a position in which the employee becomes an Eligible Employee,
the employee shall become a Participant on the date upon which the employee
satisfies the conditions of Section 2.01.
2.03 Rehire After Termination of Employment. If a terminated
--------------------------------------
employee is rehired by the Company after becoming a Participant, or had met the
requirements of Section 2.01 but terminated before commencement of participation
in this Plan, the employee's prior service shall not be disregarded, and the
employee shall commence participation immediately upon rehire. If a terminated
employee is rehired who had not previously satisfied the requirements of Section
2.01 all prior service shall be disregarded and the employee must meet the
requirements of Section 2.01 in order to participate in the Plan.
2.04 No Guaranty of Employment. Participation in the Plan does not
-------------------------
constitute a guaranty or contract of employment with the Company. Such
participation shall in no way interfere with any rights the Company would have
in the absence of such participation to determine the duration of the employee's
employment with the Company.
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ARTICLE III
CONTRIBUTIONS AND ALLOCATIONS
TO PARTICIPANTS' ACCOUNTS
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3.01 APW Ltd. Core Contributions.
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(a) For each Plan Year, the Company shall make a Core Contribution
such that each Participant entitled to share under Section 3.01(b) shall receive
an allocation equal to at least three percent (3%) of such Participant's
Eligible Compensation for the Plan Year. For purposes of the Core Contribution
rules, the following special rules shall apply:
(i) If a cash contribution during a Plan Year is invested in
the Company Stock Fund prior to the last day of the Plan
Year, the contribution shall be valued for allocation
purposes as of the last day of the Plan Year.
(ii) If amounts are allocated as forfeitures, the forfeiture shall
be valued for allocation purposes as of the last day of the
Plan Year.
(iii) If employer securities are contributed for a Plan Year, the
securities shall be valued for allocation purposes as of the
last day of the Plan Year.
(iv) Any Company contributions during a Plan Year which exceed the
minimum allocation required under Section 3.01 and Section
3.03 shall be allocated for the Plan Year as an additional
Core Contribution or an additional matching contribution, as
determined by the Company.
(v) In the event of Plan termination or the Company's insolvency,
any Company contributions made during the Plan Year shall be
allocated to Participants as a Core Contribution or a matching
contribution, as determined by the Company.
(b) An Eligible Employee who was a Participant at any time during the
Plan Year shall be entitled to an allocation from the APW Ltd. Core
Contributions made to the Trust Fund during the Plan Year by the Company if the
employee meets the requirements of either of the following paragraphs:
(i) The Eligible Employee completed 1000 Hours of Service during
the Plan Year and was employed by the Company on the last day
of the Plan Year; or
(ii) The Eligible Employee completed a pro rata portion of 1000
Hours of Service during the Plan Year in which the employee
had a termination of employment prior to the last day of such
Plan Year by reason of Normal Retirement or death.
(c) All APW Ltd. Core Contributions shall automatically be invested in
the Company Stock Fund, subject to the limited right of diversification
described under Section 5.02.
3.02 Employee Pre-Tax Contributions.
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Each Participant (other than Everest employees) may elect to execute a
deferral agreement agreeing to defer a specified percentage of his Eligible
Compensation, as designated on his deferral election form. Deferral elections
may be as to any whole percentage of Eligible Compensation from two percent (2%)
to nineteen percent (19%) for non-highly compensated employees and from two
percent (2%) to eight percent (8%) for highly compensated employees.
Notwithstanding the upper limits on such elections, all elective deferrals made
by the Company shall be required to be tax deductible by the Company in the year
in which made. Accordingly, the Committee shall take into account any
contributions made to all profit sharing plans (and other qualified plans)
sponsored by the Company for the same group of employees and periodically advise
Participants as to the effective upper limits on contribution elections. The
deferral limits described above may be adjusted by the Committee, so long as all
similarly situated employees are provided with a nondiscriminatory opportunity
to make proportionately the same elective deferrals. Deferral elections shall
be on such forms and according to such procedures as the Committee may from time
to time determine. Notwithstanding any other provision of the Plan, a
Participant's elective deferrals for any calendar year, when combined with
amounts deferred under other plans of arrangements described in Section 401(k),
408(k) or 403(b) of the Internal Revenue Code shall not exceed the $9,500 limit
(subject to annual adjustment as provided in the Code and regulations
thereunder). The Company may modify any deferral agreement without consent of
the Participant, if the Committee determines such modification is necessary to
comply with anti-discrimination requirements.
3.03 401(k) Matching Contributions.
-----------------------------
(a) The Company intends to make a contribution for each Plan Year
equal to a certain percentage of Eligible Compensation contributed as elective
deferrals by each Participant who is entitled to matching contributions pursuant
to Section 3.03(b) below. Such contributions are called matching contributions
for purposes of this Section. The Board of Directors shall determine in advance
whether to make such matching contributions and shall determine the percentage
of Eligible Compensation, contributed as elective deferrals, that is to be
matched. The 401(k) Matching Contributions shall be 100% of the first $300 of
elective deferrals for each Participant, plus 25% of the elective deferrals for
each Participant between $300 and 6% of the Participant's Eligible Compensation.
Additional matching contributions may be made as Company contributions as the
Board of Directors shall determine. For purposes of the matching contribution
rules, the following special rules shall apply:
(i) If a cash contribution during a Plan Year is invested in the
Company Stock Fund prior to the last day of the Plan Year,
the contribution shall be valued for allocation purposes as
of the last day of the Plan Year.
(ii) If amounts are allocated as forfeitures, the forfeiture shall be
valued for allocation purposes as of the last day of the Plan
Year.
(iii) If employer securities are contributed for a Plan Year, the
securities shall be valued for allocation purposes as of the last
day of the Plan Year.
(iv) Any Company contributions during a Plan Year which exceed
the minimum allocation required under Section 3.01 and
Section 3.03 shall be allocated for the Plan Year as an
additional Core Contribution or an additional matching
contribution, as determined by the Company.
(v) In the event of Plan termination or the Company's
insolvency, any Company contributions made during the Plan
Year shall be allocated to Participants as a Core
Contribution or a matching
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contribution, as determined by the Company.
(b) The 401(k) Matching Contributions to the Trust Fund shall be
allocated on the basis of Employee Pre-Tax Contributions to Participants who are
actively employed on the last day of the Plan Year or who terminated employment
prior to the last day of the Plan Year by reason of Normal Retirement,
Disability or death.
(c) In the event the amount of 401(k) Matching Contributions and
forfeitures exceeds the amount to be allocated to Participants, such excess will
be allocated in the following Plan Year.
(d) All 401(k) Matching Contributions shall automatically be invested
in the Company Stock Fund, subject to the limited right of diversification under
Section 5.02.
3.04 Prior Company Contributions.
---------------------------
A Participant's Prior Company Contributions Account shall consist of
the employer contribution account from any other plan which is merged into the
Plan.
3.05 Employee After-Tax Contributions.
--------------------------------
A Participant may, from time to time, voluntarily elect to make
contributions to the Trust Fund. Voluntary employee contributions are subject
to the following paragraphs:
(a) Unless otherwise determined by the Committee, such election may
be as to any whole percentage of Eligible Compensation from one percent (1%) to
five percent (5%). Further, the combined pre-tax contribution percentage and
after-tax contribution percentage may not exceed nineteen percent (19%).
(b) An election to make contributions or to revoke such election
shall be in writing, signed by the employee, and on such form as the Committee
may prescribe. The Company may establish a payroll deduction system or other
procedures to assist employees in making voluntary contributions, and the
Committee may, from time to time, adopt policies or rules governing the manner
in which such contributions may be made so that the Plan may be conveniently
administered. An election to make contributions under a payroll deduction system
shall be effective until revoked. Promptly after their receipt, the Company
shall transfer employee contributions made by its employees to the Trustee.
(c) Voluntary employee contributions shall be credited to an
"Employee After Tax Contribution Account" in the name of the employee making
such contributions as of the date of their receipt by the Trustee. The amount
thereof and the net earnings attributable thereto shall be separately reflected
in such account.
(d) At any time, but not more frequently than twice annually, an
employee may request a withdrawal from his Employee After Tax Contribution
Account of an amount equal to all or any specified portion of such account. A
withdrawal shall be charged against the Employee After Tax Contribution Account
of the employee making the same on the date of such withdrawal. A request to
withdraw must be made in accordance with procedures established by the
Committee.
(e) The balance of an employee's Employee After Tax Contribution
Account shall be nonforfeitable for all purposes of the Plan. Upon termination
of employment, the balance of an employee's Employee After Tax Contribution
Account which is not then withdrawn pursuant to the preceding paragraph shall be
distributed pursuant to the provisions of the Plan.
3-3
<PAGE>
(f) Notwithstanding the foregoing paragraphs, if the Plan, on May
5, 1986, permitted withdrawals of employee contributions prior to a Termination
of Employment, the general requirement that withdrawals include proportionate
amounts of employee contributions and income attributable thereto, as provided
in Section 72(e)(2)(8) of the Internal Revenue Code, shall not apply to amounts
distributed before termination of employment that do not exceed the total amount
of employee contributions held by the Plan for the employee on December 31,
1986.
3.06 Rollover Contributions.
----------------------
Notwithstanding any provision to the contrary herein, the Plan may
accept any amounts by any Participant which are intended to be rollover
contributions by the Participant under the Code. Such rollover contribution
shall be held in a segregated rollover account for such Participant and shall
not be subject to forfeiture. Such rollover account may be invested by the
Trustee as part of the general assets of the Trust, and shall share
proportionately in Trust earnings, gains or losses, as otherwise provided
herein. At retirement or other termination of the contributing Participant, the
rollover account shall be distributed in addition to any amount otherwise
payable based upon such Participant's vested Account balance. On death of such
Participant his entire rollover account shall be payable to his beneficiary in
the same manner as any other benefits payable on his death.
3.07 Limitations on Annual Additions.
-------------------------------
(a) The Annual Addition to a Participant's Account under this Plan
shall not exceed the lesser of $30,000 (or, if greater, one-fourth of the
defined benefit dollar limitations set forth in Code Section 415(b)(1) as in
effect for the applicable Plan Year) or 25% of the Participant's "Compensation"
(as defined in Section 1.04 hereof) for the applicable Plan Year.
(b) The dollar amount under the foregoing limits shall
automatically adjust when permissible in accordance with regulations promulgated
by the Secretary of the Treasury.
(c) If any Participant hereunder is also a participant under any
defined benefit plan maintained by the Company or an Affiliated Company for any
year, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for any such year shall not exceed 1.0. As used in
the preceding sentence, "defined benefit plan fraction" shall mean a fraction
(i) the numerator of which is the projected annual benefit of the participant
(the annual benefit to which such participant would be entitled under the terms
of the defined benefit plan on the assumptions that he continues employment
until his normal retirement age as determined under the terms of such defined
benefit plan, that his compensation continues at the same rate as in effect in
the Plan Year under consideration until the date of his normal retirement age
and that all other relevant factors used to determine benefits under such
defined benefit plan remain constant as of the current Plan Year for all future
Plan Years) under all defined benefit plans maintained by the Company,
determined as of the close of the Plan Year, and (ii) the denominator of which
is the lesser of (I) the product of 1.0, multiplied by the dollar limitation in
effect under Internal Revenue Code subsection 415(b)(1)(A) for the calendar year
in which the Plan Year ends, or (II) the product of 1.4, multiplied by 100
percent of the Participant's average compensation for his high three years;
"defined contribution plan fraction" for any Plan Year, shall mean a fraction
(i) the numerator of which is the sum of the Annual Additions to the
Participant's account under all defined contribution plans maintained by the
Company in such Plan Year, and (ii) the denominator of which is the sum of the
lesser of the following amounts determined for the Plan Year and for each prior
year of service with the employer: (I) the product of 1.0, multiplied by the
dollar limitation in effect under Internal Revenue Code subsection 415(c)(1)(A),
or (II) the product of 1.4, multiplied by 25 percent of the Participant's
compensation for such year.
3-4
<PAGE>
(d) Should any allocation under the Plan result in an amount in excess
of the Annual Addition limitations set forth herein, the Plan Administrator
shall correct such excess in this Plan and to the extent necessary to eliminate
such excess, refund or refuse to accept all or part of any salary deferral
contributions (and earnings) made to the Plan by a Participant who would
otherwise exceed the limitations, and/or reallocate any excess Company
contributions made pursuant to Sections 3.01, 3.02, 3.04 or 3.05 excluding any
Participant whose allocation would otherwise exceed the limitations set forth
herein. Any excess Company contribution which cannot be allocated to Participant
Accounts as provided above, shall be held in a suspense account and allocated in
accordance with Section 3.01, before any additional Company contributions, in
the next succeeding Plan Year and each succeeding Plan Year until fully
allocated.
3-5
<PAGE>
ARTICLE IV
VESTING
-------
4.01 Full Vesting Dates.
------------------
A Participant shall at all times have a fully vested and
nonforfeitable interest in his Employee Pre-Tax Contributions Account, his
Employee After-Tax Contributions Account and his Rollover Account. A
Participant's interest in his APW Ltd. Core Contribution Account, his 401(k)
Matching Contributions Account and his Prior Company Contribution Account shall
become fully vested in him and nonforfeitable at the earliest of the following
dates:
(a) The date the Participant shall have completed at least such Years
of Vesting Service as are required for 100% vesting under Section
4.02 below.
(b) The date of the Participant's death while in the employ of the
Company or of an Affiliated Company.
(c) The date of the Participant's Disability while in the employ of
the Company or of an Affiliated Company.
(d) The Participant's attainment of his Retirement Date while in the
employ of the Company or an Affiliated Company.
(e) The date of termination of the Plan (or partial termination as to
Participants affected thereby) or the date of complete
discontinuance of contributions by the Company at a time when the
Participant is employed by the Company or by an Affiliated
Company.
(f) The date the Participant ceases to be employed by the Company or
any Affiliated Company as a result of the sale of an operating
unit (e.g., a subsidiary or division).
4.02 Vesting Schedule.
----------------
Prior to the date that the Participant's interest in his APW Ltd. Core
Contribution Account and his 401(k) Matching Contributions Account becomes fully
vested in accordance with Section 4.01 of this Article, his current vested
interest in such Accounts shall be determined in accordance with the following:
Portion of Participant's
Years of Vesting Account Vested in
Service Participant
---------------- ------------------------
Less than 3 0%
At least 3 but less than 5 50%
5 years or more 100%
Notwithstanding the foregoing, a Participant with at least three (3) years of
Vesting Service as of January 1, 1998 shall be fully vested in his 401(k)
Matching Contributions Account.
4-1
<PAGE>
A Participant with an Hour of Service in the Plan shall have a fully
vested and nonforfeitable interest in his Prior Company Contributions Account. A
Participant who does not have an Hour of Service in the Plan shall have his
vested interest in his Prior Company Contributions Account determined in
accordance with the vesting schedule of the plan that was merged into the Plan.
4.03 Election of Former Vesting Schedule.
-----------------------------------
In the event the vesting schedule of this Plan is hereafter directly
or indirectly amended or the vesting schedule of any preceding Plan has been
amended by adoption of this amendment and restatement, no Participant or former
Participant shall be deprived thereby of any previously vested interest, and any
Participant who has completed at least three (3) years of Vesting Schedule
Service, may elect to have his vested interest in his Company Contribution
Account determined without regard to such amendment by notifying the Plan
Administrator in writing during the election period as hereafter defined. The
election period shall begin on the date such amendment is adopted and shall end
no earlier than the latest of the following dates:
(a) the date which is 60 days after the date the amendment is
adopted;
(b) the date which is 60 days after the day the plan amendment
becomes effective; or
(c) the date which is 60 days after the day the Participant is issued
written notice of the amendment by the Company or Plan
Administrator. Such election shall be available only to an
individual who is a Participant at the time such election is made
and such election shall be irrevocable.
4.04 Forfeitures.
-----------
As to any Participant who terminates employment with the Company and
all Affiliated Companies prior to becoming fully vested in his APW Ltd. Core
Contributions Account and 401(k) Matching Contributions Account, the unvested
portion of such Accounts shall be declared a forfeiture as of the end of the
Plan Year in which such termination of employment occurs.
(a) If the Participant is rehired after incurring five (5) or more
consecutive Breaks in Service, the Participant has no rights to
restoration of the Participant's prior nonvested balance.
(b) If the Participant is rehired before incurring five (5) or more
consecutive Breaks in Service, then the amount of his prior
nonvested balance that was previously forfeited shall be restored
to the Participant's Accounts out of, in the following order of
priority: forfeitures, earnings, or Company contributions to the
Plan.
(c) The APW Ltd. Core Contributions which are forfeited under this
section shall first be used to restore any previously forfeited
Accounts as described in (b) above and any excess shall be used
to reduce the APW Ltd. Core Contribution pursuant to Section
3.01. The 401(k) Matching Contributions which are forfeited under
this Section shall first be used to restore any previously
forfeited Accounts as described in (b) above and any excess shall
be used to reduce the 401(k) Matching Contribution under Section
3.03.
4.05 Vesting Credit Following Termination.
------------------------------------
4-2
<PAGE>
If a Participant incurs a Break in Service after termination of
employment before he has acquired any vested interest in any portion of his APW
Ltd. Core Contribution Account, and if his aggregate number of consecutive one
year Breaks in Service (including those within such Break in Service) then or
thereafter equals or exceeds his number of years of Vesting Service prior to
such Break in Service, then all prior Vesting Service shall be forfeited as it
otherwise would be used to measure his vested interest in his new Account
established subsequent to such Break in Service.
If a Participant incurs a Break in Service after termination of
employment after he has acquired a vested interest in any portion of his APW
Ltd. Core Contribution Account, then (regardless of his subsequent number of
consecutive One Year Breaks in Service) all prior Vesting Service shall be
aggregated with his subsequent Vesting Service to measure his vested interest in
his new Account established subsequent to such Break in Service.
4-3
<PAGE>
ARTICLE V
INVESTMENT ELECTIONS AND
------------------------
VALUATION OF ACCOUNTS
---------------------
5.01 Investment Elections. Participants may direct the investment of
--------------------
any amounts in their Employee Pre-Tax Contributions Account, Prior Company
Contributions Account, After Tax Contributions Account and Rollover
Contributions Account. Except as provided in Section 5.02, below, a
Participant=s APW Ltd. Core Contributions Account and 401(k) Matching
Contributions Account shall be invested in the Company Stock Fund. For those
Accounts which are eligible for investment direction, separate investment funds
shall be made available for investment by Participants as may be determined
according to the terms of the Plan and Trust Agreement. Unless otherwise
determined by the Committee, the following paragraphs shall apply to investment
instructions:
(a) An investment election shall be in accordance with such procedures as
the Committee shall prescribe. Each Participant shall, upon enrollment
in the Plan, make an investment election directing the investment of
the Participant's account in the Plan in the investment funds then
currently available. Such investment election shall be as to any
integral multiple of ten percent (10%) of the Participant's accounts,
including all contributions and credits to such accounts. Each
Participant may, thereafter, change such investment election in
accordance with Committee rules and procedures. The right to make
investment elections shall extend to the Beneficiary following the
death of a Participant pending distribution of account balances. The
Committee may, but is not required to, exercise investment election
authority over any account which it deems not to be properly subject
to the control of a former Participant or Beneficiary or where joint
authority (such as between co-beneficiaries) to make investment
elections would otherwise exist.
(b) A Participant making investment elections and changes in accordance
with this Section thereby assumes full responsibility for such
exercise of control over assets in the Participant's accounts. No
person who is otherwise a fiduciary shall be liable for any loss, or
by reason of any breach, which may result from such person's exercise
of such control.
5.02 Investment Diversification of APW Ltd. Core and 401(k) Matching
---------------------------------------------------------------
Contributions. APW Ltd. Core Contributions and 401(k) Matching Contributions
-------------
shall automatically be invested in the Company Stock Fund. However, each
Participant who attains age 50 and has five years of Vesting Service shall have
his or her account equally divided into a "Restricted Account" and an
"Unrestricted Account" as soon as practicable following the close of the Plan
Year in which such age and service conditions are satisfied. The Restricted
Account will remain invested in the Company Stock Fund. The Unrestricted Account
shall be subject to investment direction as described in Section 5.01, above.
APW Ltd. Core Contributions and 401(k) Matching Contributions allocated to a
Participant who has attained age 50 and has five years of Vesting Service shall
be allocated 50% to the Restricted Account and 50% to the Unrestricted Account.
5.03 Account Adjustments to Reflect Net Worth of the Trust Fund.
----------------------------------------------------------
As of each Valuation Date, the accounts maintained in each separate investment
fund within the Trust Fund (including those accounts not yet fully distributed)
shall be adjusted in accordance with procedures established by the Committee, so
that such adjusted balances will equal the net worth of that investment fund as
of that date, using fair market values as determined by the Trustee.
5-1
<PAGE>
5.04 Net Worth. The net worth of a separate investment fund within
---------
the Trust Fund for any period shall be determined based on the Trustee's
judgment of the fair market value of each of the assets of the investment fund
using generally accepted accounting principles of trust accounting. Any
determination made by the Trustee and the Committee with respect to the value of
accounts shall be conclusive and binding upon all persons having an interest
under the Plan.
5.05 Certain Segregated Accounts. Account balances which are part of
---------------------------
the Trust Fund but which are segregated pursuant to the directions of the
Committee shall be valued according to the terms of the investment medium
funding such account, using generally accepted accounting principles of trust
accounting.
5.06 Responsibility to Maintain Account Balances. The responsibility
-------------------------------------------
to maintain account balances pursuant to the provisions of this Section 5 shall
be discharged by the Committee. The Committee shall keep separate accounts for
each Participant's accrued benefits under the Plan, showing the manner in which
it has determined the entries made to each such account. Following the close of
each Plan Year, the Committee shall make arrangements for the delivery to each
Participant of a statement showing, as of the close of the Plan Year, each
Participant's credited balance to each of his accounts and the extent to which
such balances are vested.
5.07 Participant Loans. The Committee, in its discretion, may
-----------------
determine to make loans available to Participants. In the event of such
determination, the following rules and procedures shall apply unless otherwise
determined by the Committee:
(a) Each Participant requesting a loan must submit a written
application to the Human Resources/Benefits Office supported by
such evidence as the Committee may request.
(b) The Committee's decision to grant or deny any loan shall be based
upon an evaluation of Internal Revenue Code requirements, Plan
restrictions and such other factors as the Committee shall choose
to apply on a nondiscriminatory basis.
(c) Two different types of loans are permitted under the Plan, a
regular loan and a primary residence loan. A regular loan can be
used for any purpose. The primary residence loan must be for the
purchase of a home which is used as the Participant's primary
residence. A Participant may not have more than one loan of each
type at the same time.
(d) The maximum loan amount for any Participant shall be equal to 50%
of the total of his or her Employee Pre-Tax Contributions, 401(k)
Matching Contributions, Prior Company Contributions, and Employee
After-Tax Contributions and Rollover Contributions. The minimum
loan amount is $1,000 and the total of all Plan loans of the
Participant shall not exceed $50,000.
(e) The interest rate charged on any Plan loan shall be the prime
rate plus 1% and the Participant shall be responsible for any
loan processing or maintenance fees. Fees will be deducted from
the Participant's account.
(f) The term of a regular loan may range from one to five years. The
term of a primary residence loan may range from one to twenty
years.
5-2
<PAGE>
(g) All loans shall be considered an investment solely of the account
of the Participant receiving the loan.
(h) Plan loans shall be secured by the Participant's interest in the
Plan, to the maximum extent permitted by law.
(i) Loans shall be repaid through payroll deduction.
(j) A Participant who fails to make loan payments on a timely basis
shall be in default. In the event of default, the Committee
shall have the right to declare any unpaid balance due and
payable. Further, to the extent permitted by law, the Committee
shall have the right to apply the Participant's interest in the
Plan against the unpaid amount.
5-3
<PAGE>
ARTICLE VI
DISTRIBUTIONS
-------------
6.01 Time of Distribution.
--------------------
(a) Retirement. Upon termination of employment on or after his
----------
Retirement Date or a Disability, a Participant shall be entitled to have the
full value of his Account distributed to him as soon thereafter as
administratively possible but in no event later than 60 days after the close of
the Plan Year in which he terminates employment.
(b) Other Termination. Upon termination of employment prior to his
-----------------
Retirement Date, a Participant shall be entitled to have the vested interest in
his Account distributed to him as soon as practicable after the Participant's
termination of employment; provided, however, that the written consent of the
Participant to the distribution shall be required if his Account exceeds $5,000
(or such other sum as may be permitted from time to time by applicable
governmental regulations).
(c) Death. If a Participant or former Participant dies with any
-----
Account in the Plan, his Beneficiary shall be entitled to the full value
thereof.
6.02 When Distribution of Accounts Shall Commence.
--------------------------------------------
(a) Unless the Participant elects otherwise as permitted by the Plan, the
distribution of benefits to a Participant under the Plan shall
commence as soon as administratively practicable but not later than
sixty (60) days after the Plan Year in which occurs the later of the
-----
following events:
(1) The Participant's attainment of Normal Retirement Age; or
(2) The Participant's termination of employment.
(b) A Participant may, in accordance with such procedures as the Committee
prescribes, elect (and thereby consent) to have the distribution of
the Participant's Accounts commence as soon as administratively
practicable following the Valuation Date coincident with or following
the first to occur of the Participant's Termination of Employment or
attainment of Normal Retirement Age. If the amount of a Participant's
accounts is less than $5,000 (or such larger amount as may be
permitted by the Code) as of the date distribution is to commence, the
Committee may (without the consent of the Participant) direct that the
Participant's Accounts be distributed in a lump sum as soon as
administratively practicable following the Participant's termination
of employment.
(c) A Participant who remains employed may elect, in accordance with such
procedures as the Committee prescribes, to receive a distribution of
all or part of the Participant's account balance at any time after the
attainment of age fifty-nine and one-half (59-1/2).
(d) Payment of a Participant's accounts distributable due to death shall
be made in a lump sum as soon as administratively practicable after
the Valuation Date following the Participant's date of death or, if
elected by the Participant's
6-1
<PAGE>
Beneficiary, in accordance with the applicable distribution period
described in Section 6.03.
(e) Lump sum payment of portions of a Participant's Vested Balance
authorized to be paid pursuant to a Qualified Domestic Relations Order
is specifically authorized hereunder, without regard to the age or
employment status of the Participant.
6.03 How Accounts Are To Be Distributed. Accounts distributed under
----------------------------------
the Plan shall be paid in accordance with the following paragraphs:
(a) Rules If Participant is Living. A Participant may request any
------------------------------
optional form of payment described in paragraph (c), below.
(b) Rules If Participant Is Dead. Upon the death of a married
----------------------------
Participant, the deceased Participant's accounts shall be payable to
the surviving spouse. The spouse shall have the right to select an
optional form of distribution, described in paragraph (c), below. The
accounts of a Participant who has no surviving spouse, who has
established that a spouse cannot be located, or who has made a valid
election, with spousal consent, to have the account balances upon the
Participant's death distributed in full to the Participant's
Beneficiary, shall be distributed to the Participant's Beneficiary.
The Beneficiary shall have the right to request any method of payment
described in paragraph (c), below. Such request shall be subject to
all the provisions of this Plan.
(c) Optional Forms of Distribution. Optional forms of distribution under
------------------------------
the Plan include:
(1) A lump sum.
(2) Installment payments satisfying the minimum distribution
requirements of the Plan.
(3) A direct transfer of any eligible rollover distribution to an
eligible retirement plan accepting such transfer, as required by
Section 401(a)(31) of the Code.
(d) Form of Distribution. All distributions from the Plan shall be in
--------------------
cash, except that a Participant may elect to receive a distribution from the
Company Stock Fund in Company Stock.
(e) Protected Forms of Benefit for Merged Plans. In accordance with
-------------------------------------------
Section 411(d)(6) of the Code, no plan amendment shall eliminate or be treated
as eliminating any optional form of benefit that was available under a plan that
was merged into the Plan. In accordance with these rules, the following
Participants who have had an account transferred from another plan into the Plan
shall have the following additional distribution options. [Note: Some of these
may be eliminated.]
(i) Necon. Any Participant who had an account transferred from the
-----
New England Controls, Inc. Retirement Plan (the "Necon Plan") may also
elect to receive a distribution in the form of a joint and 50%
survivor annuity.
(ii) Versa. Any Participant who had an account transferred from the
-----
Versa Technologies, Inc. 401(k) Retirement Savings Plan (the
6-2
<PAGE>
"Versa Plan") may also elect to receive a
distribution in the form of a single life annuity
or a joint and 50%, 75% or 100% survivor annuity.
(iii) Zero. Any Participant who had an account
----
transferred from the Zero Corporation Retirement
Savings Plan (the "Zero Plan") may also elect to
receive a distribution in any standard form
permissible under Section 401(a)(9) of the Code
and applicable Internal Revenue Service
Regulations, including but not limited to a single
lump sum distribution, a single life annuity or a
contingent annuity or period certain annuity with
designated Beneficiaries other than the
Participant's spouse, or in the form of any
permissible combination of permissible forms;
provided that a married Participant may also elect
to receive the portion of his or her Account
attributable to contributions under the Zero Plan
for plan years commencing prior to January 1, 1995
in the form of a joint and 50% survivor annuity.
A married Plan Participant who has the right to elect to receive a joint and 50%
survivor annuity (i. e., a Participant with an account transferred from the
Necon Plan or Versa Plan or a Participant with a pre-1995 account transferred
from the Zero Plan) shall automatically receive a distribution in that form
unless the Participant's spouse consents to an optional form of distribution in
a writing signed by the spouse and witnessed by a plan representative or notary
public. The Plan Administrator shall cause to be furnished to each married
participant a written explanation, in non-technical terms of the availability of
the joint and 50% survivor annuity, as specifically applicable to the
participant and spouse and of the fact that such participant may elect an
optional form of benefit. The written explanation shall be furnished to such
participant during a reasonable period (generally 90 days) before the
commencement date of any benefits, consistent with applicable governmental
regulations.
6.04 Required Distribution Rules. All distributions from the Plan
---------------------------
shall be made in accordance with the required distribution rules of Section
401(a)(9) of the Internal Revenue Code and the rules provided in the applicable
Treasury regulations. The provisions of Section 401(a)(9) of the Internal
Revenue Code override any distribution options in the Plan inconsistent with
such provisions.
6.05 Nonalienation of Benefits. The account balances payable under
-------------------------
this Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or
levy of any kind, either voluntary or involuntary, prior to actually being
received by the person entitled to the benefit under the terms of the Plan; and
any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to benefits payable hereunder, shall be
void. The Trust Fund shall not in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder. The creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant
6-3
<PAGE>
pursuant to a Qualified Domestic Relations Order shall not be treated as an
assignment or alienation under this Section.
6.06 Procedures on Receipt of a Domestic Relations Order. If the
---------------------------------------------------
Plan receives a domestic relations order which creates, assigns, or recognizes
any right to a benefit payable with respect to a Participant, the following
procedures shall be followed:
(a) The Committee shall determine whether such order is a Qualified
Domestic Relations Order in accordance with written uniform rules that
comply with Section 206(d)(3)(G)(ii) of ERISA;
(b) The Committee shall notify the Participant and each alternate payee
under the order as to the receipt of the order, the procedures for
determining whether the order is qualified and the final determination
within a reasonable period of time, or such period as may be specified
in applicable regulations;
(c) During the period of determining whether the order is qualified, the
Committee shall separately account for any amounts that would be
payable to the alternate payee during such period if the order had
been determined to be a Qualified Domestic Relations Order. Such
separate accounting is not required for amounts that would not
otherwise be paid during the determination period.
If within the eighteen (18) month period beginning with the date on which the
first payment would be required to be made under the order, the order is
determined to be a Qualified Domestic Relations Order, the amounts specified in
the order as payable shall be paid to the alternate payee in the method
specified in such order, or if none, in the method selected by the alternate
payee provided such method has the same effect on the Plan as a lump sum payment
of such amount. If the payment method specified in such order does not have the
effect on the Plan of a lump sum payment, then such amount shall not be
distributable until all of the necessary conditions for payment of Section 7
have been satisfied. If the order is not determined to be qualified, or the
determination is not resolved within such eighteen (18) month period, the
Committee shall pay such benefits that have been separately accounted for (plus
interest) to the Participant, or Beneficiary, if any, who would otherwise have
received such benefits if the order had not been issued. The Plan shall not be
treated as failing to meet the requirements of subsection (a) or (k) of Section
401 of the Internal Revenue Code which prohibit payment of benefits before
Termination of Employment solely by reason of payments to an alternate payee
pursuant to a Qualified Domestic Relations Order.
6.07 Payment of Taxes. The Committee may direct the Trustee to
----------------
deduct, withhold, and transmit to the proper tax authorities any tax which may
be permitted or required to be deducted and withheld, and the balance of the
account in such case shall be correspondingly reduced. In addition, the
Committee, as a condition of directing the payment of any account balance, may
requite the Participant or his Beneficiary, as the case may be, to furnish it
with proof of payment, or such reasonable indemnity therefor as the Committee
may specify, of all income, inheritance, estate, transfer, legacy and/or
succession taxes, and all other taxes of any different type or kind that may be
imposed under or by virtue of any law upon the payment, transfer, descent or
distribution of said benefit and for the payment of which either the Company,
the Trust Fund or the Committee, in the judgment of the Committee, may be
directly or indirectly liable.
6.08 Incompetent Payee. If any Participant or Beneficiary entitled
-----------------
to receive benefits hereunder is, in the judgment of the Committee based upon a
physician's examination, unable to take care of his affairs because of mental
condition, illness, or accident, any payment due such person may (unless prior
claim therefor shall have been made by a qualified guardian or other legal
representative) be paid for the benefit of such Participant to his spouse,
child,
6-4
<PAGE>
parent, brother or sister, or other person who in the opinion of the Committee
has incurred expense for, or is maintaining, or has custody of such Participant.
The Committee shall not be required to see to the proper application of any such
payment made to any person pursuant to the provisions of this Section, and any
such payment so made shall be a complete discharge of the liability of the Trust
Fund, the Committee and the Company therefor.
6.09 Effect of Rehire on Distribution of Benefits. No distributions
--------------------------------------------
shall be made to any Participant from his Account while the Participant
maintains an employment relationship with the Company, subject to Plan
provisions that specifically authorize such distributions to employed persons
and to Committee rules and regulations defining what shall constitute an
employment relationship. Pursuant to this provision, distributions which have
commenced from the Account of an employee by reason of his termination of
employment shall be suspended if such employee is later rehired by the Company.
6.10 Notice, Place and Manner of Payment. Any payments due hereunder
-----------------------------------
shall be made on demand at such office as the Trustee may maintain; provided,
however, that any person from time to time entitled to such payments may by
notice in writing to the Trustee specify a Post Office address to which such
payment shall be remitted.
6.11 Source of Benefits. All benefits to which persons shall become
------------------
entitled hereunder shall be provided only out of the Trust Fund. No benefits are
provided under the Plan except those expressly described herein.
6.12 Hardship Withdrawals. Hardship withdrawal may be authorized by
--------------------
the Committee in the event of the financial hardship of the Participant of a
portion of the Participant's Employee Pre-Tax Contributions Account, Prior
Company Contributions Account, 401(k) Matching Contributions Account and
Rollover Contributions Account (but excluding earnings allocated to such
accounts after December 31, 1998). Hardship withdrawal shall be subject to the
following rules:
(a) A distribution shall be deemed to be on account of financial hardship
only if the distribution is made on account of an immediate and heavy
financial need of the Participant and is necessary to satisfy such
financial need, in accordance with the following paragraphs:
(b) The following expenses are the only categories of financial hardship
which shall be deemed immediate and heavy financial needs:
(1) Medical expenses, described in Section 213(d) of the Internal
Revenue Code incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in
Section 152 of the Internal Revenue Code);
(2) Purchase (excluding mortgage payments) of a principal residence
for the Participant;
(3) Payment of tuition for the next semester or quarter of post-
secondary education for the Participant, the Participant's
spouse, children, or dependents;
(4) The need to prevent the eviction of the Participant from the
Participant's residence or foreclosure on the mortgage of the
Participant's principal residence; or
6-5
<PAGE>
(5) Such other financial needs which the Commissioner of Internal
Revenue deems to be immediate and heavy financial needs through
the publication of revenue rulings, notices, and other documents
of general applicability rather than of a particular application
to a certain individual.
(c) A Participant shall provide evidence of the need for a hardship
distribution by written certification of the Participant together with
photostatic copies of material establishing the nature and amount of
such hardship. This evidence may include, but is not limited to,
invoices for health care services, accepted offers to purchase a
principal residence, invoices from post-secondary educational
institutions, eviction notices, or demand notices for housing
expenses.
(d) The Participant shall make a written representation to the Committee
that the financial need cannot be relieved:
(1) Through reimbursement or compensation by insurance or otherwise;
(2) By reasonable liquidation of the Participant's assets, to the
extent such liquidation would not itself cause an immediate and
heavy financial need;
(3) By cessation of elective contributions or employee contributions
under the Plan; or
(4) By other distributions or nontaxable (at the time of the loan)
loans from plans maintained by the Company or by any other
employer, or by borrowing from commercial sources on reasonable
commercial terms.
For purposes of this Section 6.12(d), the Participant's resources
shall be deemed to include those assets of the Participant's spouse
and minor children that are reasonably available to the Participant.
Thus, for example, property owned by the Participant and the
Participant's spouse, whether as community property, joint tenants,
tenants by the entirety, or tenants in common, will be deemed a
resource of the Participant. Property held for the Participant's
child, however, under an irrevocable trust or under the Uniform Gifts
to Minors Act will not be treated as a resource of the Participant.
(e) The amount of the distribution shall be deemed necessary to meet such
needs provided (i) the distribution is not in excess of the amount of
the immediate and heavy financial need; (ii) the Participant has
obtained all distributions, other than hardship distributions, and all
nontaxable loans currently available (if any) under all plans
maintained by the Company; and (iii) the Participant has satisfied any
other requirements which the Commissioner of Internal Revenue
publishes in revenue rulings, notices, and other documents of general
applicability rather than of a particular application to a certain
individual.
(f) During the twelve (12) month period following the Participant's
receipt of the hardship distribution, the Participant may not make any
elective deferrals or employee contributions to this Plan or any other
tax-qualified or nonqualified deferred compensation plans of the
Company, if any. The preceding sentence does not apply to any health
or welfare benefit plan or to the mandatory employee contribution
portion of a defined benefit plan of the Company, if any.
6-6
<PAGE>
A Participant may resume elective deferrals and employee contributions
as of the first date following the end of such twelve (12) month
period.
(g) During the taxable year following the taxable year of the hardship
distribution, the Participant may not make a contribution to the
Participant's Employee Pre-Tax Contributions Account in excess of the
limitation described in Code Section 4.02(g) minus the amount which
the Participant contributed to such Employee Pre-Tax Contributions
Account in the taxable year of the hardship distribution.
6-7
<PAGE>
ARTICLE VII
PLAN ADMINISTRATION
-------------------
7.01 The Administrative Committee. The Plan shall be administered by
----------------------------
an Administrative Committee (the "Committee") pursuant to the following
paragraphs:
(a) The Committee shall consist of the Director of Human Resources, the
Corporate Benefits Manager and such other members as are recommended
by the Director of Human Resources and Corporate Benefits Manager and
are approved by the President. Any member of the Committee may resign
at any time by delivering notice of such resignation to the Company.
The Board of Directors shall have the right at any time, with or
without cause or notice, to remove any member of the Committee.
(b) Members of the Committee shall not be entitled to compensation for
performing their duties as Committee members, but shall be entitled to
reimbursement for any expenses reasonably incurred in connection with
the administration of the Plan which are not otherwise paid by the
Company.
(c) The Committee shall be the Plan administrator and shall have full and
complete discretionary powers to control and manage the operation and
administration of the Plan, including the following:
(1) The Committee shall from time to time certify in writing to the
Trustee the names of retired, terminated or deceased
Participants, the payment method selected with respect to any
account balances payable to such persons and the date such
payments shall commence and terminate, all in accordance with the
Plan. Any such notice from the Committee shall be deemed adequate
by the Trustee if signed by any member of the Committee or the
Committee's duly authorized agent.
(2) The Committee shall file such reports with governmental
authorities as may be required by law and which are not filed by
the Trustee.
(3) The Committee may adopt and promulgate such rules and
regulations, not inconsistent with the terms and provisions
hereof, for the administration of the Plan as it deems necessary.
From time to time, the Committee may amend or supplement any such
rules or regulations. The Committee shall decide any questions of
eligibility, participation, benefit payments and any other
questions of interpretation relating to the Plan.
(4) The Committee shall review claims for benefits in accordance with
the Plan's claims procedures.
(5) The Committee shall prescribe procedures to be followed and forms
to be used in electing any alternatives available under the Plan
and to apply for benefits under the Plan.
(6) The Committee shall prepare and distribute, in such manner as the
Committee determines appropriate, information explaining the
Plan.
(7) The Committee shall receive from the Company and from
Participants such information as shall be necessary for the
proper administration of
7-1
<PAGE>
the Plan. The Committee shall be entitled to rely on any such
information so received.
(8) The Committee shall have no power to add to, subtract from or
modify any of the terms of the Plan, or to change or add to any
benefits provided by the Plan, or to waive or fail to apply any
requirements of eligibility for benefits under the Plan.
(d) A majority of the members of the Committee shall constitute a quorum.
The approval of such a quorum, expressed from time to time by a vote
at a meeting, or in writing without a meeting, shall constitute the
action of the Committee and shall be valid and effective for all
purposes of this Plan. The acts and determinations of the Committee
made in good faith within the powers conferred upon it by this Plan
shall be valid and final and conclusive (subject only to change
pursuant to the provisions of this Plan) for all purposes of the Plan.
(e) Discretionary actions of the Committee shall be made in a manner which
does not discriminate in favor of shareholders, officers or highly
compensated employees. In the event the Committee is to exercise any
discretionary authority with respect to a Participant who is a member
of the Committee, such discretionary authority shall be exercised
solely and exclusively by those members of the Committee other than
such Participant. If the Participant is the sole member of the
Committee, such discretionary authority shall be exercised solely and
exclusively by the Board of Directors.
(f) By unanimous vote, members of the Committee may allocate specific
responsibilities among themselves. Also by unanimous vote, the
Committee may delegate to persons other than members of the Committee
some or all of its discretionary authority to control and manage the
operation and administration of the Plan.
(g) The Committee may appoint such advisors, agents and representatives as
it shall deem advisable and may also employ such clerical, legal, and
medical counsel as it deems necessary. Any action taken by a properly
authorized agent of the Committee shall be deemed taken by the
Committee.
(h) The Company shall indemnify and hold harmless each Committee member
and employee against all liabilities, losses, costs and expenses,
including reasonable attorney's fees, incurred or suffered by any such
member or employee in connection with such person's management or
administration, at any time, of this Plan; provided, however, that
such indemnity shall not extend to the willful misconduct or gross
negligence of any such person.
7.02 Agent For Legal Process. The Company shall designate, by action
-----------------------
of its Board of Directors, an agent for service of legal process with respect to
any matter concerning the Plan.
7.03 Claims Procedures. Claims made for benefits under the Plan shall
-----------------
be processed in accordance with the following paragraphs:
(a) Claims for benefits shall be made in writing to the Committee.
(b) If a claim made for benefits by a Participant or Beneficiary
("claimant") is not approved in its entirety, the claimant shall be so
notified in writing by the
7-2
<PAGE>
Committee or its duly authorized agent within ninety (90) days. Notice
wholly or partially denying a claim shall be written in a manner
calculated to be understood by the claimant and contain: (i) the
specific reason or reasons for the denial, (ii) specific reference to
the pertinent Plan provisions on which the denial is based, (iii) a
description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such
material or information is necessary, and (iv) an explanation of the
review procedure set forth in the following paragraphs (c) and (d). If
such written notice of denial is not furnished within the prescribed
time, the claim shall be deemed denied for purposes of proceeding to
the review stage described below.
(c) A claimant whose claim for benefits which has been wholly or partially
denied, or his duly authorized representative, may request a review of
such denial by the Committee. A request for review shall be made in
writing to the Committee within sixty (60) days after receipt by the
claimant of written notification of denial of such claim and may
contain issues and comments with respect to the claim. A claimant who
submits a request for review shall be entitled to access documents
pertinent to his claim.
(d) Upon receipt of a request for review of a denial of a claim, the
Committee shall, within sixty (60) days, review in detail the nature
and foundations of the claim, including any issues and comments
submitted by the claimant or his duly authorized representative and
the reasons for the prior denial of the claim. After a full and fair
review, the Committee shall render its decision in writing to the
claimant. The decision on review shall include the specific reasons
for the decision, be written in a manner calculated to be understood
by the claimant, and shall include specific references to the
pertinent Plan provisions on which the decision is based.
(e) The Committee shall have full and complete authority to determine
eligibility for benefits, to construe the terms of the Plan and to
decide any matters presented through the claims procedure. Any final
determination by the Committee shall be binding on all parties. If
challenged in court, such determination shall not be subject to de
--
novo review and shall not be overturned unless proven to be arbitrary
----
and capricious upon the evidence considered by the Committee at the
time of such determination.
7.04 Records. The Company and each other person performing any
-------
functions in the operation or administration of the Plan or the management or
control of the assets of the Plan shall keep such records as may be necessary or
appropriate in the discharge of their respective functions hereunder, including
records required by the Employee Retirement Income Security Act or any other
applicable law. Records shall be retained as long as necessary for the proper
administration of the Plan and at least for any period required by said Act or
other applicable law.
7.05 Correction of Errors. It is recognized that in the operation and
--------------------
administration of the Plan certain mathematical and accounting errors may be
made or mistakes may arise by reason of factual errors in information supplied
to the Trustee, the Company or the Committee. Each such party shall have power
to cause such equitable adjustments to be made to correct such errors as they,
in their discretion, consider appropriate. Such adjustments shall be final and
binding on all persons.
7.06 Evidence. Evidence required of anyone under this Plan may be by
--------
certificate, affidavit, document, or other instrument which the person acting in
reliance thereon considers to be pertinent and reliable and to be signed, made,
or presented by the proper party.
7-3
<PAGE>
7.07 Bonding. Plan officials and fiduciaries shall be bonded to the
-------
extent required by the Employee Retirement Income Security Act. Premiums for
such bonding may, in the sole discretion of the Company, be paid in whole or in
part from the Trust Fund. The Company may provide by agreement with any person
that the premium for required bonding shall be paid by such person.
7.08 Waiver of Notice. Any notice required hereunder may be waived by
----------------
the person entitled thereto.
7.09 Unclaimed Accounts. If a Participant or Beneficiary can not be
------------------
located, the Committee, by mail addressed to the last known address on record
with the Company, shall notify the Participant or Beneficiary that he is
entitled to a distribution under the Plan and shall reference the relevant Plan
provisions. If the Participant or Beneficiary fails to respond to the notice by
contacting the Plan Administrator in writing within six (6) months after the
date the notice was mailed, the Account shall be forfeited and reallocated in
accordance with Section 4.04.
In the event a Participant or Beneficiary who has incurred a
forfeiture in accordance with this Section 7.09 shall subsequently make a valid
claim in accordance with Section 7.03, an amount equal to the amount previously
forfeited shall be restored and paid to the Participant or Beneficiary if such
claim is made prior to the termination of this Plan and distribution of all
Accounts hereunder. This restored amount shall come first from any unallocated
forfeitures under Section 4.04, then from the Company's contribution (if any)
for that Plan Year, and finally, if necessary, from a special one-time Company
contribution made solely for this purpose.
7.10 USERRA Compliance. Notwithstanding any provision of the Plan to
-----------------
the contrary, contributions, benefits, Plan loan repayment suspensions and
service credit with respect to qualified military service will be provided in
accordance with (S) 414(u).
7-4
<PAGE>
ARTICLE VIII
TRUST FUND
----------
8.01 Composition. All sums of money and all securities and other
-----------
property received by the Trustee for purposes of the Plan, together with all
investments made therewith, the proceeds thereof, and all earnings and
accumulations thereon, and the part from time to time remaining shall constitute
the "Trust Fund." The Trust Fund shall be held in trust pursuant to the terms of
a Trust Agreement entered into by the Company and the Trustee.
8.02 Compensation, Reimbursement. The Trustee, other than a Trustee
---------------------------
who is also a Participant under the Plan or an employee of the Company, shall be
entitled to receive reasonable compensation for services as Trustee in such
amount as may be agreed upon from time to time between the Company and the
Trustee. The Trustee shall be entitled to reimbursement for all expenses
reasonably incurred by the Trustee in the performance of services. Such
compensation and reimbursements shall be paid from the Trust Fund unless paid by
the Company.
8.03 No Diversion. The Trust Fund shall be maintained for the
------------
exclusive purpose of providing benefits to Participants under the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan. No
part of the corpus or income of the Trust Fund may be used for, or diverted to,
purposes other than for the exclusive benefit of Plan Participants or their
Beneficiaries. Notwithstanding the foregoing, the following paragraphs shall
apply:
(a) The establishment of the Plan by the Company is contingent upon
obtaining initial approval of the Internal Revenue Service of the
Plan. In the event that the Internal Revenue Service fails to approve
the Plan, the Trustee shall promptly proceed to return all
contributions made by the Company with respect to Plan Years after the
effective date of the restated Plan hereunder to the Company. In no
event shall the amounts described in the preceding sentence be
returned later than one (1) year after the date of the final denial of
qualification of the Plan, including the final resolution of any
appeals before the Internal Revenue Service or the courts.
(b) If a contribution is made by reason of mistake of fact, then such
contribution shall be returned to the Company within one (1) year
after the payment was made.
(c) If a contribution is conditioned on its deductibility, to the extent
that a deduction is disallowed, such contribution shall be returned to
the Company within one (1) year after the disallowance thereof.
(d) In the case of a termination of the Plan, any residual assets which
are held in suspense pursuant to Section 10.1(d) shall be returned to
the Company.
8.04 Funding Policy and Method. The Committee shall convene at a
-------------------------
meeting duly called for such purpose and establish a funding policy and method
consistent with the objectives of the Plan and the requirements of law. The
Committee shall meet periodically to review such funding policy and method. In
establishing and reviewing such funding policy and method, the Committee shall
endeavor to determine the Plan's short-term and long-term objectives and
financial needs, taking into account the need for liquidity to pay benefits and
the need for investment growth. The Committee is specifically authorized, but
not required, to establish a separate funding arrangement within the Trust to
facilitate the segregation of certain accounts for investment purposes. If a
separate funding arrangement is directed to be
8-1
<PAGE>
established, the Trustee shall not be responsible for the selection of the
funding arrangement to be used for this purpose. All actions taken pursuant to
this Section shall be recorded in the minutes of the meeting of the Committee
and shall be communicated to the Trustee and the Committee.
8-2
<PAGE>
ARTICLE IX
SPECIAL RULES FOR TOP-HEAVY PLANS
---------------------------------
9.01 Definitions of Key Employee. A key employee is any employee
---------------------------
(including any deceased employee) of the Company who at any time during the Plan
Year containing the determination date for the Plan Year in question or the four
(4) preceding Plan Years is (i) an officer having an annual compensation greater
than fifty percent (50%) of the dollar amount in effect under Section
415(b)(1)(A) of the Internal Revenue Code for any such Plan Year, (ii) the top
ten (10) employees by compensation having annual compensation of more than the
amount in effect under Section 415(c)(1)(A) of the Internal Revenue Code for the
Plan Year and owning (or considered as owning within the meaning of the
attribution rules of Section 318 of the Internal Revenue Code) both more than a
one-half percent (2%) interest and the largest interests in the Company, (iii) a
Five Percent (5%) Owner of the Company, or (iv) a one percent (1%) owner having
annual compensation from the Company for such Plan Year of more than $150,000,
as such terms are defined in Section 416 of the Internal Revenue Code and
applicable regulations. For purposes of this definition the following paragraphs
shall also be applicable:
(a) The terms key employee, former key employee, and non-key employee
include the beneficiaries of such individuals. The term "non-key
employee" means any employee who is not a key employee.
(b) Whether an individual is an officer shall be determined upon the basis
of all the facts, including, for example, the source of the officer's
authority, the term for which elected or appointed, and the nature and
extent of the duties to be performed.
(c) Self-employed individuals are to be treated as employees and their
earned income from self-employment is to be treated as compensation
for purposes of this Section.
9.02 Aggregation of Plans. The following Paragraphs describe the
--------------------
required aggregation and permissive aggregation rules:
(a) Required Aggregation Group. The required aggregation group of the
--------------------------
Company includes each qualified retirement plan (including a
simplified employee pension plan, "SEP") of the Company in which a key
employee participates in the Plan Year containing the determination
date, or any of the four (4) preceding Plan Years. In addition, each
other such plan of the Company which, during this period, enables any
such plan in which a key employee participates to meet the
nondiscrimination in benefits or contributions requirements of
Internal Revenue Code Section 401(a)(4) or the minimum participation
standards of Internal Revenue Code Section 410, is part of the
required aggregation group. Any such plan of the Company which has
been terminated is also part of the required aggregation group if it
was maintained within the last five (5) years ending on the
determination date for the Plan Year in question and would, but for
the fact that it terminated, be part of a required aggregation group
for such Plan Year.
(b) Permissive Aggregation Group. A permissive aggregation group consists
----------------------------
of plans of the employer that are required to be aggregated, plus one
or more plans that are not part of a required aggregation group but
that satisfy the requirements of Internal Revenue Code Sections
401(a)(4) and 410 when considered together with the required
aggregation group.
9-1
<PAGE>
(c) Collectively Bargained Plans. Collectively bargained plans that
----------------------------
include a key employee must be included in the required aggregation
group for the employer. Collectively bargained plans that do not
include a key employee may be included in a permissive aggregation
group. The special top-heavy rules do not apply to collectively
bargained plans, however, whether or not they include a key employee.
9.03 Determination Date. Whether a plan is top-heavy is determined on
------------------
the determination date. The determination date is (i) the last day of the
preceding Plan Year, or (ii) in the case of the first Plan Year, the last day of
such first Plan Year. The present value of accrued benefits and distributions
made as of the determination date are generally determined as of the
determination date. An employee's status as a key employee is based on the Plan
Year containing the determination date. If more than one plan is aggregated
pursuant to Section 11.2, the present value of the accrued benefits (including
distributions for key employees and all employees) is determined separately for
each plan as of each plan's determination date. The plans are then aggregated by
adding the results of each plan as of the determination dates for such plans
that fall within the same calendar year. If the total results show that the
plans are top-heavy, each plan will be top-heavy for the plan year commencing
immediately following its respective determination date.
9.04 Present Value of Accrued Benefits In A Defined Contribution
-----------------------------------------------------------
Plan. The present value of accrued benefits in the Plan, for purposes of Section
----
11, as of the determination date for any individual, includes the balance of (i)
the individual's Company Contribution Account and Cash Option Account as of the
most recent valuation date occurring within a twelve (12) month period ending on
the determination date, and (ii) an adjustment for employer contributions due as
of the determination date. In the case of a defined contribution plan, other
than a money purchase pension plan, the adjustment in (ii) is generally the
amount of any employer contributions actually made after the valuation date but
on or before the determination date. In the first Plan Year of the Plan,
however, the adjustment in (ii) should also reflect the amount of any
contributions made after the determination date that are allocated as of a date
in the first Plan Year. In the case of a money purchase pension plan, the
account balance in (i) should include contributions that would be allocated as
of a date not later than the determination date, even though those amounts are
not yet required to be contributed. The adjustment in (ii) should reflect the
amount of any contribution actually made (or due to be made) after the valuation
date but before the expiration of the extended payment period in Internal
Revenue Code Section 412(c)(10). The present value of accrued benefits includes
employee contributions whether voluntary or mandatory, determined as the balance
of the individual's Employee Contribution Account as of the determination date.
If an employee has not performed services for the employer maintaining the Plan
at any time during the five (5) year period ending on the determination date,
any secured benefit for such individual (and the account of such individual)
shall not be taken into account.
9.05 Adjustments to Present Value of Accrued Benefits.
------------------------------------------------
(a) Distributions. Distributions made within the Plan Year that includes
-------------
the determination date or within the four (4) preceding Plan Years are
added to the present value of accrued benefits in testing for top-
heaviness. In the case of the distribution of an annuity contract, the
amount of such distribution is deemed to be the current actuarial
value of the contract, determined on the date of distribution. A
distribution does not fail to be considered in determining the present
value of secured benefits merely because it was made before the
effective date of Internal Revenue Code Section 416.
(b) Rollovers and Plan-to-Plan Transfers. In the case of unrelated
------------------------------------
rollovers or plan-to-plan transfers, the plan providing the
distributions always counts the
9-2
<PAGE>
distribution and the plan accepting the rollover or transfer does not
consider the rollover part of the accrued benefit if such rollover is
accepted after December 31, 1983. In the case of related rollovers or
transfers, the plan providing the rollover does not count the rollover
as a distribution and the plan accepting the rollover counts the
rollover in the present value of the accrued benefits. Rules for
related rollovers do not depend on whether the rollover was accepted
prior to December 31, 1983. An unrelated rollover or transfer is both
initiated by the employee and made from a plan maintained by one
employer to a plan maintained by another employer. A related rollover
or transfer is either not initiated by the employee or is made to a
plan maintained by the same employer.
9.06 Top-Heavy Plan and Super Top-Heavy Plan Definitions and Ratios.
--------------------------------------------------------------
The term "top-heavy group" means any aggregation group if the sum (as of the
determination date) of the present value of the accrued benefits for key
employees under all defined benefit plans included in such group and all defined
contribution plans included in such group exceeds sixty percent (60%) of a
similar sum determined for all employees, excluding former key employees. In the
case of plans that are required to be aggregated, each plan in the required
aggregation group will be top-heavy if the group is top-heavy. No plan in the
required aggregation group will be top-heavy if the group is not top-heavy. If a
permissive aggregation group is top-heavy, only those plans that are part of the
required aggregation group are top-heavy. Plans that are not part of the
required aggregation group are not top-heavy. A super top-heavy plan is a plan
in a top-heavy group in which the present value of the accrued benefits for key
employees exceeds ninety percent (90%) of the present value of the accrued
benefits for all employees. The Committee shall determine for each Plan Year
whether the Plan is top-heavy or super top-heavy, but precise top-heavy ratios
need not be computed every year.
9.07 Adjustments to Plan Provisions If Plan Is Top-Heavy. For any
---------------------------------------------------
Plan Year that the Plan is top-heavy the following adjustments to its provisions
shall be applicable and shall be implemented by the Committee where necessary to
preserve the qualified status of the Plan:
(a) Vesting. A Participant's Account shall be subject to the following
-------
vesting schedule:
Years of Vesting
Service Vesting %
---------------- ---------
Less than 2 0%
2 20%
3 50%
4 60%
5 years or more 100%
(b) Minimum Benefits. The Company contributions allocated to the Company
----------------
Contribution Account of any non-key employee for each Plan Year in
which the Plan is top-heavy must equal at least three percent (3%) of
Eligible Compensation for that Plan Year for each non-key employee. A
lower minimum is permissible however, in the case where the
contributions plus made or required to be made for key employees is
less than three percent (3%). The employees who must receive the
defined contribution plan minimum benefit are all non-key employees
covered by the Plan who have satisfied the eligibility requirements of
the Plan as to age and waiting period service, and who have not
incurred a Termination of Employment as of the last day of the Plan
Year. The employees covered by the Plan include individuals who have
(i) failed to complete 1000 Hours of Service in the Plan Year, (ii)
declined to make mandatory contributions to the Plan, or (iii) been
excluded from the Plan
9-3
<PAGE>
because such individual's compensation is less than a stated amount
but must be considered as "participants" to satisfy applicable
coverage requirements. The minimum benefit to be provided hereunder
may not be integrated with social security.
(c) Minimum Benefits If Company Maintains Both Defined Contribution and
-------------------------------------------------- ----------------
Defined Benefit Plan. Employees covered under only the defined benefit
--------------------
plan must receive the defined benefit minimum and employees covered
under the defined contribution plan must receive the defined
contribution plan minimum. In the case of employees covered under both
defined benefit and defined contribution plans, the defined benefit
minimum shall be provided but shall be offset by the benefits provided
under the defined contribution Plans.
(d) Maximum Limitations on Annual Additions. If the Plan is super top-
---------------------------------------
heavy, in computing the denominators of the defined benefit and
defined contribution fractions under paragraphs (a) and (b) of Section
10.2, a factor of 1.0 is used instead of 1.25. If the Plan is top-
heavy (but not super top-heavy), the same rule applies unless each
non-key employee receives an additional minimum contribution or
benefit. In the case of a defined contribution plan, the additional
minimum benefit is one percent of the covered employee's compensation.
9-4
<PAGE>
ARTICLE X
NONDISCRIMINATION REQUIREMENTS
------------------------------
10.01 Special Definitions. The following special definitions are
-------------------
applicable to this Section:
(a) The "actual contribution percentage" for the group of covered
employees who are highly compensated employees and the group of non-
highly compensated covered employees is the average of the actual
contribution ratios, calculated separately for each employee in such
group, of the sum of matching contributions and after tax
contributions paid under the Plan on behalf of each such employee for
such Plan Year, to the employee's Eligible Compensation for such Plan
Year. The actual contribution percentage for each group shall be
calculated to the nearest one-hundredth of one percent.
(b) "Covered employees" are all Eligible Employees of the Company who have
satisfied the participation requirements of Section 2.01, but without
regard to whether elective deferrals, matching contributions or After
Tax Contributions are made during the Plan Year for such employees.
(c) The "actual deferral percentage" for the group of covered employees
who are highly compensated employees and the group of non-highly
compensated covered employees is the average of the actual deferral
ratios, calculated separately for each employee in such group, of the
amount of elective deferrals to the employee's Eligible Compensation
for such Plan Year. The actual deferral percentage for each group
shall be calculated to the nearest one-hundredth of one percent.
(d) "Elective deferrals" are those contributions made by the Company to
the Plan, or any other qualified cash or deferred arrangement
maintained by the Company, on behalf of employees, to the extent such
contributions are not includable in the employee's gross income for
the taxable year under Section 402(a)(8) of the Internal Revenue Code.
(e) "Employee contributions" are voluntary after-tax contributions made to
the Plan by a Participant.
(f) "Excess aggregate contributions" means, with respect to any Plan Year,
the amount of matching contributions and employee contributions minus
the amount determined by multiplying the employee's actual
contribution percentage (determined after application of such leveling
method) by his compensation.
(g) "Excess contributions" means, with respect to any Plan Year, the sum
of elective contributions minus the amount determined by multiplying
the employee's actual deferral percentage (determined after
application of such leveling method) by his compensation.
(h) "Excess deferrals" means the amount of elective deferrals for a
calendar year that a Participant allocates to this Plan that, when
added to amounts deferred under other plans or arrangements described
in Sections 401(k), 408(k) or 403(b) of the Internal Revenue Code,
exceeds the $9,500 limit (as adjusted) set forth in Section 3.02.
10-1
<PAGE>
(i) A "highly compensated employee" is any employee who (i) during the
current Plan Year or the preceding Plan Year was a five percent (5%)
Owner of the Company, or (ii) during the preceding Plan Year received
compensation from the Company in excess of $80,000, as adjusted in
accordance with the Code.
(j) The term "matching contribution" means any Company contribution made
to the Plan on behalf of an employee on account of an employee
contribution made by such employee, and any Company contribution made
to the Plan on behalf of an employee on account of an employee's
elective deferral.
10.02 Limitations on Elective Deferrals.
---------------------------------
(a) The "actual deferral percentage test" shall be satisfied each Plan
Year, taking into account the elective deferrals made on behalf of all covered
employees for such Plan Year. The actual deferral percentage test is satisfied
if either of the tests specified in paragraphs (1) and (2) below, is satisfied:
(1) The actual deferral percentage for the group of covered employees
who are highly compensated employees is not more than the actual
deferral percentage of the group of non-highly compensated
covered employees, based on Eligible Compensation, multiplied by
1.25; or,
(2) The excess of the actual deferral percentage for the group of
covered employees who are highly compensated employees over that
of the group of non-highly compensated covered employees, based
on Eligible Compensation, is not more than two (2) percentage
points, and the actual deferral percentage for the group of
covered employees who are highly compensated employees is not
more than the actual deferral percentage of the group of non-
highly compensated covered employees, based on Eligible
Compensation, multiplied by two (2).
(b) If any other plan of the Company which includes a cash or deferred
arrangement together with this Plan is considered as one plan for purposes of
Sections 401(a)(4) or 410(h) of the Internal Revenue Code, the cash or deferred
arrangements included in such plans shall be treated as one arrangement for
purposes of this Section. If any highly compensated employee is a participant
under two or more cash or deferred arrangements of the Company, for purposes of
determining the deferral percentage with respect to such employee, all such cash
or deferred arrangements shall be treated as one cash or deferred arrangement,
unless such cash or deferred arrangements may not be aggregated pursuant to
pertinent Treasury regulations.
(c) For purposes of applying the foregoing deferral percentage tests for a
Plan Year, elective deferrals will be considered for a Plan Year if (1)
allocated to the Participant's Account as of any date within that Plan Year, (2)
the allocation is not contingent upon the Participant's participation in the
Plan or performance of services on any later date, (3) the deferral relates to
compensation that either would have been received by the Participant in the Plan
Year but for the Participant's election to defer under the Plan or is
attributable to services performed by the Participant in the Plan Year and, but
for the Participant's election to defer, would have been received by the
Participant within 2-1/2 months after the close of that Plan Year, and (4) the
elective deferral is actually paid to the trust no later than the end of the 12-
month period following the Plan Year to which the deferral relates.
10.03 Distribution of Excess Contributions. The amount of excess
------------------------------------
contributions for a Plan Year, and any income allocable to such excess
contributions, shall be distributed within the first two and one-half (2-1/2)
months of the following Plan Year and in
10-2
<PAGE>
no event later than the close of the following Plan Year. The following
paragraphs shall apply in distributing excess contributions from the Plan:
(a) The amount of excess contributions for a highly compensated employee
during any Plan Year is to be determined by the following leveling
method, under which the actual deferral ratio of the highly
compensated employee with the highest actual deferral ratio is reduced
to the extent required to (1) enable the Plan to satisfy the actual
deferral percentage test, or if higher, (2) cause such highly
compensated employee's actual deferral ratio to equal the ratio of the
highly compensated employee with the next highest actual deferral
ratio. This process shall be repeated until the Plan satisfies the
actual deferral percentage test.
(b) Any distribution of the excess contributions for any Plan Year shall
be made to highly compensated employees on the basis of the respective
portions of the excess contributions attributable to each of such
employees. When a highly compensated employee makes an excess
contribution for a Plan Year and receives a distribution of his entire
account balance before distributions are made pursuant to this
Section, the compensation and elective contributions for such an
employee shall be used in determining the actual deferral ratio of the
highly compensated group. No corrective distribution shall be made
for that employee; provided, however, that if the employee withdraws
less than his total account balance, the amount distributed to him
shall be the lesser of his excess contribution or his remaining
account balance.
(c) Income allocable to excess contributions shall be computed according
to any method deemed reasonable by the Committee provided such method
is used consistently for all Participants and for all corrective
distributions for that Plan Year. The Plan shall not distribute any
income allocable to the Participant's Account for the period between
the close of the applicable Plan Year and the date the excess
contributions are distributed to the Participant (the "gap period").
(d) A corrective distribution of excess contributions (and income) shall
be includable in the Participant's gross income on the date the
Participant would have received the elective contribution had the
Participant elected cash; if, however, the corrective distribution is
made more than 2-1/2 months following the close of the Plan Year to
which the excess contribution relates, it is included in the
Participant's income in the taxable year of distribution.
(e) If the Plan provides for the receipt of employee contributions, the
excess contributions shall be recharacterized as an employee
contribution, distributed or both at the election of the highly
compensated employee on a year-to-year basis. If the excess
contribution is to be recharacterized, the recharacterization must
occur within the first two and one-half (2-1/2) months after the Plan
Year to which the recharacterization relates. Excess contributions
may not be recharacterized, however, with respect to a highly
compensated employee to the extent that such recharacterized excess
contributions, in combination with the employee contributions actually
made by such highly compensated employee, exceed the maximum permitted
amount of employee contributions. Excess contributions
recharacterized pursuant to this paragraph are includable in the
highly compensated employee's gross income on the earliest dates any
elective contribution made on behalf of the highly compensated
employee during the Plan Year would have been received by the highly
compensated employee had the highly compensated employee originally
elected to receive the amounts in cash.
10-3
<PAGE>
(f) The amount of excess contributions that may be recharacterized or
distributed pursuant to the preceding paragraphs for a taxable year
shall be reduced by any excess deferrals previously distributed with
respect to such Participant for the Plan Year beginning with or within
such taxable year.
(g) Unless otherwise prescribed by the Secretary of the Treasury, the Plan
shall not be required to obtain the consent of the Participant or the
Participant's spouse in order to distribute an excess contribution.
10.04 Limitations on Matching Contributions and Employee After-Tax
------------------------------------------------------------
Contributions.
-------------
(a) The "actual contribution percentage test" shall be satisfied each Plan
Year, taking into account the matching contributions and employee
contributions made by, or on behalf of, all covered employees for such
Plan Year. The actual contribution percentage test is satisfied if
either of the tests specified in paragraphs (1) and (2), below, is
satisfied:
(1) The actual contribution percentage for the group of covered
employees who are highly compensated employees is not more than
the actual contribution percentage of the group of non-highly
compensated covered employees, multiplied by 1.25; or,
(2) The excess of the actual contribution percentage for the group of
covered employees who are highly compensated employees over that
of the group of non-highly compensated covered employees is not
more than two (2) percentage points, and the actual contribution
percentage for the group of covered employees who are highly
compensated employees is not more than the actual contribution
percentage of the group of non-highly compensated covered
employees, multiplied by two (2).
(b) If two or more plans of the Company to which employee contributions,
matching contributions, or both are made are treated as one plan for
purposes of Sections 401(a)(4) or 410(b) of the Internal Revenue Code,
such plans shall be treated as one plan for purposes of this Section.
If a highly compensated employee participates in two or more plans of
the Company to which such contributions are made, all such
contributions shall be aggregated for purposes of the actual
contribution percentage test, unless such plans may not be aggregated
Pursuant to pertinent Treasury regulations.
(c) For purposes of applying the foregoing actual contribution percentage
test, the following paragraphs shall apply:
(1) An employee contribution shall be considered for a Plan Year in
which such amounts are deducted from the employee's compensation.
Payment by the Participant to an agent of the Plan shall be
treated as a contribution to the Plan at the time of payment to
the agent if the funds so paid are transmitted to the Plan within
s reasonable time after payment to the agent. Excess
contributions that are recharacterized pursuant to Section 12.3
(f) shall be considered for the Plan Year that includes the time
at which such excess contributions are includable in the gross
income of the Participant.
(2) A matching contribution shall be considered for a Plan Year only
if allocated to the Participant's Company Contribution Account
under the
10-4
<PAGE>
terms of the Plan, provided that the contribution is actually
paid to the Plan no later than the end of the 12-month period
following the close of that Plan Year and the contribution is
made due to a Participant's elective contributions or employee
contributions for that Plan Year.
10.05 Distribution of Excess Aggregate Contributions. The amount of
----------------------------------------------
excess aggregate contributions for a Plan Year, and any income allocable to such
excess aggregate contributions, shall be distributed (or, if forfeitable,
forfeited) within the first two and one-half (2-1/2) months of the following
Plan Year and in no event later than the close of the following Plan Year. Such
contributions (and such income) may be distributed without regard to any other
provision of law. The following paragraphs shall apply in distributing excess
aggregate contributions from the Plan:
(a) The determination of the amount of excess aggregate contributions for
a Plan Year shall be made after determining the excess contributions,
if any, to be treated as employee contributions due to
recharacterization. The amount of excess aggregate contributions for
a highly compensated employee during any Plan Year is to be determined
by the following leveling method, under which the actual contribution
ratio of the highly compensated employee with the highest actual
contribution ratio is reduced to the extent required to (1) enable the
Plan to satisfy the actual contribution percentage test, or if higher,
(2) cause such highly compensated employee's actual contribution ratio
to equal the ratio of the highly compensated employee with the next
highest actual contribution ratio. This process shall be repeated
until the Plan satisfies the actual contribution percentage test.
(b) Any distribution of the excess aggregate contributions for any Plan
Year shall be made to highly compensated employees on the basis of the
respective portions of such amounts attributable to each of such
employees. Forfeitures of excess aggregate contributions may not be
allocated to Participants whose contributions are reduced in
accordance with this Section.
(c) Income allocable to excess aggregate contributions shall be computed
according to any method deemed reasonable by the Committee provided
such method is used consistently for all Participants and for all
corrective distributions for that Plan Year. The Plan shall not
distribute any income allocable to the Participant's account, or
accounts, containing such excess aggregate contributions for the
period between the close of the applicable Plan Year and the date the
excess aggregate contributions are distributed to the Participant (the
"gap period").
(d) To the extent that a corrective distribution of excess aggregate
contributions consists of employee contributions, only the income on
such contributions shall be includable in the Participant's income.
If the distribution is made within 2-1/2 months after the close of the
Plan Year for which the excess aggregate contributions were made, the
distribution is includable in the Participant's gross income in the
Participant's taxable year ending with or within that Plan Year; if,
however, the distribution is made more than 2-1/2 months after the
Plan Year for which the excess aggregate contributions were made, the
distribution is includable in the Participant's income in the taxable
year of distribution.
(e) Notwithstanding anything herein to the contrary, the method by which
excess aggregate contributions are distributed, in order to satisfy
the actual contribution percentage test, must not discriminate in
favor of highly compensated employees. A distribution pursuant to
this Section shall not be deemed discriminatory if either (i)
unmatched employee contributions are distributed
10-5
<PAGE>
before matched employee contributions, or (ii) matching contributions
are distributed prior to employee contributions.
(f) Unless otherwise prescribed by the Secretary of the Treasury, the Plan
shall not be required to obtain the consent of the Participant or the
Participant's spouse in order to distribute excess aggregate
contributions.
10.06 Required Reductions for Multiple Use of Alternative Limitation.
--------------------------------------------------------------
The Company shall determine, in accordance with pertinent Treasury regulations,
whether multiple use of the alternative limitation has occurred. The following
paragraphs shall also apply:
(a) Multiple use of the alternative limitation shall be deemed to occur if
both of the conditions in paragraphs (1), (2), and (3) below are
satisfied:
(1) One or more highly compensated employees of the Company are
eligible to participate in this Plan and in a plan to which
employee and matching contributions are made;
(2) The actual deferral percentage of the group of highly compensated
employees described, in paragraph (1) above, exceeds 125 percent
of the actual deferral percentage of non-highly compensated
employees and the actual contribution percentage of such highly
compensated employees exceeds 125 percent of the actual
contribution percentage of the non-highly compensated employees;
and
(3) The sum of the actual deferral percentage and the actual
contribution percentage of the highly compensated group of
employees exceeds the "aggregate limit" described in paragraph
(b) below. For purposes of this Section 12.6(a)(3), the actual
deferral percentage and the actual contribution percentage shall
be determined after distribution of excess deferrals, excess
contributions and excess aggregate contributions and after
recharacterization of excess contributions.
(b) The aggregate limit is the sum of:
(1) 125 percent of the greater of (A) the actual deferral percentage
of the non-highly compensated employees, or (B) the actual
contribution percentage of the non-highly compensated employees;
plus
(2) Two plus the lesser of (A) or (B) above; in no event, however,
shall this amount exceed 200 percent of the lesser of (A) or (B)
above.
(c) If a multiple use of the alternative limitation occurs, such multiple
use shall be corrected by reducing, at the election of the Committee,
either the actual deferral percentage or the actual contribution
percentage of the highly compensated employees. The amount of the
reduction shall be determined through use of the leveling method.
(d) If any other plan of the Company which includes a cash or deferred
arrangement together with this Plan is considered as one plan for
purposes of Sections 401(a)(4) or 410(b) of the Internal Revenue Code,
the cash or deferred arrangements shall be treated as one arrangement
for purposes of this Section. Similarly, if two or more plans of the
Company to which employee contributions, matching contributions or
both are made are treated as one plan
10-6
<PAGE>
for purposes of Sections 401(a)(4) or 410(b) of the Internal Revenue
Code, such plans shall be treated as one plan for purposes of this
Section.
10-7
<PAGE>
ARTICLE XI
ADOPTION, AMENDMENT, TERMINATION AND MERGER
-------------------------------------------
11.01 Adoption of Plan by Additional Company. The Board of Directors
--------------------------------------
may extend the Plan to employees of any Company and their participation shall be
effective upon appropriate action being taken by the Company necessary to adopt
the Plan. In that event, or if any persons become Eligible Employees of the
Company 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 such
company shall be recognized under the Plan. The following paragraphs shall also
be applicable:
(a) Each adopting Company shall participate in the Trust Fund hereunder.
(b) The Trustee may, but shall not be required to, commingle and hold as
one Trust Fund all contributions made by all adopting Companies.
(c) The Board of Directors shall have the sole authority to amend the Plan
and Trust and the Committee shall have the sole authority to
administer the Plan.
(d) Any Affiliated Company participating in the Plan may terminate its
participation in the Plan and Trust by appropriate action. In that
event the funds held on account of the employees of the terminating
company, and unpaid balances of former employees of such company,
shall be segregated to a separate trust, pursuant to certification by
the Committee to the Trustee to do so, 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 of the powers and
duties of the Board of Directors, including appointment of the members
of the committee of that separate plan. Alternatively, upon
certification by the Committee to the Trustees, other appropriate
disposition of the terminating company's Plan assets shall be made.
11.02 Amendment. Subject to the nondiversion provisions of the Plan,
---------
the Board of Directors may amend the Plan at any time and from time to time. No
amendment of the Plan shall have the effect of changing the rights, duties and
liabilities of the Trustee without its written consent. No amendment shall
divest a Participant or Beneficiary of benefits accrued prior to the amendment
or eliminate any optional form of benefit. The Company agrees that promptly
upon adoption of any amendment to the Plan it will furnish a copy of the
amendment together with a certificate evidencing its due adoption, to the
Trustee then acting and to any other participating companies. No amendment
necessary to comply with any applicable law, regulation, or order of the
Internal Revenue Code or the Employee Retirement Income Security Act or any
other provision of law shall be considered prejudicial to the rights of any
employee or his Beneficiaries.
11.03 Termination. The Plan may be terminated by action of the Board
-----------
of Directors. Any such voluntary termination of the Plan shall be made in
compliance with all applicable provisions of law.
11.04 Discontinuance of Contributions. Whenever the Company
-------------------------------
determines that it is impossible to or not advisable to make further
contributions as provided in the Plan, the Board of Directors may, without
liquidating the Trust Fund, adopt an appropriate resolution permanently
discontinuing all further contributions to the Plan. A certified copy of such
resolution shall be delivered to the Committee and the Trustee. Thereafter, the
Committee and
11-1
<PAGE>
the Trustee shall continue to administer all provisions of the Plan which are
necessary and remain in force, other than provisions relating to contributions
by the Company.
11.05 Rights Upon Termination, Partial Termination and Discontinuance
---------------------------------------------------------------
of Contributions. Notwithstanding any other provisions of this Plan, the
----------------
Vested Balance of the Company Contribution Account of each Participant shall
become one hundred percent (100%) upon termination of the Plan, either as
provided in Section 10.03 or by operation of law, upon a partial termination of
the Plan or upon a discontinuance of contributions to the Plan by the Company,
either as provided in Section 10.04 or by operation of law.
11.06 Deferral of Distributions. In the event of a complete or
-------------------------
partial termination of the Plan, the Committee or the Trustee may defer any
distribution of benefit payments to Participants and Beneficiaries with respect
to which such termination applies until after the following have occurred:
(a) Receipt of a final determination from the Treasury Department or any
court of competent jurisdiction regarding the effect of such
termination on the qualified status of the Plan under Section 401(a)
of the Internal Revenue Code.
(b) Appropriate adjustments of the Trust Fund to reflect taxes, costs and
expenses, if any, incident to such termination.
11.07 Merger, Consolidation or Transfer of Plan Assets. In the case
------------------------------------------------
of any merger or consolidation of the Plan with any other plan, or in the case
of the transfer of assets or liabilities of the Plan to any other plan,
provision shall be made so that each Participant and Beneficiary would (if such
other plan 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).
11-2
<PAGE>
ARTICLE XII
MISCELLANEOUS
-------------
12.01 Responsibility of Insurance Companies. No insurance company
-------------------------------------
issuing contracts upon the application of the Trustee or the Board of Directors
shall be deemed to be a party to the Plan nor shall it be responsible for its
validity. The issuing insurance company shall not be required to look into the
terms of the Plan nor be responsible to see that any action of the Committee is
authorized by its terms. No issuing insurance company shall be obligated to see
to the distribution or further application of any monies paid by it pursuant to
any direction of the Committee.
12.02 Limitation of Fiduciary Responsibility and Liability. The
----------------------------------------------------
duties of each fiduciary named in this Plan shall be limited to those duties
specifically set forth herein. No officer, director or employee of the Company
who is not designated as a fiduciary shall have any discretionary authority or
control respecting the management of the Plan or any discretionary authority or
control respecting the management or disposition of the assets of the Plan.
Except as otherwise provided by law, no fiduciary shall be responsible for the
performance of duties not assigned to him as provided herein or for the acts or
omissions of any other fiduciary. Liability for acts and omissions which
occurred prior to January 1, 1998, shall be controlled by the terms of the Plan
as it existed prior to that date.
12.03 Numbers and Genders. All words used herein in the singular
-------------------
number shall extend to and include the plural. All words used in the plural
number shall extend to and include the singular. All words used in any gender
shall extend to and include all genders.
12.04 Headings. Headings at the beginning of the Sections hereof are
--------
for convenience of reference, shall not be considered a part of the text of the
Plan, and shall not influence its construction.
12.05 Severability. In case any provision of this said Plan shall be
------------
held illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts of this Plan which shall then be construed and
enforced as if such illegal or invalid provision had never been inserted herein.
12-1
<PAGE>
IN WITNESS WHEREOF, APW Ltd. has caused these presents to be executed
by its officers thereunto duly authorized, as of the ________ day of
______________________, 2000.
APW LTD.
By______________________________
President
Attest:
_________________________________
12-2
