<PAGE> 1
REGISTRATION NO.__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------------------
BROWN-FORMAN CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 61-0143150
(State of incorporation) (I.R.S. Employer Identification No.)
850 DIXIE HIGHWAY, LOUISVILLE, KENTUCKY 40210
(Address of Principal Executive Offices and Zip Code)
- --------------------------------------------------------------------------------
Brown-Forman Corporation Savings Plan
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees
Fetzer Vineyards Profit Sharing Plan
Hartmann Employee Savings and Investment Plan
Lenox Savings Plan for Collectively Bargained Employees
Lenox, Incorporated Employee Savings and Investment Plan
Lenox Retail Savings and Investment Plan
(Full title of the Plans)
- --------------------------------------------------------------------------------
MICHAEL B. CRUTCHER
Senior Vice President
General Counsel and Secretary
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
(502) 585-1100
OGDEN NEWELL & WELCH
Attention: James S. Welch
1700 Citizens Plaza
500 West Jefferson Street
Louisville, Kentucky 40202-2874
(502) 582-1601
(Names, addresses and telephone numbers of agents for service)
Exhibit Index appears on Page 11.
Approximate date of commencement of proposed sale to public:
From time to time following the effectiveness of the Registration Statement.
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
Title of Securities To Title Of Plan Amount Proposed Proposed Amount Of
Be Registered (1) To Be Maximum Maximum Registration
Registered Offering Aggregate Fee
(1) (2) Price Offering
Per Share (3) Price Fee
====================================================================================================================
<S> <C> <C> <C> <C> <C>
Class B Common Brown-Forman 1,100,000 $63.84 $70,224,000 $19,522.27
Stock (non voting) Corporation Savings
par value $0.15 Plan
per share
Class B Common Brown-Forman 50,000 $63.84 $ 3,192,000 $ 887.38
Stock (non voting) Corporation Savings
par value $0.15 Plan for Collectively
per share Bargained Employees
Class B Common Fetzer Vineyards 100,000 $63.84 $ 6,384,000 $ 1,774.75
Stock (non voting) Profit Sharing Plan
par value $0.15
per share
Class B Common Hartmann Employee 100,000 $63.84 $ 6,384,000 $ 1,774.75
Stock (non voting) Savings & Investment
par value $0.15 Plan
per share
Class B Common Lenox Savings Plan 50,000 $63.84 $ 3,192,000 $ 887.38
Stock (non voting) For Collectively
par value $0.15 Bargained Employees
per share
Class B Common Lenox, Incorporated 500,000 $63.84 $31,920,000 $ 8,873.76
Stock (non voting) Employee Savings &
par value $0.15 Investment Plan
per share
Class B Common Lenox Retail Savings 100,000 $63.84 $ 6,384,000 $ 1,774.75
Stock (non voting) and Investment Plan
par value $0.15
per share
====================================================================================================================
</TABLE>
<PAGE> 3
(1) In addition, pursuant to Rule 416(c) of the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plans described herein.
(2) Pursuant to Rule 416(a) of the Securities Act, includes an indeterminate
number of additional shares that may be offered and issued to prevent
dilution resulting from stock splits, stock dividends or similar
transactions.
(3) Estimated solely for purpose of calculating amount of registration fee
which, calculated pursuant to Rule 457(h)(1) and (2) of the Securities Act,
is based on the average of the high and low prices for shares of Class B
Common Stock of Brown-Forman Corporation on the New York Stock Exchange
consolidated tape on March 15, 1999.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*As allowed by Rule 428(b)(1) under the Securities Act and the Note to Part l of
Form S-8, the information specified in Items 1 and 2 of Form S-8 will be
contained in a document sent or given to plan participants. This information is
not filed as part of this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Brown-Forman Corporation (the "Registrant") and each of the Plans, by this
reference hereby incorporate into this Registration Statement the following
documents filed by the Registrant:
(a) Annual Report of the Registrant on Form 10-K for the year ended April 30,
1998, filed on July 17, 1998;
(b) Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter
ended July 31, 1998, filed on September 3, 1998;
(c) Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter
ended October 31, 1998, filed on December 10, 1998;
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(d) Quarterly Report of the Registrant on Form 10-Q for the fiscal quarter
ended January 31, 1999, filed on March 5, 1999;
(e) The description of the Registrant's Class B Common Stock, $0.15 par value
per share, contained in the Registrant's Registration Statement on
Form 8-A, filed on April 11, 1991, including any amendment or report filed
for the purpose of updating such description.
In addition, all documents filed by the Registrant or the Plans with the
Securities and Exchange Commission pursuant to Sections 13(a), 13(d), 14 or
15(d) of the Securities Exchange Act of 1934 after the effective date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and shall be deemed to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein, or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement contained in this Registration Statement shall be deemed to be
modified or superseded to the extent that a statement contained in a
subsequently filed document which is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
One of the directors of the Registrant, James S. Welch, is of counsel to and a
former partner in Ogden Newell & Welch, the Louisville, Kentucky law firm
providing the legal opinion upon the validity of the securities being registered
pursuant to this Registration Statement. Mr. Welch has sole or shared voting and
investment power over 6,600 shares of the Class A Common Stock of the
Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Restated Certificate of Incorporation limits directors'
liability for monetary damages to the extent permitted by the Delaware General
Corporation Law, and reads as follows:
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A director shall not be personally liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except that he
may be liable (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which the director derived an improper personal benefit.
The provision affects only claims against directors for acts they perform as
directors; it does not apply to acts they perform as officers of the Registrant
or in other capacities.
In addition, the Board of Directors has adopted a resolution which provides that
the Registrant shall indemnify any person who was, is, or is threatened to be
made a party to an action, suit, or proceeding, whether civil, criminal,
administrative, or investigative by reason of the fact that he is a director,
officer, employee, or agent of the Registrant, or is or was serving at the
Registrant's request as a director, officer, employee, or agent of another
entity. Indemnification of a person under this resolution is against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the Registrant's best interests (with respect to a
criminal proceeding, the person must have had no reasonable cause to believe his
conduct was unlawful). In any proceeding by or in the right of the Registrant,
no indemnification may be made if the person is found to be liable for
negligence or misconduct in the performance of his duty, and only to the extent
of the Court of Chancery or such other court deems proper.
An insurance policy insures the Registrant's directors and officers against
certain liabilities, including certain liabilities arising under the Act, which
might be incurred by them in such capacities and against which they cannot be
indemnified by the Registrant.
Insofar as indemnification for liabilities under the Act may be permitted to
directors, officers, and controlling persons of the Registrant pursuant to the
foregoing provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of such Registrant in the successful defense of
any action, suit, or proceeding) is asserted against the Registrant by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENTS
- ------ ------------------------
<S> <C>
4(a) Brown-Forman Corporation Savings Plan
4(b) Brown-Forman Corporation Savings Plan for Collectively Bargained
Employees
4(c) Fetzer Vineyards Profit Sharing Plan
4(d) Hartmann Employee Savings and Investment Plan
4(e) Lenox Savings Plan for Collectively Bargained Employees
4(f) Lenox, Incorporated Employee Savings and Investment Plan
4(g) Lenox Retail Savings and Investment Plan
5 Opinion of Counsel, Ogden Newell & Welch, counsel to Registrant
23(a) Consent of PricewaterhouseCoopers LLP, independent
accountants of Registrant
23(b) Consent of Ogden Newell & Welch, counsel to Registrant
(included in Exhibit 5)
24(a) Power of attorney authorizing Steven B. Ratoff, Michael B. Crutcher
or Nelea A. Absher to sign the Registration Statement in any and
all capacities on behalf of Jerry E. Abramson, Barry D. Bramley,
George Garvin Brown III, Owsley Brown II, Donald G. Calder, Owsley
Brown Frazier, Richard P. Mayer, Stephen E. O'Neil, William M.
Street, Dace Brown Stubbs and James S. Welch.
24(b) Certified resolution of Registrant's Board of Directors authorizing
the execution of powers of Attorney.
</TABLE>
The following items were filed previously:
6
<PAGE> 7
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------ -----------------------
<S> <C>
4(h) Restated Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit 3(i)(b) of Registrant's 10-Q,
filed on December 10, 1998
4(i) Certificate of Ownership and Merger of Brown-Forman Corporation into
Brown-Forman, Inc., incorporated by reference to Registrant's 10-K,
filed on July 19, 1994
4(j) Registrant's by-laws, as amended and restated on May 25, 1988,
incorporated by reference to Registrant's 10-K, filed on July 26,
1993, as further amended and currently in effect, incorporated by
reference to Registrant's Current Report on Form 8-K, filed June 3, 1998
4(k) Form of Indenture dated as of March 1, 1994, between the Registrant
and The First National Bank of Chicago, as Trustee, incorporated by
reference to Registrant's Form S-3 (Registration No. 33-52551),
filed on March 8, 1994
</TABLE>
The Registrant has submitted or will submit the Brown-Forman Corporation Savings
Plan, the Brown-Forman Corporation Savings Plan for Collectively Bargained
Employees, the Fetzer Vineyards Profit Sharing Plan, the Hartmann Employee
Savings and Investment Plan, the Lenox Savings Plan for Collectively Bargained
Employees, the Lenox, Incorporated Employee Savings and Investment Plan, and the
Lenox Retail Savings and Investment Plan and any amendments thereto to the
Internal Revenue Service ("IRS") in a timely manner and has made or will make
all changes required by the IRS in order to qualify the plans, as amended.
ITEM 9. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement: (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii)
to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; PROVIDED, HOWEVER, that (i) and (ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8 and the
information required to be included in a post-effective amendment by (i) or
(ii) is contained
7
<PAGE> 8
in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement;
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering; and
(4) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual reports pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. If a director, officer or controlling
person of the Registrant asserts a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) in connection with the
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Brown-Forman Corporation, certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Louisville, Commonwealth
of Kentucky, on March 17, 1999.
8
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BROWN-FORMAN CORPORATION
*By: /s/ Owsley Brown II
---------------------------------
Owsley Brown II
Chairman and Chief Executive Officer
Director
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Steven B. Ratoff Executive Vice President and Chief
- ---------------------------------- Financial Officer (Principal Financial
Steven B. Ratoff Officer and Principal Accounting
Officer)
*Jerry E. Abramson Director
*Barry D. Bramley Director
*George Garvin Brown III Director
*Owsley Brown, II Director
*Donald G. Calder Director
*Owsley Brown Frazier Director
*Richard P. Mayer Director
*Stephen E. O'Neil Director
*William M. Street Director
*Dace Brown Stubbs Director
*James S. Welch Director
*By: /s/ Nelea A. Absher
------------------------------
Nelea A. Absher
Assistant Vice President and Assistant Secretary
Attorney-In-Fact For Each
March 17, 1999
</TABLE>
9
<PAGE> 10
THE PLANS. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, in the City of Louisville, Commonwealth of Kentucky, on March 17,
1999.
BROWN-FORMAN CORPORATION SAVINGS PLAN
BROWN-FORMAN CORPORATION SAVINGS PLAN FOR COLLECTIVELY BARGAINED
EMPLOYEES
FETZER VINEYARDS PROFIT SHARING PLAN
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
LENOX SAVINGS PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
LENOX, INCORPORATED EMPLOYEE SAVINGS AND INVESTMENT PLAN
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
By: /s/ Milton B. Gillis
-----------------------------------------------------
Milton B. Gillis, Vice President and Member of
Brown-Forman Corporation Employee Benefits Committee,
Plan Administrator for the Plans
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
4(a) Brown-Forman Corporation Savings Plan*
4(b) Brown-Forman Corporation Savings Plan for Collectively
Bargained Employees*
4(c) Fetzer Vineyards Profit Sharing Plan*
4(d) Hartmann Employee Savings and Investment Plan*
4(e) Lenox Savings Plan for Collectively Bargained Employees*
4(f) Lenox, Incorporated Employees Savings and Investment Plan*
4(g) Lenox Retail Savings and Investment Plan*
5 Opinion of Counsel, Ogden Newell & Welch*
23(a) Consent of PricewaterhouseCoopers LLP, independent
accountants of Registrant*
23(b) Consent of Ogden Newell & Welch, counsel to Registrant
(included in Exhibit 5)*
24(a) Power of attorney authorizing Nelea A. Absher, Steven B. Ratoff
or Michael B. Crutcher to sign the Registration Statement in any
and all capacities on behalf of Jerry E. Abramson, Barry D.
Bramley, Geo. Garvin Brown III, Owsley Brown II, Donald G.
Calder, Owsley Brown Frazier, Richard P. Mayer, Stephen E.
O'Neil, William M. Street, Dace Brown Stubbs and James S. Welch*
24(b) Certified resolution of Registrant's Board of Directors
authorizing the execution of powers of attorney*
</TABLE>
*Filed electronically herewith.
11
<PAGE> 1
EXHIBIT 4(a)
BROWN-FORMAN CORPORATION SAVINGS PLAN
PLAN NO.: 006
EIN: 61-0143150
<PAGE> 2
BROWN-FORMAN CORPORATION SAVINGS PLAN
By action of the Board of Directors, Brown-Forman Corporation, a
Delaware corporation (Employer), adopted a profit sharing plan (Prior Plan) with
matching contributions made by the Employer, effective July 1, 1983. Effective
July 1, 1988, the Employer adopted a revision of the Prior Plan.
Effective January 1, 1989 (Effective Date), except as otherwise
provided, the Employer adopted the following plan, an amendment and restatement
of the Prior Plan, which shall hereafter be known as Brown-Forman Corporation
Savings Plan (Plan). The Plan is established to recognize and reward employees
for their contribution to the Employer's successful operation, and is for the
exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
BROWN-FORMAN CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS........................................................1
1.01 Accounts..........................................................1
1.02 Accounting Date...................................................2
1.03 Affiliated Employer...............................................2
1.04 Beneficiary.......................................................2
1.05 Break in Service..................................................2
1.06 Code..............................................................3
1.07 Compensation......................................................3
1.08 Elapsed Time......................................................4
1.09 Employee..........................................................5
1.10 Employer..........................................................5
1.11 Fiscal Year.......................................................6
1.12 Highly Compensated Employee.......................................6
1.13 Hour of Service...................................................7
1.14 Leased Employee...................................................8
1.15 Month of Service..................................................8
1.16 Normal Retirement Age.............................................9
1.17 Period of Severance...............................................9
1.18 Plan Year.........................................................9
1.19 Spouse (Surviving Spouse).........................................9
1.20 Total and Permanent Disability....................................9
1.21 Year of Service..................................................10
ARTICLE II - PARTICIPATION....................................................11
2.01 Eligibility......................................................11
2.02 Reemployment of Participant......................................11
2.03 Reemployment of Non-Participant..................................11
2.04 Transferred Employees............................................11
2.05 Employment Status Change.........................................11
2.06 Participation Following Normal Retirement Age....................12
ARTICLE III - VESTING ........................................................13
3.01 Fully Vested and Nonforfeitable Accounts.........................13
3.02 Vesting of Other Accounts........................................13
3.03 Period of Service for Vesting Purposes...........................13
3.04 Vesting Schedule/Employer Matching Contribution Account
and Flexible Savings Account.....................................13
3.05 Vesting Schedule/CORE Account....................................13
3.06 Effect of Break in Service on Vesting............................14
3.07 Date of Termination of Employment................................15
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination...15
3.09 Amendment of Vesting Schedule....................................15
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IV - TIME AND MANNER OF PAYMENT.......................................16
4.01 Time of Initial Payment of Retirement Benefits....................16
4.02 Consent To Payment Of Benefits....................................16
4.03 Manner of Payment of Retirement Benefits..........................17
4.04 Payment Upon Death of Participant.................................17
4.05 Calculation of Distributions......................................17
4.06 Forfeiture of Non-vested Benefits.................................18
4.07 Fully Vested Account..............................................20
4.08 Suspension of Benefits............................................20
4.09 Pre-1984 Election.................................................20
4.10 Hardship Distribution.............................................21
4.11 Limitation for Qualified Domestic Relations Order.................22
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER.....................................23
5.01 Nonelective Contribution by Employer..............................23
5.02 Elective Contribution by Employer.................................23
5.03 Matching Contribution by Employer.................................23
5.04 Deduction of Employer Contributions...............................23
5.05 Limits on Elective and Matching Contributions.....................24
5.06 Special Employer Contributions....................................25
5.07 Correction of Excess Elective Contributions.......................26
5.08 Correction of Excess Employer Matching Contributions and
Voluntary Contributions...........................................27
5.09 Return of Contribution. .........................................27
5.10 Plan and Trust Conditioned on Approval and Qualification..........28
5.11 Funding Policy....................................................28
ARTICLE VI - PARTICIPANT CONTRIBUTIONS........................................29
6.01 Amount of Elective Contribution...................................29
6.02 Election Request..................................................29
6.03 Change of Rate....................................................29
6.04 Distributions from Elective Account...............................29
6.05 Voluntary Contributions...........................................30
6.06 Withdrawal from Voluntary Contribution Account....................30
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS...........................31
7.01 Allocation of Nonelective Employer Contribution...................31
7.02 Allocation of Elective Contributions..............................31
7.03 Allocation of Matching Contribution...............................31
7.04 Allocation of Forfeitures.........................................31
7.05 Amendment of Allocation Eligibility...............................31
7.06 Maximum Additions to Participant's Account........................32
7.07 Overall Limit.....................................................34
7.08 Date of Allocation to Accounts....................................35
7.09 Expenses of Plan..................................................35
7.10 Participant Direction of Investment...............................35
7.11 Periodic Adjustments to Account...................................36
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VIII - TOP HEAVY PROVISIONS...........................................38
8.01 When Provisions Effective.........................................38
8.02 Determination of Top Heavy........................................38
8.03 Top Heavy Vesting Schedule........................................39
8.04 Compensation Limitation...........................................39
8.05 Minimum Benefits..................................................39
8.06 Impact on Maximum Benefits........................................39
8.07 Determination of Super Top Heavy..................................40
ARTICLE IX - PORTABILITY OF ACCOUNT...........................................41
9.01 Transfers to Another Qualified Plan...............................41
9.02 Eligible Rollover Distributions...................................41
9.03 Transfers to this Plan............................................42
ARTICLE X - PARTICIPATING EMPLOYERS...........................................43
10.01 Adoption by Other Employers.......................................43
10.02 Withdrawal from the Plan..........................................43
10.03 Action of a Single Employer.......................................43
ARTICLE XI - PLAN ADMINISTRATOR...............................................44
11.01 Appointment of Plan Administrator.................................44
11.02 Duties of Plan Administrator......................................44
11.03 Decisions of Plan Administrator and Indemnification...............45
11.04 Instructions to Trustee...........................................45
11.05 Claims Procedure..................................................45
11.06 Delegating Responsibility.........................................45
ARTICLE XII - MISCELLANEOUS...................................................47
12.01 Right to Terminate................................................47
12.02 Plan Voluntary on Part of Employer................................47
12.03 Benefits Not Subject to Creditors' Claim..........................47
12.04 Trust Agreement...................................................47
12.05 Assets for Exclusive Benefits to Participants.....................47
12.06 Nonguarantee of Employment........................................48
12.07 Amendment.........................................................48
12.08 Acts by Trustee...................................................48
12.09 Laws of Kentucky. ...............................................48
12.10 Distribution to Minor or Incompetent Beneficiary..................48
12.11 Construction......................................................48
12.12 Merger or Consolidation...........................................48
12.13 Discretionary Action..............................................49
12.14 Lost Beneficiaries; Escheat.......................................49
12.15 Action by the Employer............................................49
ARTICLE XIII - SIGNATURES.....................................................50
</TABLE>
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ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate
Account established and maintained on behalf of a Participant to which shall be
credited the Participant's share of Employer Matching Contributions and the
share of the net gains or losses of the Trust attributable to such
contributions. The Employer Matching Contribution Account shall be subject to
the vesting provisions of Article III.
(c) Voluntary Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the nondeductible Voluntary Contributions arising only from any
recharacterization of Elective Contributions pursuant to Section 5.07, and the
share of the net gains or losses of the Trust attributable to said Voluntary
Contributions. The Voluntary Contribution Account shall be fully vested and
nonforfeitable at all times.
(d) Flexible Benefit Account. The separate Account established
and maintained on behalf of a Participant under the Employer's Flexible Benefit
Plan.
(e) Flexible Savings Account. The separate Account established
and maintained on behalf of a Participant to which shall be credited the balance
in the Participant's Flexible Benefit Account designated for contribution to the
Plan as of the later of the first day of the Plan Year, or the participant's
entry date for participation in the Plan, and the share of net gains or losses
of the Trust Fund attributable to such contributions. The Flexible Savings
Account shall be subject to the vesting provisions of Article III.
(f) Company Retirement ("CORE") Account. The separate Account
established and maintained on behalf of a Participant who is an employee of B/F
Travel, to which shall be credited the Nonelective Contributions provided under
Section 5.01, and the share of the net gains or losses of the Trust Fund
attributable to such contributions. The CORE Account shall be subject to the
vesting provisions of Article III.
1
<PAGE> 7
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, the Accounting Date shall be December 31. Effective as soon as
administratively practicable after January 1, 1992, account valuations shall be
performed on a daily basis.
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
2
<PAGE> 8
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) payments made in lieu of Brown-Forman Corporation
Supplemental Excess Retirement Plan benefits; and
3
<PAGE> 9
(d) any payments under a nonqualified deferred compensation
plan.
Compensation in excess of $200,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d). If the aggregate Compensation of the "Family Group"
exceeds $200,000, (as indexed), the Compensation considered under the Plan for
each Family Group member is proportionately reduced so the total equals $200,000
(as indexed) (except for purposes of determining the portion of Compensation up
to the integration level, if this Plan provides for permitted disparity).
"Family Group" includes a Participant who owns more than 5% interest in any
entity comprising the Employer or is one of ten Highly Compensated Employees
paid the greatest Compensation during the Plan Year, and the Participant's
Spouse or children under age 19 (who are Participants at the close of the period
used to compute Compensation). For Plan Years beginning before January 1, 1989,
the $200,000 limit (without regard to family aggregation) shall apply only for
Top Heavy Plan Years and shall not be adjusted.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.07) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
4
<PAGE> 10
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.09 Employee. Salaried employees of Brown-Forman Corporation; salaried
employees of Brown-Forman Corporation Beverages Worldwide; all persons employed
by Jack Daniel Distillery, Lem Motlow, Prop., Inc.; Jack Daniel Distillery, Lem
Motlow, Prop.; Mt. Eagle Corporation; Thoroughbred Plastics Corporation;
Nature's Catch through November 4, 1994; B/F Travel effective April 1, 1991.
Employee shall include any Leased Employee. However, the term Employee excludes
the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided that (i) retirement benefits
were the subject of good faith bargaining between the employee
representatives and the Employer; and (ii) the collective bargaining
agreement does not expressly provide that the employee is eligible for
initial or continued participation in the Plan; and
(b) any person employed as an independent contractor;
(c) an employee employed outside the United States, unless the
Plan Administrator, under uniform rules, approves the participation of
an employee at a foreign location; and
(d) an employee of a business entity acquired by the Employer
or its Affiliated Employers on or after July 25, 1985, unless specifically
approved by the Executive Committee of the Board of Directors of Brown-Forman
Corporation.
1.10 Employer. Brown-Forman Corporation or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Notwithstanding any other provisions of this Section, any business
entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired
5
<PAGE> 11
by the Employer or its Affiliated Employers that was not participating in the
Prior Plan on January 1, 1990, may adopt this Plan for its employees and become
an adopting Employer only after the Executive Committee of the Board of
Directors of Brown-Forman Corporation approves its participation and the
conditions set out in Section 10.01 are met. Until the requirements of the
preceding sentence are satisfied, none of such entity's employees are eligible
to participate in this Plan.
1.11 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.12 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to section 415(d) of the Code); (ii) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received Compensation during such year that is
greater than 50 percent of the dollar limitation in effect under section
415(b)(1)(A) of the Code. The term highly compensated employee also includes:
(i) employees who are both described in the preceding sentence if the term
"determination Year is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
employer during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former employee or
a highly compensated employee who is one of the 10 most highly compensated
employees who is ranked on the basis of Compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and
6
<PAGE> 12
contributions or benefits of the family member and 5 percent owner or top-ten
highly compensated employee. For purposes of this section, family member
includes the spouse, lineal ascendants and descendants of the employee or former
employee and the spouses of such lineal ascendants and descendants.
1.13 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hour of
Service is credited no more than once to a single Employee, even though it may
fall within more than one of categories (i), (ii) and (iii) of the preceding
sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's compensation, or unemployment compensation or
disability insurance laws; (iii) Hours of Service are not credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee; and (iv) Hours of Service are not credited to an
Employee for payments made by this Plan or any other pension or profit sharing
plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with
(i) ten (10) Hours of Service for each day for which the
Employee is required to be credited with at least one
(1) Hour of Service under this Section;
(ii) forty-five (45) Hours of Service for each week for
which the Employee is required to be credited with at
least one (1) Hour of Service under this Section; or
7
<PAGE> 13
(iii) hours Worked, as defined in Labor Regulation Section
2530.200b-3(d)(3)(i) in which 870 Hours Worked are
equivalent to 1,000 Hours of Service, and 435 Hours
Worked are equivalent to 500 Hours of Service; or
(iv) hours of Service determined on the basis of periods
of employment which are the payroll periods
applicable to the Employee. An Employee is credited
with Hours of Service, determined in accordance with
the following table, for each payroll period in which
the Employee actually has at least one (1) Hour of
Service:
<TABLE>
<CAPTION>
PAYROLL PERIOD HOURS OF SERVICE CREDITED
-------------- -------------------------
<S> <C>
weekly 45
semi-monthly 95
monthly 190
</TABLE>
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.14 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
8
<PAGE> 14
1.15 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.16 Normal Retirement Age. A Participant's 65th birthday.
1.17 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.18 Plan Year. January 1 to December 31, the accounting year of the
Plan.
1.19 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.20 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
9
<PAGE> 15
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury; or
(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
1.21 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three hundred sixty-five (365) day period of
service. An Employee will receive credit for the aggregate of all Years of
Service commencing with the Employee's first day of employment and ending on the
date a Break in Service begins.
Subject to the Break in Service provisions of Section 1.05, the Elapsed
Time provisions of Section 1.08, the Hours of Service provisions of Section 1.13
and the Period of Severance provisions of Section 1.17, employees of B/F Travel
are credited with Service for eligibility and vesting purposes for all Years of
Service with B/F Travel from the date of commencement of employment with B/F
Travel.
10
<PAGE> 16
ARTICLE II - PARTICIPATION
2.01 Eligibility. Upon filing an application with the Employer, an
Employee becomes a Participant as of the first day of the month coinciding with
or next following the date the Employee completes a Year of Service with the
Employer.
Participants in the Prior Plan (as of the Effective Date of this Plan)
are not excluded from this Plan because of the requirements of this Section.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.10 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
11
<PAGE> 17
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
12
<PAGE> 18
ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Accounts. A Participant's Elective
Contribution Account and Voluntary Contribution Account are fully vested at all
times.
3.02 Vesting of Other Accounts. A Participant's Employer Matching
Contribution Account, Flexible Savings Account, and CORE Account are fully
vested upon the first of the following events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Prior Plan on January 1, 1990, shall be deemed to be service
with the Employer will be determined by the Executive Committee of the Board of
Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account and
Flexible Savings Account. The vested portion of a Participant's Employer
Matching Contribution Account and Flexible Savings Account prior to the
occurrence of an event stated in Section 3.02 is a percentage of such Account
determined on the basis of Years of Service according to the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- ----------------
<S> <C>
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
</TABLE>
3.05 Vesting Schedule/CORE Account. The vested portion of a
Participant's CORE Account prior to the occurrence of an event stated in Section
3.02 is a percentage of such Account determined on the basis of Years of Service
according to the following schedule:
13
<PAGE> 19
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- ----------------
<S> <C>
Less than 5 years 0%
5 years or more 100%
</TABLE>
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If
a terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service (only a single Break in Service applies, if completed
prior to the first day of the first Plan Year in 1985), all post-break
service will be disregarded in determining the vested percentage of
such Participant's Account which accrued prior to the break. However,
all Years of Service (both pre-break and post-break) will count for
purposes of vesting the Participant's Account which accrues after the
break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), all service after the break is disregarded in determining the
vested percentage of the Participant's Account that accrued prior to
the break. Further, such Participant's pre-break service counts for
purposes of determining the vested percentage of the Participant's
Account which accrues after the break only if upon reemployment the
number of consecutive Breaks in Service is less than the aggregate
number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
Service earned prior to the first day of the first Plan Year
in 1985 is disregarded if the minimum participation and minimum vesting
rules then in effect did not require service to be taken into account.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
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3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change. However, for Plan Years
beginning before January 1, 1989, or with respect to Employees who do not
complete one Hour of Service in a Plan Year beginning after December 31, 1988,
"5 years" shall be substituted for "3 years" in the preceding sentence.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan Administrator.
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ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of
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<PAGE> 22
Normal Retirement Age or age 62. Absent such Participant's consent to receive
benefits in excess of $3,500, distribution of benefits shall begin no sooner
than the later of age 62 or Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required
to be distributed for each calendar year, beginning
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<PAGE> 23
with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount available
for distribution is paid within the life expectancy of the
Participant.
(iii) For calendar years beginning after December 31,
1988, the amount to be distributed each year shall not be less
than the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life expectancy or
(2) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant
shall be distributed using the applicable life expectancy in
subsection (i) above as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(v) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case
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<PAGE> 24
of any Participant who has incurred five (5) or more consecutive
Breaks in Service (Five Year Break in Service) prior to the resumption
of employment with the Employer, the non-vested portion of such
terminated Participant's benefits, and all regular periodic
adjustments thereto, shall be deemed forfeited and shall be used to
reduce the Employer's contribution for the Plan Year within which the
fifth Break in Service occurs. Upon such forfeiture, such terminated
Participant's Account shall be closed and if the vested Account
balance has not been paid to the Participant, the vested portion of
such Account shall be transferred to a separate Fully Vested Account
for such terminated Participant's benefit; provided, however, at such
time as the terminated Participant resumes employment with the
Employer, an additional separate Account shall be established for the
Participant's benefit as if the Participant were a new Participant,
which Account shall be maintained separate and distinct from the
Participant's Fully Vested Account, until such Account becomes fully
vested at which time the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be allocated
as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as though
a Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account
balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's reemployment;
provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the Participant
is completed by the earlier of: (1) the last day of the Plan
Year within which the Participant has five consecutive Breaks
in Service or (2) five years after the Participant is
reemployed by the Employer. If a terminated Participant incurs
five consecutive Breaks in Service, repayment will not be
permitted.
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<PAGE> 25
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if previously
forfeited shall be reinstated (in cash or in kind as initially
forfeited) to constitute the opening balance of such
Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Restoration
of a forfeiture pursuant to this subsection (e) shall in all events be
completed by the Accounting Date of the Plan Year next following the
Plan Year within which the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
4.09 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982, and if the Participant filed such election in a timely manner with the
Plan Administrator, said election shall be effective unless and until revoked by
the Participant. If an election is revoked any subsequent distributions must
meet the requirements of this Article IV.
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4.10 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for the CORE Account, any Special Employer
Contributions, and earnings credited to the Participant's Elective
Account after December 31, 1988) of an amount necessary to satisfy the
Participant's immediate and heavy financial need where the Participant
lacks other available resources on account of:
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household or
other dependant,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(ii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iii) The distribution shall not exceed the amount of
the financial need.
(iv) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
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(v) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.11 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may be
charged against and paid from the Accounts of the Participant named in the
order.
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<PAGE> 28
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Nonelective Contribution by Employer. For the Plan Year ending
December 31, 1991 and each Plan Year thereafter, the Employer shall contribute
to the Trust a Nonelective Contribution on behalf of each Participant who is an
Employee of B/F Travel and has completed one Year of Service. The amount of the
Nonelective Contribution is equal to three and one-half percent (3 1/2%) of the
Compensation earned by the Participant during the Plan Year. The nonelective
contributions made pursuant to this Section are credited to the Participant's
Company Retirement (CORE) Account in accordance with Section 7.01.
For each Plan Year, the Employer shall also contribute to the Trust an
amount equal to the account balance in the Flexible Benefit Account of each
Participant designated for contribution to this Plan on the later of the first
day of the Plan Year or the date during the Plan Year on which the participant
is first eligible to participate in this Plan. The Employer Nonelective
Contributions made pursuant to this Section are credited to the Participant's
Flexible Savings Account in accordance with Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. Through March
31, 1994, the amount of the Matching Contribution shall be equal to 50% of the
Participant's Compensation deferred up to a maximum of 2 1/2% of Compensation.
Effective April 1, 1994, the amount of the Matching Contribution shall be equal
to 70% of the first 2% of a Participant's Compensation deferred and 60% of the
next 3% of a Participant's Compensation deferred. Effective April 1, 1995, the
amount of the Matching Contribution shall be equal to 85% of the first 2% of a
Participant's Compensation deferred and 70% of the next 3% of a Participant's
Compensation deferred. Effective April 1, 1996 and each year thereafter, the
amount of the Matching Contribution shall be equal to 100% of the first 2% of a
Participant's Compensation deferred and 75% of the next 3% of a Participant's
Compensation deferred. However, in applying the foregoing matching percentages
effective April 1, 1994, only Participant Elective Contributions up to 5% of
Compensation shall be considered. The Matching Contribution shall be credited to
the Employer Matching Contribution Account of eligible Participants in
accordance with Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the Employer provided the return is
accomplished within one (1) year after the disallowance of the deduction.
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<PAGE> 29
5.05 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
For Plan Years beginning after December 31, 1988, to prevent the
multiple use of the tests in this subsection (b), if a Highly Compensated
Participant is eligible to make elective deferrals pursuant to any cash or
deferred arrangement maintained by the Employer or an Affiliated Employer, or to
make Employee contributions or receive matching contributions under this or any
other plan maintained by the Employer or an Affiliated Employer, such
Participant's Actual Contribution Percentage shall be reduced pursuant to
Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year by the
Participant's Compensation for such Plan Year. The ADP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ADPs of each eligible Participant in the group, calculated to the
nearest one-hundredth of one percent. Elective Contributions allocated to
non-Highly Compensated Participants shall not include Excess Deferrals
(determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions and Voluntary Contributions
(including Excess Contributions recharacterized as Voluntary Contributions) for
the Plan Year by the Participant's Compensation for such Plan Year. The ACP for
each group ((i) Highly Compensated Employees and (ii) non-Highly Compensated
Employees) is the average of the ACPs of each eligible Participant in the group
calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
For purposes of determining the ADP and ACP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated Employees,
the Elective Contributions, Matching Contributions, Voluntary Contributions and
Compensation of such Participant shall include the Elective Contributions,
Matching Contribution, Voluntary Contribution and Compensation of "family
members" (as defined in Code section 414(q)(6)), and the family group
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<PAGE> 30
shall be treated as one Highly Compensated Participant. Family members shall be
disregarded for purposes of determining the ADP and ACP of the group of
non-Highly Compensated Participants.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions, Matching Contributions or Voluntary Contributions are made, such
contributions on behalf of such Highly Compensated Participant shall be
aggregated in determining the ADP and ACP of such Participant. For Plan Years
beginning after December 31, 1988, if the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated to satisfy Code section 401(k) and 401(m) only if they
have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.05.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
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Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.03. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.05, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining nondiscrimination tests.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.05, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest ADP such Participant's excess amounts ("Excess Contributions") and
income allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ADP equals
the ADP of the Highly Compensated Participant having the second highest ADP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Contributions for a Highly Compensated Participant is then
equal to the total of elective and other contributions taken into account for
the ADP test, minus the product of the employee's ADP (as determined after
application of this Section) and the employee's compensation used in determining
that ratio. The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by any previous distribution of Excess
Deferrals (pursuant to Section 6.01) for the employee's taxable year ending in
the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be: (i) distributed to the Participant, and/or (ii)
recharacterized as an amount distributed to the Participant and contributed to
the Plan as a Voluntary Contribution. Distribution may be postponed but not
later than the close of the Plan Year following the Plan Year in which the
Excess Contribution was allocable; however, if the Excess Contributions are not
corrected within two and one-half months after the Plan Year end, a 10% excise
tax will be imposed on the Employer on such amounts. Recharacterization may be
combined with distribution to correct Excess Contributions. The Employer shall
designate the distribution/recharacterization as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution and/or recharacterization shall be made first from
unmatched Elective Contributions, and then simultaneously from matched Elective
Contributions and Matching Contributions which relate to such Elective
Contributions. However, any such Matching Contributions which are not vested
shall be forfeited in lieu of distribution.
For purposes of applying the Top Heavy rules, recharacterized Excess
Contributions shall continue to be treated as Elective Contributions. Amounts
recharacterized shall continue to be subject to the nonforfeitability
requirements and distribution restrictions that apply to Elective Contributions.
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<PAGE> 32
Correction of Excess Contributions of a Highly Compensated Participant
whose ADP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(k)-1(f)(5)(ii).
5.08 Correction of Excess Employer Matching Contributions and Voluntary
Contributions. If the amount of Matching Contributions or Voluntary
Contributions allocated to the group of Highly Compensated Participants exceeds
the nondiscrimination tests specified in Section 5.05, the Plan Administrator
shall distribute to the Highly Compensated Participant having the highest ACP
such Participant's excess amounts ("Excess Aggregate Contributions") and income
allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ACP equals
the ACP of the Highly Compensated Participant having the second highest ACP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Aggregate Contributions for a Highly Compensated Employee is
then equal to the total of voluntary, matching and other contributions taken
into account for the ACP test, minus the product of the Employee's ACP (as
determined after application of this Section) and the Employee's Compensation
used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
The determination of Excess Aggregate Contributions for any Plan Year
shall be made after first determining the amount of any Excess Contributions to
be recharacterized as Voluntary Contributions for the Plan Year of the Plan
subject to Code section 401(k) ending with or within the Plan Year of this Plan.
Correction of Excess Aggregate Contributions of a Highly Compensated Participant
whose ACP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(m)-1(e)(2)(iii).
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<PAGE> 33
5.09 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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<PAGE> 34
ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two percent (2%) and ten percent (10%) (in increments
of 1%) of the Participant's Compensation for the Plan Year in question, but
shall not exceed a dollar amount as adjusted pursuant to the method provided in
Code section 415(d) for the Participant's taxable year. The Plan Administrator
may fix lower maximums for Highly Compensated Employees to satisfy the
nondiscrimination tests of Section 5.05.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.07 for the Plan
Year beginning within the Participant's taxable year.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any other time mutually
agreeable between the Employer and the Participant, provided that all
Participants under similar circumstances are treated alike.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, or separation from service;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such
29
<PAGE> 35
corporation if the Participant continues employment with the
corporation acquiring such assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to
Section 4.10; or
(vi) pursuant to Sections 6.01 and 5.07.
6.05 Voluntary Contributions. Voluntary contributions are permitted to
the extent such contributions are excess contributions recharacterized as
voluntary contributions in accordance with Section 5.07.
6.06 Withdrawal from Voluntary Contribution Account. Any withdrawal
from the Participant's Voluntary Contribution Account is subject to the
distribution rules provided in Section 6.04.
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<PAGE> 36
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Nonelective Employer Contribution. Each Plan Year
the Nonelective Employer Contribution shall be allocated to the CORE Accounts of
all eligible Participants of B/F Travel who have completed one Year of Service
during the Plan Year in the same manner as the contribution is determined
pursuant to Section 5.01. Further, each Plan Year the Nonelective Employer
Contributions shall be allocated to the Flexible Savings Accounts of all
eligible Participants in the same manner as the contribution is determined
pursuant to Section 5.01.
7.02 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.03.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.05 Amendment of Allocation Eligibility. Notwithstanding anything to
the contrary, for Plan Years beginning after December 31, 1989, if this is a
Plan that would otherwise fail to meet the requirements of Code sections
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules shall
apply:
(a) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include
the minimum number of Participants who would not otherwise be eligible
as are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of this
paragraph shall be those who are actively employed on the last day of
the Plan Year and, when compared to similarly situated Participants,
have completed the greatest number of Hours of Service in the Plan
Year.
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<PAGE> 37
(b) If after application of paragraph (a) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and forfeitures for
the Plan Year shall be further expanded to include the minimum number
of Participants who are not actively employed on the last day of the
Plan Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
(c) Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
7.06 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
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<PAGE> 38
(a) Return any elective contributions and/or any voluntary
contributions credited for the Limitation Year to the extent the return
would reduce the excess amount in the Participant's Accounts;
(b) Hold any remaining excess after the return of elective
and/or voluntary contributions in the Participant's Account to be used
to reduce Employer contributions in the next Limitation Year and
succeeding years if necessary;
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any Employer
or Employee contributions may be made to the Plan for that Limitation
Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
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<PAGE> 39
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
For Limitation Years beginning after December 31, 1988, compensation
shall be limited to $200,000 as adjusted in the same manner as permitted under
Code section 415(d).
7.07 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Participant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction for
any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(1)(2) of the Code
maintained by the employer); and the denominator of which is the sum of
the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a
34
<PAGE> 40
defined contribution plan was maintained by the Employer): (a) 1.25
multiplied by the dollar limitation determined under Code section
415(b) and (d) in effect under Code section 415(c)(1)(A), or (b) 35
percent of the Participant's compensation for such year.
If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. the adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
7.08 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.09 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.10 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will
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<PAGE> 41
accept direction from each Participant on a written election form (or other
written agreement), as a part of this Plan containing such conditions,
limitations and other provisions the parties deem appropriate. The Trustee or,
with the Trustee's consent, the Plan Administrator, may establish written
procedures, incorporated specifically as part of this Plan, relating to
Participant direction of investment under this Section 7.10.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.11 Periodic Adjustments to Account. The Account(s) held in trust for
the benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
(i) The fair market value of the Trust on the
current Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting Date,
less
(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's
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<PAGE> 42
Voluntary Contribution Account shall also include the amount of any
voluntary contributions made by the Participant after such Accounting
Date): provided, however, if the Plan Administrator directs payment of
a Participant's Accounts in any manner other than a single payment to
be made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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<PAGE> 44
Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Top Heavy Vesting Schedule. If the Plan becomes Top Heavy, a
Participant's vested interest in such Participant's CORE Account shall be
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 3 years 0%
3 years or more 100%
</TABLE>
8.04 Compensation Limitation. For Plan Years beginning prior to January
1, 1989 in which the Plan is a Top Heavy Plan, Compensation shall be limited to
$200,000 for purposes of this Article.
8.05 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.06 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
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<PAGE> 45
(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.05;
(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.05.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.07 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. This section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former
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<PAGE> 47
employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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<PAGE> 48
ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown-Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by action
of its governing authority, may withdraw from the Plan after giving 90 days
advance notice to the Board of Directors of Brown-Forman Corporation, provided
the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
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<PAGE> 49
ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
44
<PAGE> 50
(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
11.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
11.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any
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<PAGE> 51
such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The Trustee
shall have the right, in its sole discretion, by written instrument delivered
to the Plan Administrator, to reject and to refuse to exercise any such
delegated authority.
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<PAGE> 52
ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is made a part hereof. The Trust and any income
therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used for purposes other than for the
exclusive benefit of the Participants or their Beneficiaries at any time prior
to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries under the Trust.
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<PAGE> 53
12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
If this Plan replaces a defined contribution plan which provided for
Early Retirement Benefits, the provisions of the prior plan relating to Early
Retirement shall govern for any Participant who was a Participant of the prior
plan and who satisfied the requirements for Early Retirement in the prior plan
as of the date of adoption of this Plan.
12.08 Acts by Trustee. The Employer shall not be responsible for any of
the acts of the Trustee.
12.09 Laws of Kentucky. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the laws of Kentucky, to the
extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
12.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
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<PAGE> 54
12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
49
<PAGE> 55
ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 22nd day of December, 1994.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
-----------------------------------
MILTON B. GILLIS, Vice President
50
<PAGE> 56
CORRECTIVE AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to correctively amend the Plan in accordance with
Resolutions of the Employer adopted on November 14, 1994.
IT IS THEREFORE AGREED:
1. The first paragraph of Section 5.01 of Article V is corrected to
read as follows:
5.01 Nonelective Contribution by Employer. For the Plan Year ending
December 31, 1991 and each Plan Year thereafter, the Employer
shall contribute to the Trust a Nonelective Contribution on
behalf of each Participant who is an Employee of B/F Travel and
has completed one Year of Service. The amount of the Nonelective
Contribution is equal to three and one-half percent (3 1/2%) of
the Compensation earned by the Participant during the Plan Year.
The nonelective contributions made pursuant to this Section are
credited to the Participant's Company Retirement (CORE) Account in
accordance with Section 7.01. The nonelective contributions made
pursuant to this Section shall cease as of January 1, 1995.
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
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<PAGE> 57
IN WITNESS WHEREOF, the Employer has caused this Corrective Amendment
to the Brown-Forman Corporation Savings Plan to be executed by its duly
authorized officer this 24th day of March, 1995, effective for the fiscal year
beginning January 1, 1995.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
---------------------------------
MILTON B. GILLIS, Vice President
2
<PAGE> 58
FIRST AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 5.06, Special Employer Contributions, of Article V is
amended by adding the following additional sentence to the final paragraph of
the section:
Further, the contributions shall satisfy the nondiscrimination
requirements in accordance with Regulation 1.401(k)-1(b)(5) and
Regulation 1.401(m)-1(b)(5), incorporated herein by reference.
2. Section 5.07, Correction of Excess Elective Contributions, of
Article V is amended to delete all references to recharacterization of excess
contributions as voluntary contributions as the Plan no longer allows such
voluntary contributions.
3. Section 6.05, Voluntary Contributions, is amended in its entirety to
read as follows:
6.05 Voluntary Contributions. For the Plan Year beginning
January 1, 1989, voluntary contributions are no longer permitted.
Any voluntary contributions made prior to that date shall be
maintained in the Participant's Voluntary Contributions Account.
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
1
<PAGE> 59
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Brown- Forman Corporation Savings Plan to be executed by its duly authorized
officer this 11th day of July, 1996, effective January 1, 1989.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
---------------------------------
MILTON B. GILLIS, Vice President
2
<PAGE> 60
SECOND AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.01(e) of Article I shall be amended in its entirety to
change the name of the Flexible Spending Account to the Employer Nonelective
Contribution Account, said section to read as follows:
(e) Employer Nonelective Contribution Account. The
separate Account established and maintained on behalf of a
Participant to which shall be credited the balance in the
Participant's Flexible Benefit Account and the contributions
allocated to the Participant under Section 5.01(b), and the
share of net gains or losses of the Trust Fund attributable to
such contributions. The Employer Nonelective Contribution
Account shall be subject to the vesting provisions of Article
III.
2. Section 3.04, Vesting Schedule, of Article III is amended by
changing all references to "Flexible Savings Account" to "Employer Nonelective
Contribution Account."
3. Section 5.01, Nonelective Contribution by Employer, of Article V is
amended effective January 1, 1997, by designating the first paragraph as
subparagraph (a) and by deleting the second paragraph of the section and
replacing it as follows:
(b) For each Plan Year, the Employer shall contribute
to the Trust an employer contribution on behalf of each
Participant in an amount equal to the greater of:
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<PAGE> 61
(1) One (1%) percent of the said Participant's
Compensation for the 12-month period preceding the
date participation commences and thereafter at
December 31 of the preceding Plan Year; or
(2) $500 times a fraction, the numerator of which is
Hours of Service up to 1,950 in the 12-month period
preceding the date participation commences and
thereafter for the preceding Plan Year, and the
denominator of which is 1,950, with a maximum of $500
in any Plan Year. For those Participants who are
employees of Jack Daniel Distillery, Lem Motlow,
Prop., Inc. and Jack Daniel Distillery, Lem Motlow,
Prop., the proration shall not apply, this paragraph
(2) to read:
(2) $500.
Said contribution shall be allocated to Participant's Employer
Nonelective Contribution Account as soon as administratively
feasible after the later of the first day of the Plan Year or
the date during the Plan Year on which the Participant is
first eligible to participate in this Plan.
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Brown- Forman Corporation Savings Plan to be executed by its duly authorized
officer this 13th day of March, 1997, effective January 1, 1997.
BROWN-FORMAN CORPORATION
By: /s/ Russell C. Buzby
-----------------------------------
RUSSELL C. BUZBY,
Senior Vice President
2
<PAGE> 62
THIRD AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended by adding the
following additional classification of employee as an eligible Employee,
effective May 1, 1997:
Employee shall also include Sales and Brand Support Employees of
Fetzer Vineyards and Jekel Vineyards.
2. Section 1.21, Year of Service, of Article I is amended by adding the
following additional paragraph, effective May 1, 1997:
Subject to the Break in Service provisions of Section 1.05, the
Elapsed Time provisions of Section 1.08, the Hours of Service
provisions of Section 1.13 and the Period of Severance provisions
of Section 1.17, Sales and Brand Support Employees of Fetzer
Vineyards and Jekel Vineyards are credited with Service for
participation and vesting purposes for all Years of Service with
Fetzer and Jekel from the later of (i) the acquisition date of said
companies or (ii) the Employee's date of hire.
3. Section 5.01(b), Nonelective Contribution by Employer, of Article V,
is amended by adding the following additional provision:
5.01(b) (continued)
Those Plan Participants who are Sales and Brand Support Employees of
Fetzer Vineyards and Jekel Vineyards shall be eligible to receive
the Employer Nonelective Contribution effective January 1, 1998,
based on Compensation from May 1, 1997 through the end of the 1997
Plan Year.
<PAGE> 63
4. Section 7.01, Allocation of Nonelective Employer Contribution, of
Article VII is amended in its entirety as follows:
7.01. Allocation of Nonelective Employer Contribution. Each
Plan Year the Employer Nonelective Contribution shall be allocated
to the Employer Nonelective Contribution Account of all eligible
Participants in the same manner as the contribution is determined
pursuant to Section 5.01.
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Third Amendment to the
Brown-Forman Corporation Savings Plan to be executed by its duly authorized
officer this 30th day of April, 1997, effective May 1, l997.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
-------------------------------------
MILTON B. GILLIS, Vice President
2
<PAGE> 64
FOURTH AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for the Plan Year ending December 31, 1997, Article III is
amended by adding Section 3.10 as follows:
3.10 Former Employees of Thoroughbred Plastics Corporation. A
Participant employed by Thoroughbred Plastics Corporation on September
30, 1997, and whose employment with Thoroughbred Plastics Corporation
or any division, subsidiary or affiliate of the Company terminated on
September 30, 1997, as a direct result of the divestiture of
Thoroughbred Plastics Corporation, is fully vested and has a
nonforfeitable right to his accounts in the Plan in effect on September
30, 1997, payable as provided under such Plan.
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Fourth Amendment to
the Brown-Forman Corporation Savings Plan to be executed by its duly authorized
officer this 10th day of March, 1998, effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
-----------------------------------
MILTON B. GILLIS, Vice President
<PAGE> 65
FIFTH AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed and in Article X that participating
employers may become a party to the Plan pursuant to resolutions of Brown-Forman
Corporation.
It is advisable to amend the Plan in certain respects, consistent with
resolutions adopted on April 8, 1998.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended by adding the
following paragraph:
Effective May 1, 1998, the term Employee shall include
employees of Jack Daniel's Properties, Inc., a subsidiary of
Brown-Forman Corporation.
2. Section 1.10, Employer, of Article I is amended by adding the
following paragraph:
Effective May 1, 1998, Jack Daniel's Properties, Inc., a
subsidiary of Brown-Forman Corporation, adopted this Plan for the
benefit of its employees.
3. Section 1.21, Year of Service, of Article I is amended by adding the
following paragraph:
Subject to the Break in Service provisions of Section 1.05,
the Elapsed Time provisions of Section 1.08, the Hours of Service
provisions of Section 1.13 and the Period of Severance provisions
of Section 1.17, employees of Jack Daniel's Properties, Inc. are
credited with Service for eligibility and vesting purposes from
the earlier of their date of commencement of employment with
Brown-Forman Corporation or their date of commencement of
employment with Jack Daniel's Properties, Inc.
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<PAGE> 66
In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Fifth Amendment to the
Brown-Forman Corporation Savings Plan to be executed by its duly authorized
officer this 31st day of December, 1998, effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Susan Von Hoven
--------------------------------
SUSAN VON HOVEN
Assistant Vice President
2
<PAGE> 67
SIXTH AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
The restated Brown-Forman Corporation Savings Plan was adopted by
Brown-Forman Corporation effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit appears in Article IV of this Plan.
2. Effective April 1, 1999, Sections 4.03 and 4.04 of Article IV are
amended in their entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in one
lump-sum payment in cash in the year in which distribution is to be
made. However, payment of all or any portion of a Participant's
account balance invested in the Brown-Forman Stock Fund may be made
in one lump-sum payment in cash or in kind, with in-kind
distribution in the form of Brown-Forman Corporation Class B shares.
(b) Lifetime Payments. Payments may be made in cash
over a period not extending beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and
the Participant's Beneficiary.
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4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested balance
of that Participant's benefits, such remaining vested balance,
plus the proceeds of any insurance on the life of the Participant
held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in
cash; provided, however, that payment of all or any portion of
the Participant's account balance invested in the Brown-Forman
Stock Fund may be made in one lump-sum payment in cash or in kind,
with in kind distribution in the form of Brown-Forman Corporation
Class B shares.
3. Effective April 1, 1999, Section 6.01, Amount of Elective
Contribution, of Article VI is amended by deleting the first paragraph and
replacing it as follows:
6.01 Amount of Elective Contribution. Each
Participant may elect to defer his or her Compensation and have the
Employer make an Elective Contribution to the Trust on behalf of
the Participant. A Participant who is a Highly Compensated Employee
may make Elective Contributions in an amount between two percent
(2%) and ten percent (10%) (in increments of 1%) of such
Participant's Compensation for the Plan Year in question, but shall
not exceed a dollar amount as adjusted pursuant to the method
provided in Code section 415(d) for such Participant's taxable
year. A Participant who is a Non-Highly Compensated Employee may
make Elective Contributions in an amount between two percent (2%)
and fifteen percent (15%) (in increments of 1%) of such
Participant's Compensation for the Plan Year in question, but shall
not exceed a dollar amount as adjusted pursuant to the method
provided in Code section 415(d) for such Participant's taxable
year. The Plan Administrator may fix lower maximums for Highly
Compensated Employees to satisfy the nondiscrimination tests of
Section 5.05.
4. Effective April 1, 1999, Section 7.10, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B shares,
as an additional investment option under the Plan. A Participant
may direct the investment of his/her account balance into said
Stock Fund under the terms and conditions as agreed upon between
the Trustee and the Plan Administrator.
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In all other respects, the Brown-Forman Corporation Savings Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Sixth Amendment to the
Brown-Forman Corporation Savings Plan to be executed by its duly authorized
officer this 25th day of February, 1999, effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
---------------------------------
MILTON B. GILLIS
Vice President
3
<PAGE> 1
EXHIBIT 4(b)
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
PLAN NO.: 016
EIN: 61-0143150
<PAGE> 2
BROWN-FORMAN CORPORATION SAVINGS PLAN
By action of the Board of Directors, Brown-Forman Corporation, a
Delaware corporation (Employer), has adopted the following Plan for the benefit
of collectively bargained Employees as set forth herein, effective January 1,
1996 (Effective Date). The Plan is established to recognize and reward said
Employees for their contribution to the Employer's successful operation, and is
for the exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
BROWN-FORMAN CORPORATION SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS................................................................1
1.01 Accounts.............................................................1
1.02 Accounting Date......................................................1
1.03 Affiliated Employer..................................................1
1.04 Beneficiary..........................................................1
1.05 Break in Service.....................................................2
1.06 Code.................................................................3
1.07 Collective Bargaining Agreement......................................3
1.08 Compensation.........................................................3
1.09 Elapsed Time.........................................................3
1.10 Employee.............................................................4
1.11 Employer.............................................................4
1.12 Fiscal Year..........................................................4
1.13 Highly Compensated Employee..........................................4
1.14 Hour of Service......................................................5
1.15 Leased Employee......................................................6
1.16 Month of Service.....................................................7
1.17 Normal Retirement Age................................................7
1.18 Period of Severance..................................................7
1.19 Plan Year............................................................7
1.20 Spouse (Surviving Spouse)............................................7
1.21 Total and Permanent Disability.......................................7
1.22 Union................................................................8
1.23 Year of Service......................................................8
ARTICLE II - PARTICIPATION............................................................10
2.01 Eligibility.........................................................10
2.02 Reemployment of Participant.........................................10
2.03 Reemployment of Non-Participant.....................................10
2.04 Transferred Employees...............................................10
2.05 Employment Status Change............................................10
2.06 Participation Following Normal Retirement Age.......................10
ARTICLE III - VESTING ................................................................11
3.01 Fully Vested and Nonforfeitable Account. ..........................11
3.02 Vesting of Employer Matching Account................................11
3.03 Period of Service for Vesting Purposes..............................11
3.04 Vesting Schedule/Employer Matching Contribution Account.............11
3.05 [Reserved]..........................................................11
3.06 Effect of Break in Service on Vesting...............................11
3.07 Date of Termination of Employment...................................12
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination......12
3.09 Amendment of Vesting Schedule.......................................12
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IV - TIME AND MANNER OF PAYMENT...............................................14
4.01 Time of Initial Payment of Retirement Benefits......................14
4.02 Consent To Payment Of Benefits......................................14
4.03 Manner of Payment of Retirement Benefits............................15
4.04 Payment Upon Death of Participant...................................15
4.05 Calculation of Distributions........................................15
4.06 Forfeiture of Non-vested Benefits...................................16
4.07 Fully Vested Account................................................18
4.08 Suspension of Benefits..............................................18
4.09 Pre-1984 Election...................................................18
4.10 Hardship Distribution...............................................18
4.11 Limitation for Qualified Domestic Relations Order...................20
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER.............................................21
5.01 Elective Contribution by Employer...................................21
5.02 Matching Contribution by Employer...................................21
5.03 Deduction of Employer Contributions.................................21
5.04 Limits on Elective and Matching Contributions.......................21
5.05 Special Employer Contributions......................................22
5.06 Correction of Excess Elective Contributions.........................23
5.07 Correction of Excess Employer Matching Contributions................24
5.08 Return of Contribution. ...........................................25
5.09 Plan and Trust Conditioned on Approval and Qualification............25
5.10 Funding Policy......................................................25
ARTICLE VI - PARTICIPANT CONTRIBUTIONS................................................26
6.01 Amount of Elective Contribution.....................................26
6.02 Election Request....................................................26
6.03 Change of Rate......................................................26
6.04 Distributions from Elective Account.................................26
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS...................................28
7.01 Allocation of Elective Contributions................................28
7.02 Allocation of Matching Contribution.................................28
7.03 Allocation of Forfeitures...........................................28
7.04 Amendment of Allocation Eligibility.................................28
7.05 Maximum Additions to Participant's Account..........................29
7.06 Overall Limit.......................................................31
7.07 Date of Allocation to Accounts......................................32
7.08 Expenses of Plan....................................................32
7.09 Participant Direction of Investment. ..............................32
7.10 Periodic Adjustments to Account.....................................33
ARTICLE VIII - TOP HEAVY PROVISIONS...................................................35
8.01 When Provisions Effective...........................................35
8.02 Determination of Top Heavy..........................................35
8.03 Minimum Benefits....................................................36
8.04 Impact on Maximum Benefits..........................................36
8.05 Determination of Super Top Heavy....................................37
</TABLE>
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<TABLE>
<S> <C>
ARTICLE IX - PORTABILITY OF ACCOUNT...................................................38
9.01 Transfers to Another Qualified Plan.................................38
9.02 Eligible Rollover Distributions.....................................38
9.03 Transfers to this Plan..............................................39
ARTICLE X - PARTICIPATING EMPLOYERS...................................................40
10.01 Adoption by Other Employers.........................................40
10.02 Withdrawal from the Plan............................................40
10.03 Action of a Single Employer.........................................40
ARTICLE XI - PLAN ADMINISTRATOR.......................................................41
11.01 Appointment of Plan Administrator...................................41
11.02 Duties of Plan Administrator........................................41
11.03 Decisions of Plan Administrator and Indemnification.................42
11.04 Instructions to Trustee.............................................42
11.05 Claims Procedure....................................................42
11.06 Delegating Responsibility...........................................42
ARTICLE XII - MISCELLANEOUS...........................................................44
12.01 Right to Terminate..................................................44
12.02 Plan Voluntary on Part of Employer..................................44
12.03 Benefits Not Subject to Creditors' Claim............................44
12.04 Trust Agreement.....................................................44
12.05 Assets for Exclusive Benefits to Participants.......................44
12.06 Nonguarantee of Employment..........................................45
12.07 Amendment...........................................................45
12.08 Acts by Trustee.....................................................45
12.09 Laws of Kentucky. .................................................45
12.10 Distribution to Minor or Incompetent Beneficiary....................45
12.11 Construction........................................................45
12.12 Merger or Consolidation.............................................45
12.13 Discretionary Action................................................45
12.14 Lost Beneficiaries; Escheat.........................................46
12.15 Action by the Employer..............................................46
ARTICLE XIII - SIGNATURES.............................................................47
</TABLE>
iii
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ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the Participant's share of Employer Matching Contributions and the share of the
net gains or losses of the Trust attributable to such contributions. The
Employer Matching Contribution Account shall be subject to the vesting
provisions of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, the Accounting Date shall be December 31. The accounts shall be
valued on a daily basis.
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
1
<PAGE> 7
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
2
<PAGE> 8
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Collective Bargaining Agreement. The current and then effective
Collective Bargaining Agreement between the Employer and the Union.
1.08 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) any payments under a nonqualified deferred compensation plan.
In the Employee's first year of participation, Compensation is
recognized as of the Employee's Entry Date into the Plan.
Compensation in excess of $150,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d). If the aggregate Compensation of the "Family Group"
exceeds $150,000, (as indexed), the Compensation considered under the Plan for
each Family Group member is proportionately reduced so the total equals $150,000
(as indexed) (except for purposes of determining the portion of Compensation up
to the integration level, if this Plan provides for permitted disparity).
"Family Group" includes a Participant who owns more than 5% interest in any
entity comprising the Employer or is one of ten Highly Compensated Employees
paid the greatest Compensation during the Plan Year, and the Participant's
Spouse or children under age 19 (who are Participants at the close of the period
used to compute Compensation).
1.09 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.07) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
3
<PAGE> 9
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.10 Employee. An hourly person actually engaged in the conduct of the
business of the Employer who is employed at the Louisville Production Operations
and/or Early Times Distillery and who is required to be and is included in a
unit of employees covered by a Collective Bargaining Agreement between the Union
and the Employer.
1.11 Employer. Brown-Forman Corporation or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Notwithstanding any other provisions of this Section, any business
entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired by the Employer or its
Affiliated Employers that was not participating in the plan on January 1, 1996,
may adopt this Plan for its employees and become an adopting Employer only after
the Executive Committee of the Board of Directors of Brown-Forman Corporation
approves its participation and the conditions set out in Section 10.01 are met.
Until the requirements of the preceding sentence are satisfied, none of such
entity's employees are eligible to participate in this Plan.
1.12 Fiscal Year. May 1 to April 30, the tax and accounting year of
the Employer.
1.13 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to section 415(d) of the Code); (ii) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received Compensation during such year that is
greater than 50 percent of the dollar limitation in effect under section
415(b)(1)(A) of the Code. The term highly
4
<PAGE> 10
compensated employee also includes: (i) employees who are both described in the
preceding sentence if the term "determination Year is substituted for the term
"look-back year" and the employee is one of the 100 employees who received the
most compensation from the employer during the determination year; and (ii)
employees who are 5 percent owners at any time during the look-back year or
determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former employee or
a highly compensated employee who is one of the 10 most highly compensated
employees who is ranked on the basis of Compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants.
1.14 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hour of
Service is credited no more than once to a single Employee, even though it may
fall within more than one of categories (i), (ii) and (iii) of the preceding
sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's
5
<PAGE> 11
compensation, or unemployment compensation or disability insurance laws; (iii)
Hours of Service are not credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee; and
(iv) Hours of Service are not credited to an Employee for payments made by this
Plan or any other pension or profit sharing plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with Hours
Worked, as defined in Labor Regulation Section 2530.200b-3(d)(3)(i) in which 870
Hours Worked are equivalent to 1,000 Hours of Service, and 435 Hours Worked are
equivalent to 500 Hours of Service.
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.15 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
6
<PAGE> 12
1.16 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.17 Normal Retirement Age. A Participant's 65th birthday.
1.18 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.19 Plan Year. January 1 to December 31, the accounting year of the
Plan.
1.20 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.21 Total and Permanent Disability. A personal disablement resulting
from bodily or mental injury or disease which presumably will permanently,
continuously, and wholly prevent the Participant during the remainder of the
Participant's life from engaging in any regular occupation or performing any
regular work for wage or profit. The Plan Administrator shall determine the
existence of Total and Permanent Disability and may have the Participant
examined by and may rely on advice from a licensed physician chosen by the Plan
Administrator. The determination shall be applied uniformly to all Participants.
7
<PAGE> 13
A Participant may not qualify for Total and Permanent Disability if the
disability is caused by any of the following:
(a) Disability suffered or incurred while the Participant was engaged
in, or which resulted form the Participant engaging in, a criminal enterprise;
(b) Disability resulting from self-inflicted injury;
(c) Disability which results from abuse of alcohol or narcotics; or
(d) Disability resulting exclusively from military service in the armed
forces of any country for which the Participant receives a government pension.
1.22 Union. One of the following bargaining units.
(a) International Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers, Local Union No. 89, at Louisville Production Operations and Early
Times Distillery;
(b) International Brotherhood of Fireman and Oilers, AFL-CIO Local
No. 320 at Louisville Production Operations and Early Times Distillery;
(c) International Union, United Plant Guard Workers of America, Local
No. 110 at Louisville Production Operations and Early Times Distillery; and
(d) International Brotherhood of Electrical Workers Union, AFL-CIO,
Local No. 369 at Louisville Production Operations and Early Times Distillery.
1.23 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three hundred sixty-five (365) day period of
service. An Employee will receive credit for the aggregate of all Years of
Service commencing with the Employee's first day of employment and ending on the
date a Break in Service begins.
8
<PAGE> 14
ARTICLE II - PARTICIPATION
2.01 Eligibility. Upon filing an application with the Employer, an
Employee becomes a Participant as of the first day of the month coinciding with
or next following the date the Employee completes a Year of Service with the
Employer.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.11 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
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<PAGE> 15
ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Account. A Participant's Elective
Contribution Account is fully vested at all times.
3.02 Vesting of Employer Matching Account. A Participant's Employer
Matching Contribution Account is fully vested upon the first of the following
events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Plan on January 1, 1996, shall be deemed to be service with
the Employer will be determined by the Executive Committee of the Board of
Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
</TABLE>
3.05 [Reserved].
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If a
terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in
10
<PAGE> 16
Service, both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service, all post-break service will be disregarded in
determining the vested percentage of such Participant's Account which
accrued prior to the break. However, all Years of Service (both
pre-break and post-break) will count for purposes of vesting the
Participant's Account which accrues after the break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service, all service after the break is
disregarded in determining the vested percentage of the Participant's
Account that accrued prior to the break. Further, such Participant's
pre-break service counts for purposes of determining the vested
percentage of the Participant's Account which accrues after the break
only if upon reemployment the number of consecutive Breaks in Service
is less than the aggregate number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or
11
<PAGE> 17
the adoption date of such amendment, it has the effect of reducing such
Participant's vested accrued benefit as calculated without regard to the
amendment. If the Plan's vesting schedule is amended or the Plan is amended in
any way that directly or indirectly affects the computation of a Participant's
vested percentage, or if the Plan is deemed amended by an automatic change to or
from a Top Heavy vesting schedule, each Participant with at least 3 Years of
Service as of the end of the election period may elect to have such
Participant's vested percentage computed under the Plan without regard to such
amendment or change.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan
Administrator.
12
<PAGE> 18
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of
13
<PAGE> 19
Normal Retirement Age or age 62. Absent such Participant's consent to receive
benefits in excess of $3,500, distribution of benefits shall begin no sooner
than the later of age 62 or Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed over (1)
a period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of the
Participant and the Participant's designated Beneficiary or (2) a
period not extending beyond the life expectancy of the designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning
14
<PAGE> 20
with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) The amount to be distributed each year shall not
be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the
Participant shall be distributed using the applicable life
expectancy in subsection (i) above as the relevant divisor
without regard to proposed regulations section 1.401(a)(9)-2.
(iii) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(iv) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case of any Participant who has incurred five (5) or more
consecutive Breaks in Service (Five Year Break in Service) prior to the
resumption of employment with the Employer, the non-vested portion of
such terminated Participant's benefits, and all regular periodic
adjustments thereto, shall be deemed forfeited and shall be used to
reduce the Employer's contribution for the Plan Year within which the
fifth Break in Service occurs. Upon such forfeiture, such
15
<PAGE> 21
terminated Participant's Account shall be closed and if the vested
Account balance has not been paid to the Participant, the vested
portion of such Account shall be transferred to a separate Fully
Vested Account for such terminated Participant's benefit; provided,
however, at such time as the terminated Participant resumes employment
with the Employer, an additional separate Account shall be established
for the Participant's benefit as if the Participant were a new
Participant, which Account shall be maintained separate and distinct
from the Participant's Fully Vested Account, until such Account
becomes fully vested at which time the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be allocated
as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as though
a Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account
balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's reemployment;
provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the Participant
is completed by the earlier of: (1) the last day of the Plan
Year within which the Participant has five consecutive Breaks
in Service or (2) five years after the Participant is
reemployed by the Employer. If a terminated Participant incurs
five consecutive Breaks in Service, repayment will not be
permitted.
(ii) Non-Vested Participant. If a terminated Participant
who had no vested interest in his benefits is reemployed by
the Employer before the Participant's consecutive Breaks in
Service equal or exceed the greater of (1) five, or (2) the
aggregate number of pre-break Years of Service, that
terminated Participant's
16
<PAGE> 22
benefits, if previously forfeited shall be reinstated (in cash
or in kind as initially forfeited) to constitute the opening
balance of such Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated Participant's
Account which has not yet been applied pursuant to subsection
(a) above (the account of potential forfeitures); or if
insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Restoration
of a forfeiture pursuant to this subsection (e) shall in all events be
completed by the Accounting Date of the Plan Year next following the
Plan Year within which the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
4.09 Pre-1984 Election. [Reserved].
4.10 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for any Special Employer Contributions and earnings
credited to the Participant's Elective Account) of an amount necessary
to satisfy the Participant's immediate and heavy financial need where
the Participant lacks other available resources on account of:
17
<PAGE> 23
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household or
other dependant,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan Administrator
determines constitutes an immediate and heavy financial need.
No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant is limited to two (2) hardship
distributions per Plan Year.
(ii) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(iii) The application shall include a signed
statement of the facts causing financial hardship and any
other facts required by the Plan Administrator.
(iv) The distribution shall not exceed the amount of
the financial need.
(v) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
(vi) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
18
<PAGE> 24
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.11 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may be
charged against and paid from the Accounts of the Participant named in the
order.
19
<PAGE> 25
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.01.
5.02 Matching Contribution by Employer. Each calendar quarter of the
Plan Year the Employer shall contribute to the Trust a Matching Contribution on
behalf of each Participant receiving an Elective Contribution for that quarter.
The amount of the Matching Contribution shall be equal to 50% of the
Participant's Elective Contributions. However, in applying the foregoing
matching percentages, only Participant Elective Contributions up to an average
of twenty ($20.00) dollars per week for each week of said quarter shall be
considered. The Matching Contribution shall be credited to the Employer Matching
Contribution Account of eligible Participants in accordance with Section 7.02.
5.03 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the Employer provided the return is
accomplished within one (1) year after the disallowance of the deduction.
5.04 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
For Plan Years beginning after December 31, 1988, to prevent the
multiple use of the tests in this subsection (b), if a Highly Compensated
Participant is eligible to make elective deferrals pursuant to any cash or
deferred arrangement maintained by the Employer or an Affiliated Employer, or to
make Employee contributions or receive matching contributions under this or any
other plan maintained by the Employer or an Affiliated Employer, such
Participant's Actual Contribution Percentage shall be reduced pursuant to
Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated by reference.
20
<PAGE> 26
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year by the
Participant's Compensation for such Plan Year. The ADP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ADPs of each eligible Participant in the group, calculated to the
nearest one-hundredth of one percent. Elective Contributions allocated to
non-Highly Compensated Participants shall not include Excess Deferrals
(determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions for the Plan Year by the
Participant's Compensation for such Plan Year. The ACP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ACPs of each eligible Participant in the group calculated to the
nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
For purposes of determining the ADP and ACP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated Employees,
the Elective Contributions, Matching Contributions and Compensation of such
Participant shall include the Elective Contributions, Matching Contribution and
Compensation of "family members" (as defined in Code section 414(q)(6)), and the
family group shall be treated as one Highly Compensated Participant. Family
members shall be disregarded for purposes of determining the ADP and ACP of the
group of non-Highly Compensated Participants.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions or Matching Contributions are made, such contributions on behalf
of such Highly Compensated Participant shall be aggregated in determining the
ADP and ACP of such Participant. If the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. Plans may be aggregated to satisfy Code section 401(k)
and 401(m) only if they have the same Plan Year.
5.05 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.04.
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The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.02. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.04, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining nondiscrimination tests.
5.06 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.04, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest ADP such Participant's excess amounts ("Excess Contributions") and
income allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ADP equals
the ADP of the Highly Compensated Participant having the second highest ADP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Contributions for a Highly Compensated Participant is then
equal to the total of elective and other contributions taken into account for
the ADP test, minus the product of the employee's ADP (as determined after
application of this Section) and the employee's compensation used in determining
that ratio. The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by any previous distribution of Excess
Deferrals (pursuant to Section 6.01) for the employee's taxable year ending in
the same Plan Year.
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Excess Contributions shall within two and one-half months after the
Plan Year end be distributed to the Participant. Distribution may be postponed
but not later than the close of the Plan Year following the Plan Year in which
the Excess Contribution was allocable; however, if the Excess Contributions are
not corrected within two and one-half months after the Plan Year end, a 10%
excise tax will be imposed on the Employer on such amounts. Recharacterization
may be combined with distribution to correct Excess Contributions. The Employer
shall designate the distribution as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution shall be made first from unmatched Elective Contributions,
and then simultaneously from matched Elective Contributions and Matching
Contributions which relate to such Elective Contributions. However, any such
Matching Contributions which are not vested shall be forfeited in lieu of
distribution.
Correction of Excess Contributions of a Highly Compensated Participant
whose ADP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(k)-1(f)(5)(ii).
5.07 Correction of Excess Employer Matching Contributions. If the
amount of Matching Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.04, the
Plan Administrator shall distribute to the Highly Compensated Participant having
the highest ACP such Participant's excess amounts ("Excess Aggregate
Contributions") and income allocable thereto (determined under applicable
regulations) until the nondiscrimination tests are satisfied, or until such
Participant's ACP equals the ACP of the Highly Compensated Participant having
the second highest ACP. This process shall continue until the nondiscrimination
tests are satisfied. The amount of Excess Aggregate Contributions for a Highly
Compensated Employee is then equal to the total of voluntary, matching and other
contributions taken into account for the ACP test, minus the product of the
Employee's ACP (as determined after application of this Section) and the
Employee's Compensation used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
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(b) Voluntary Contributions, if any, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
Correction of Excess Aggregate Contributions of a Highly Compensated
Participant whose ACP is determined under the family aggregation rules shall be
made in accordance with Regulation 1.401(m)-1(e)(2)(iii).
5.08 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.09 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.10 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between ten ($10.00) dollars and one hundred twenty ($120.00)
dollars (in increments of $1.00) of the Participant's Compensation per week, but
shall not exceed a dollar amount as adjusted pursuant to the method provided in
Code section 415(d) for the Participant's taxable year. The Plan Administrator
may fix lower maximums for Highly Compensated Employees to satisfy the
nondiscrimination tests of Section 5.04.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.06 for the Plan
Year beginning within the Participant's taxable year.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any other time mutually
agreeable between the Employer and the Participant, provided that all
Participants under similar circumstances are treated alike. The Participant is
limited to three (3) such changes for the Plan Year.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, or separation from service;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such
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corporation if the Participant continues employment with the
corporation acquiring such assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to
Section 4.10; or
(vi) pursuant to Sections 6.01 and 5.06.
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.02 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.02.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.03 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.04 Amendment of Allocation Eligibility. Notwithstanding anything to
the contrary, if this is a Plan that would otherwise fail to meet the
requirements of Code sections 401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the
Regulations thereunder because Employer contributions have not been allocated to
a sufficient number or percentage of Participants for a Plan Year, then the
following rules shall apply:
(a) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include
the minimum number of Participants who would not otherwise be eligible
as are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of this
paragraph shall be those who are actively employed on the last day of
the Plan Year and, when compared to similarly situated Participants,
have completed the greatest number of Hours of Service in the Plan
Year.
(b) If after application of paragraph (a) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and forfeitures for
the Plan Year shall be further expanded to include the minimum number
of Participants who are not actively employed on the last day of the
Plan Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
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(c) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
7.05 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions credited for the
Limitation Year to the extent the return would reduce the excess amount
in the Participant's Accounts;
(b) Hold any remaining excess after the return of elective
contributions in the Participant's Account to be used to reduce
Employer contributions in the next Limitation Year and succeeding years
if necessary;
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and
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applied to reduce Employer contributions for all remaining
Participant's in the next Limitation Year (and succeeding years if
necessary) before any Employer or Employee contributions may be made
to the Plan for that Limitation Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
Compensation shall be limited to $150,000 as adjusted in the same
manner as permitted under Code section 415(d).
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7.06 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Participant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction for
any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(1)(2) of the Code
maintained by the employer); and the denominator of which is the sum of
the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The
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adjustment is calculated using the fractions as they would be computed
as of the end of the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the section 415 limitation
applicable to the first Limitation Year beginning on or after January
1, 1987. The Annual Addition for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all Employee
contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
7.07 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.08 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.09 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish written procedures, incorporated specifically as
part of this Plan, relating to Participant direction of investment under this
Section 7.09.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
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(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.10 Periodic Adjustments to Account. The Account(s) held in trust for
the benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
(i) The fair market value of the Trust on the current
Accounting Date as of which the calculation is made, excluding the
Employer's contribution and all voluntary contributions of
Participants for the current Accounting Date, less
(ii) The fair market value of the Trust on the immediately
preceding Accounting Date, including the Employer's contribution
and all voluntary contributions of Participants as of such
Accounting Date, but not including any amount falling due and paid
from the Trust during such Plan Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single payment to be
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such
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distribution in order to account for any substantial changes in the
value of the Trust assets since such Account's most recent regular
periodic adjustment. In such event, the Plan Administrator shall
restate the value of the Trust assets in order to determine the
percentage of increase or decrease in the fair market value of all net
Trust assets (deducting any advance contributions and any voluntary
contributions of Participants for the Plan Year in question) as of the
end of the month (hereinafter referred to as the Interim Valuation
Date) next preceding the date of distribution of the Account. The
Participant's Account, as of the Accounting Date immediately preceding
such Interim Valuation Date, shall, for the purpose of distribution
only, be adjusted to reflect such increase or decrease, as the case may
be, by multiplying such Account by the percentage determined as
aforesaid. Such interim valuation percentage once determined shall be
applied to the Accounts of any other Participants who are to receive a
distribution of their Account in a single payment following such
Interim Valuation Date but prior to the next regular periodic
adjustment of Accounts, or the next Interim Valuation Date, whichever
is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.04 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.04;
(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.04.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be
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satisfied by aggregating the contributions made in all of the aggregated defined
contribution plans of the Employer.
8.05 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. This section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former
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employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown-Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by action
of its governing authority, may withdraw from the Plan after giving 90 days
advance notice to the Board of Directors of Brown-Forman Corporation, provided
the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
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ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service
with the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
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(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
11.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
11.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any
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such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The Trustee
shall have the right, in its sole discretion, by written instrument delivered
to the Plan Administrator, to reject and to refuse to exercise any such
delegated authority.
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ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is incorporated herein and made a part hereof. The
Trust and any income therefrom received by the Trustee shall be received, held
in trust, and disbursed by the Trustee in accordance with written instructions
from the Plan Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used for purposes other than for the
exclusive benefit of the Participants or their Beneficiaries at any time prior
to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries under the Trust.
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12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
12.08 Acts by Trustee. The Employer shall not be responsible for any
of the acts of the Trustee.
12.09 Laws of Kentucky. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the laws of Kentucky, to the
extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
12.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary
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<PAGE> 50
power includes, but is not limited to, construing and interpreting this Plan,
construing disputed or doubtful terms, supplying omissions in accordance with
the intent of the Plan, deciding questions of eligibility for participation,
determining the amount, timing and payment of benefits under the terms of the
Plan, reviewing benefit eligibility determinations, and authorizing the payment
of benefits. Whenever the Administrator acts pursuant to the terms of this Plan,
such action will be taken in a uniform and nondiscriminatory manner. Any
construction of the Plan or Trust adopted by the Administrator in good faith,
and any discretionary action exercised by the Administrator in good faith, shall
be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
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ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 28th day of December, 1995, effective January 1,
1996.
BROWN-FORMAN CORPORATION
By : /s/ Milton B. Gillis
----------------------------------
MILTON B. GILLIS, Vice President
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<PAGE> 52
FIRST AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
The Brown-Forman Corporation Savings Plan for Collectively Bargained
Employees was adopted by Brown-Forman Corporation effective January 1, 1996.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 6.01, Amount of Elective Contribution, of Article VI is
amended by adding the following additional sentence to the first paragraph of
the section:
A Participant's Elective Contribution for a calendar year under the
Plan and all other plans, contracts and arrangements of an employer
may not exceed the 402(g) limitation which is the greater of $7,000
or the adjusted amount determined by the Secretary of the Treasury.
2. Section 7.04, Amendment of Allocation Eligibility, of Article VII is
amended in its entirety as follows:
7.04 Amendment of Allocation Eligibility. [Reserved.]
In all other respects, the Brown-Forman Corporation Savings Plan for
Collectively Bargained Employees as initially adopted and subsequently amended
shall remain in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees to be
executed by its duly authorized officer this 6th day of March, 1997, effective
January 1, 1996.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
----------------------------------
MILTON B. GILLIS, Vice President
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<PAGE> 53
CORRECTIVE AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY-BARGAINED EMPLOYEES
The Brown-Forman Corporation Savings Plan for Collectively-Bargained
Employees was adopted by Brown-Forman Corporation effective January 1, 1996.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to correctively amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.08, Compensation, of Article I is correctively amended by
deleting in its entirety the third paragraph of said section which provides that
Compensation will be recognized only from Date of Plan Entry.
In all other respects, the Brown-Forman Corporation Savings Plan for
Collectively-Bargained Employees as initially adopted and subsequently amended
shall remain in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Corrective Amendment
to the Brown-Forman Corporation Savings Plan for Collectively-Bargained
Employees to be executed by its duly authorized officer this 13th day of March,
1997, effective January 1, 1996.
BROWN-FORMAN CORPORATION
By: /s/ Russell C. Buzby
----------------------------------
RUSSELL C. BUZBY,
Senior Vice President
1
<PAGE> 54
SECOND AMENDMENT
BROWN-FORMAN SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
The Brown-Forman Corporation Savings Plan For Collectively Bargained
Employees was adopted by Brown-Forman Corporation effective January 1, 1996.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.10, Employee, of Article I is amended in its entirety,
effective October 1, 1998, as follows:
1.10 Employee. An hourly person actually engaged in the conduct of
the business of the Employer who is employed at the Louisville
Production Operations and/or Early Times Distillery and/or Bluegrass
Cooperage Company and who is required to be and is included in a unit
of employees covered by a Collective Bargaining Agreement between the
Union and the Employer.
2. Section 1.22, Union, of Article I is amended in its entirety,
effective October 1, 1998, as follows:
1.22 Union. One of the following bargaining units:
(a) International Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers, Local Union No. 89, at Louisville Production Operations
and Early Times Distillery;
(b) International Brotherhood of Fireman and Oilers, AFL-CIO Local No.
320 at Louisville Production Operations and Early Times Distillery;
(c) International Union, United Plant Guard Workers of America, Local
No. 110 at Louisville Production Operations and Early Times Distillery;
(d) International Brotherhood of Electrical Workers Union, AFL-CIO
Local No. 369 at Louisville Production Operations and Early Times
Distillery;
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(e) United Automobile, Aerospace and Agricultural Workers of America,
UAW Local 2309;
(f) International Union, United Plant Guard Workers of America, Local
No. 110 at Bluegrass Cooperage Company; and
(g) International Brotherhood of Fireman and Oilers, AFL-CIO Local 320
at Bluegrass Cooperage Company.
3. Section 5.02, Matching Contribution by Employer, of Article V is
amended in its entirety, effective October 1, 1998, as follows:
5.02 Matching Contribution by Employer.
(a) International Brotherhood of Teamsters, Chauffeurs,
Warehousemen and Helpers, Local Union No. 89, at Louisville Production
Operations and Early Times Distillery; International Brotherhood of
Fireman and Oilers, AFL-CIO Local No. 320 at Louisville Production
Operations and Early Times Distillery; International Union, United
Plant Guard Workers of America, Local No. 110 at Louisville Production
Operations and Early Times Distillery; and International Brotherhood
of Electrical Workers Union, AFL-CIO Local No. 369 at Louisville
Production Operations and Early Times Distillery. Each calendar
quarter of the Plan Year the Employer shall contribute to the Trust a
Matching Contribution on behalf of each Participant who is a member of
the above-referenced Unions receiving an Elective Contribution for
that quarter. The amount of the Matching Contribution shall be equal
to 50% of the Participant's Elective Contributions. However, in
applying the foregoing matching percentages, only Participant Elective
Contributions up to an average of twenty ($20.00) dollars per week for
each week of said quarter shall be considered. The Matching
Contribution shall be credited to the Employer Matching Contribution
Account of eligible Participants in accordance with Section 7.02.
(b) United Automobile, Aerospace and Agricultural Workers of
America, UAW Local 2309; International Brotherhood of Fireman and
Oilers, AFL-CIO Local 320 at Bluegrass Cooperage Company; and
International Union, United Plant Guard Workers of America, Local No.
110 at Bluegrass Cooperage Company. Each Plan Year the Employer shall
contribute to the Trust a Matching Contribution on behalf of each
Participant who is a member of the above-referenced Unions receiving
an Elective Contribution for that Plan Year. The amount of the
Matching Contribution shall be equal to 25% of the Participant's
Elective Contributions. However, in applying the foregoing matching
percentages, effective from October 1, 1998 to June 30, 1999, only
Participant Elective Contributions up to the first 2% of Compensation
deferred for the Plan Year shall be considered. Effective July 1,
1999, only the first 3% of Compensation deferred for the Plan Year
shall be considered. The Matching
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Contribution shall be credited to the Employer Matching Contribution
Account of eligible Participants in accordance with Section 7.02.
4. The first paragraph of Section 5.06, Correction of Excess Elective
Contributions, of Article V is amended in its entirety, effective January 1,
1997, as follows:
5.06 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section
5.04, the Plan Administrator shall distribute such excess amounts
("Excess Contributions") and income allocable thereto (determined
under applicable regulations). The Excess Contributions are the amount
of Elective Contributions made by the Highly Compensated Participants
which causes the Plan to fail to satisfy the ADP test. The Plan
Administrator will determine the amount of the Excess Contributions by
starting with the Highly Compensated Participant(s) who has (have) the
greatest ADP, reducing his (their) ADP (but not below the next highest
ADP), then, if necessary, reducing the ADP of the Highly Compensated
Participant(s) at the next highest ADP, including the ADP of the
Highly Compensated Participant(s) whose ADP the Plan Administrator
already has reduced (but not below the next highest ADP), and
continuing in this manner until the average ADP for the Highly
Compensated Group satisfies the ADP test. After the Plan Administrator
has determined the Excess Contribution amount, the Trustee, as
directed by the Plan Administrator, then will distribute to each
Highly Compensated Participant his respective share(s) of Excess
Contributions. The Plan Administrator will determine the respective
share(s) of Excess Contributions by starting with the Highly
Compensated Participant(s) who has (have) the highest amount of
Elective Contributions, reducing the amount of his (their) Elective
Contributions (but not below the next highest level of Elective
Contributions), then, if necessary, reducing the amount of the
Elective Contributions of the Highly Compensated Participant(s) at the
next highest level of Elective Contributions including the amount of
Elective Contributions of the Highly Compensated Participant(s) whose
Elective Contributions the Plan Administrator already has reduced (but
not below the next highest level of Elective contributions), and
continuing in this manner until the Participant has distributed all
Excess Contributions.
5. The first paragraph of Section 5.07, Correction of Excess Employer
Matching Contributions, of Article V is amended in its entirety, effective
January 1, 1997, as follows:
5.07 Correction of Excess Employer Matching Contributions. If the
amount of Matching Contributions allocated to the group of Highly
Compensated Participants exceeds the nondiscrimination tests specified
in Section 5.04, the Plan Administrator shall distribute (or forfeit,
if applicable) such excess amounts ("Excess Aggregate Contributions")
and income allocable thereto (determined under applicable
regulations). The Excess Aggregate Contributions are the amount of
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<PAGE> 57
aggregate contributions allocated on behalf of the Highly Compensated
Participants which causes the Plan to fail to satisfy the ACP test.
The Plan Administrator will determine the amount of the Excess
Aggregate Contributions by starting with the Highly Compensated
Participant(s) who has (have) the greatest contribution percentage,
reducing his (their) contribution percentage (but not below the next
highest contributions percentage), then, if necessary, reducing the
contribution percentage on the Highly Compensated Participant(s) at
the next highest contribution percentage level, including the
contribution percentage of the Highly Compensated Participant(s) whose
contribution percentage the Plan Administrator already has reduced
(but not below the next highest contribution percentage), and
continuing in this manner until the ACP for the Highly Compensated
Group satisfies the ACP test. After the Plan Administrator has
determined the Excess Aggregate Contribution amount, the Trustee, as
directed by the Plan Administrator, then will distribute to each
Highly Compensated Participant his respective share of the Excess
Aggregate Contributions. The Plan Administrator will determine the
respective share(s) of Excess Aggregate Contributions by starting with
the Highly Compensated Participant(s) who has (have) the greatest
amount of aggregate contributions, reducing the amount of his (their)
aggregate contributions (but not below the next highest amount of the
aggregate contributions), then, if necessary reducing the amount of
aggregate contributions of the Highly Compensated Participant(s) at
the next highest level of aggregate contributions, including the
amount of aggregate contributions of the Highly Compensated
Participant(s) whose aggregate contributions the Plan Administrator
already has reduced (but not below the next highest level of aggregate
contributions), and continuing in this manner until the Trustee has
distributed all Excess Aggregate Contributions.
6. Section 6.01, Amount of Elective Contribution, of Article VI is
amended in its entirety, effective October 1, 1998, as follows:
6.01 Amount of Contribution.
(a) International Brotherhood of Teamsters, Chauffeurs,
Warehouseman and Helpers, Local Union No. 89, at Louisville Production
Operations and Early Times Distillery; International Brotherhood of
Fireman and Oilers, AFL-CIO Local 320 at Louisville Production
Operations and Early Times Distillery; International Union, United
Plant Guard Workers of America, Local No. 110 at Louisville Production
Operations and Early Times Distillery; and International Brotherhood of
Electrical Workers Union, AFL-CIO, Local No. 369 at Louisville
Production Operations and Early Times Distillery. Each Participant who
is a member of the above-referenced Unions may elect to defer his or
her Compensation and have the Employer make an Elective Contribution to
the Trust on behalf of the Participant. Elective Contributions may be
an amount between ten ($10.00) dollars and one hundred twenty ($120.00)
dollars (in increments of $1.00) of the Participant's Compensation per
week, but shall not exceed a dollar amount as adjusted pursuant to the
method provided in Code Section 415(d) for the Participant's taxable
year.
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<PAGE> 58
(b) United Automobile, Aerospace and Agricultural Workers of
America, UAW Local 2309; International Brotherhood of Fireman and
Oilers, AFL-CIO Local No. 320 at Bluegrass Cooperage Company; and
International Union, United Plant Guard Workers of America, Local No.
110 at Bluegrass Cooperage Company. Each Participant who is a member of
the above-referenced Unions may elect to defer his or her Compensation
and have the Employer make an Elective Contribution to the Trust on
behalf of the Participant. Elective Contributions may be an amount
between two (2%) percent and fifteen (15%) percent (in increments of
1%) of the Participant's Compensation for the Plan Year, but shall not
exceed a dollar amount as adjusted pursuant to the method provided in
Code Section 415(d) for the Participant's taxable year.
The Plan Administrator may fix lower maximums for Highly
Compensated Employees to satisfy the nondiscrimination tests of Section
5.04.
If the dollar limitation provided above is exceeded, the
excess amount ("Excess Deferral"), plus any income and minus any loss
attributable to such amount, shall be distributed to the Participant by
April 15 of the year following the year in which the excess amount was
contributed, and in no event later than the last day of the Plan Year
following the Plan Year in which the excess arose. The amount
distributed shall not exceed the Participant's salary reduction
contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous
distribution of Excess Contributions pursuant to Section 5.06 for the
Plan Year beginning within the Participant's taxable year.
In all other respects, the Brown-Forman Corporation Savings Plan For
Collectively Bargained Employees as initially adopted and subsequently amended
shall remain in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Second Amendment to
the Brown-Forman Corporation Savings Plan For Collectively Bargained Employees
to be executed by its duly authorized officer this 30th day of September, 1998,
effective October 1, 1998, unless otherwise set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Susan Von Hoven
-----------------------------------
SUSAN VON HOVEN
Assistant Vice President
6
<PAGE> 59
THIRD AMENDMENT
BROWN-FORMAN CORPORATION SAVINGS PLAN
FOR COLLECTIVELY-BARGAINED EMPLOYEES
The Brown-Forman Corporation Savings Plan for Collectively-Bargained
Employees was adopted by Brown-Forman Corporation effective January 1, 1996.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit appears in Article IV of this Plan.
2. Effective April 1, 1999, Sections 4.03 and 4.04 of Article IV are
amended in their entirety as follows:
4.03 Manner of Payment of Retirement Benefits. Distribution of
a Participant's benefits will be made to the Participant or
Beneficiary by one of the following methods as elected by the
Participant:
(a) Single Payment. Payment may be made in one lump-sum
payment in cash in the year in which distribution is to be made.
However, payment of all or any portion of a Participant's account
balance invested in the Brown-Forman Stock Fund may be made in one
lump-sum payment in cash or in kind, with in-kind distribution in
the form of Brown-Forman Corporation Class B shares.
(b) Lifetime Payments. Payments may be made in cash over
a period not extending beyond the life expectancy of the
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<PAGE> 60
Participant or the joint life expectancies of the Participant
and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment of
all or any portion of the Participant's account balance
invested in the Brown-Forman Stock Fund may be made in one
lump-sum payment in cash or in kind, with in kind distribution
in the form of Brown-Forman Corporation Class B shares.
3. Effective April 1, 1999, Section 7.09, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have established the
Brown-Forman Stock Fund, composed of employer securities in the form
of Brown-Forman Corporation Class B shares, as an additional
investment option under the Plan. A Participant may direct the
investment of his/her account balance into said Stock Fund under the
terms and conditions as agreed upon between the Trustee and the Plan
Administrator.
In all other respects, the Brown-Forman Corporation Savings Plan for
Collectively-Bargained Employees as initially adopted and subsequently amended
shall remain in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Third Amendment to the
Brown-Forman Corporation Savings Plan for Collectively-Bargained Employees to
be executed by its duly authorized officer this 25th day of February, 1999,
effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
-------------------------------
MILTON B. GILLIS,
Vice President
2
<PAGE> 1
EXHIBIT 4(c)
FETZER VINEYARDS
PROFIT SHARING PLAN
PLAN NO.: 001
EMPLOYER IDENTIFICATION NO.: 94-2458321
<PAGE> 2
FETZER VINEYARDS
PROFIT SHARING PLAN
Fetzer Vineyards, located in Redwood Valley, California (Employer),
adopted a profit sharing plan effective December 1, 1981, known as Fetzer
Vineyards Profit Sharing Plan. Effective December 1, 1984, the Employer adopted
an amended and restated prototype 401(k) profit sharing plan (Prior Plan).
Effective December 1, 1989 and December 1, 1993, the Employer adopted amendments
and restatements of the Prior Plan.
Effective December 1, 1994 (Effective Date), unless otherwise
indicated, the Employer, in accordance with the provisions of the Prior Plan,
cancels participation in the Prior Plan and amends and restates the Prior Plan
in its entirety as a 401(k) profit sharing plan, known as Fetzer Vineyards
Profit Sharing Plan (Plan). The Plan is established to recognize and reward
employees for their contribution to the Employer's successful operation, and is
for the exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
The provisions of this Plan apply only to an Employee who terminates
employment on or after the Effective Date. Any rights and benefits of a former
employee are determined in accordance with the provisions of the Prior Plan in
effect on the date the employee's employment terminated.
<PAGE> 3
FETZER VINEYARDS PROFIT SHARING PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS........................................................1
1.01 Accounts..........................................................1
1.02 Accounting Date...................................................1
1.03 Affiliated Employer...............................................1
1.04 Beneficiary.......................................................1
1.05 Break in Service..................................................2
1.06 Code..............................................................2
1.07 Compensation......................................................2
1.08 Employee..........................................................3
1.09 Employer..........................................................3
1.10 Fiscal Year.......................................................4
1.11 Highly Compensated Employee.......................................4
1.12 Hour of Service...................................................4
1.13 Leased Employee...................................................5
1.14 Normal Retirement Age.............................................6
1.15 Plan Year.........................................................6
1.16 Spouse (Surviving Spouse).........................................6
1.17 Total and Permanent Disability....................................6
1.17 Year of Service...................................................6
ARTICLE II - PARTICIPATION.....................................................8
2.01 Eligibility.......................................................8
2.02 Reemployment of Participant.......................................8
2.03 Reemployment of Non-Participant...................................8
2.04 Transferred Employees.............................................8
2.05 Employment Status Change..........................................8
2.06 Participation Following Normal Retirement Age.....................9
ARTICLE III - VESTING ........................................................10
3.01 Elective Account Fully Vested....................................10
3.02 Vesting of Other Accounts........................................10
3.03 Credit for Vesting when Eligibility Computation Period
Overlaps Vesting Computation Period..............................10
3.04 Vesting Schedule.................................................10
3.05 Effect of Break in Service on Vesting............................11
3.06 Service Disregarded..............................................11
3.07 Date of Termination of Employment................................11
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination...11
3.09 Amendment of Vesting Schedule....................................11
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IV - TIME AND MANNER OF PAYMENT.......................................13
4.01 Time of Initial Payment of Retirement Benefits....................13
4.02 Consent To Payment Of Benefits....................................13
4.03 Early Retirement Distribution.....................................14
4.04 Manner of Payment of Retirement Benefits..........................14
4.05 Election to Waive Joint and Survivor Annuity and Single
Life Annuity......................................................15
4.06 Payment Upon Death of ............................................16
4.07 Payment Upon Death of a Participant...............................17
4.08 Election to Waive Pre-Retirement Survivor Annuity.................18
4.09 Minimum Amounts to be Distributed.................................19
4.10 Calculation of Distributions......................................19
4.11 Forfeiture of Non-vested Benefits.................................21
4.12 Fully Vested Account..............................................23
4.13 Suspension of Benefits............................................23
4.14 Pre-1984 Election.................................................23
4.15 Pre-Retirement Distribution.......................................23
4.16 Hardship Distribution.............................................23
4.17 Limitation for Qualified Domestic Relations Order.................24
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER.....................................26
5.01 Profit Sharing Contribution by Employer...........................26
5.02 Elective Contribution by Employer.................................26
5.03 Matching Contribution by Employer.................................26
5.04 Deduction of Employer Contributions...............................26
5.05 Limits on Elective and Matching Contributions.....................26
5.06 Special Employer Contributions....................................28
5.07 Correction of Excess Elective Contributions.......................28
5.08 Correction of Excess Employer Matching Contributions .............28
5.09 Mistaken Contribution.............................................29
5.10 Plan and Trust Conditioned on Approval and Qualification..........29
5.11 Funding Policy....................................................30
ARTICLE VI - ELECTIVE CONTRIBUTIONS...........................................31
6.01 Amount of Contribution............................................31
6.02 Election Request..................................................31
6.03 Change of Rate....................................................31
6.04 Distributions from Elective Account...............................31
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS...........................33
7.01 Allocation of Profit Sharing Contribution.........................33
7.02 Allocation of Elective Contributions..............................34
7.03 Allocation of Matching Contribution...............................34
7.04 Allocation of Forfeitures.........................................34
7.05 Amendment of Allocation Eligibility...............................34
7.06 Maximum Additions to Participant's Account........................35
7.07 Date of Allocation to Accounts....................................36
7.08 Expenses of Plan..................................................37
</TABLE>
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<PAGE> 5
<TABLE>
<S> <C>
7.09 Participant Direction of Investment...............................37
7.10 Periodic Adjustments to Account...................................37
ARTICLE VIII - TOP HEAVY PROVISIONS...........................................39
8.01 When Provisions Effective.........................................39
8.02 Determination of Top Heavy........................................39
8.03 Minimum Benefits..................................................40
ARTICLE IX - PORTABILITY OF ACCOUNT...........................................41
9.01 Transfers to Another Qualified Plan...............................41
9.02 Eligible Rollover Distributions...................................41
9.03 Transfers to this Plan............................................42
ARTICLE X - PLAN ADMINISTRATOR................................................43
10.01 Appointment of Plan Administrator.................................43
10.02 Duties of Plan Administrator......................................43
10.03 Decisions of Plan Administrator and Indemnification...............44
10.04 Instructions to Trustee...........................................44
10.05 Claims Procedure..................................................44
10.06 Delegating Responsibility.........................................44
ARTICLE XI - MISCELLANEOUS....................................................46
11.01 Right to Terminate................................................46
11.02 Plan Voluntary on Part of Employer................................46
11.03 Benefits Not Subject to Creditors' Claim..........................46
11.04 Trust Agreement...................................................46
11.05 Assets for Exclusive Benefits to Participants.....................46
11.06 Nonguarantee of Employment........................................47
11.07 Amendment.........................................................47
11.08 Acts by Trustee...................................................47
11.09 Laws of Kentucky..................................................47
11.10 Distribution to Minor or Incompetent Beneficiary..................47
11.11 Construction......................................................47
11.12 Merger or Consolidation...........................................47
11.13 Discretionary Action..............................................48
11.14 Lost Beneficiaries; Escheat.......................................48
11.15 Participating Employers...........................................48
ARTICLE XII - SIGNATURES......................................................50
</TABLE>
iii
<PAGE> 6
ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Elective Account. The separate Account established and
maintained on behalf of the Participant to which shall be credited the Elective
Contributions and the Special Employer Contributions (if any), made by the
Employer on behalf of the Participant, and the share of the net gains or losses
of the Trust attributable to such contributions. The Elective Account shall be
fully vested and nonforfeitable at all times.
(b) Matching Account. The separate Account established and
maintained on behalf of a Participant to which shall be credited the
Participant's share of Employer Matching Contributions and the share of the net
gains or losses of the Trust attributable to such contributions. The Matching
Contribution Account shall be subject to the vesting provisions of Article III.
(c) Profit Sharing Account. The separate Account established
and maintained on behalf of a Participant to which shall be credited the
Participant's share of Employer Profit Sharing Contributions and the share of
the net gains or losses of the Trust attributable to such contributions. The
Profit Sharing Contribution Account shall be subject to the vesting provisions
of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, effective December 1, 1994, the Accounting Date shall be the last
day of each calendar quarter. Prior to that date, the Accounting Date was the
last day of the Plan Year.
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements of Section 4.05, then the Beneficiary shall be the
person(s) in the first
1
<PAGE> 7
of the following classes surviving at the death of the Participant: (i) widow or
widower, or (ii) the Participant's estate.
A Beneficiary designation may be changed by submitting a new notice to
the Plan Administrator. Such a notice is not effective until the Plan
Administrator actually receives it.
1.05 Break in Service. A twelve consecutive month computation period
during which an Employee does not complete more than five hundred (500) Hours of
Service.
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. In any case in which hours normally credited
cannot be determined, the Employee receives credit for eight (8) Hours of
Service per day of absence, for a maximum of five hundred-one (501) Hours of
Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year to which the Employer
contribution relates. Amounts contributed by the Employer under the Plan and any
nontaxable fringe benefits shall not be considered Compensation.
Compensation in excess of $200,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d). If the aggregate Compensation of the "Family Group"
exceeds $200,000, (as indexed), the Compensation considered under the Plan for
each Family Group member is proportionately reduced so the total
2
<PAGE> 8
equals $200,000 (as indexed) (except for purposes of determining the portion of
Compensation up to the integration level, if this Plan provides for permitted
disparity). "Family Group" includes a Participant who owns more than 5% interest
in any entity comprising the Employer or is one of ten Highly Compensated
Employees paid the greatest Compensation during the Plan Year, and the
Participant's Spouse or children under age 19 (who are Participants at the close
of the period used to compute Compensation).
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for increases in
the cost of living in accordance with Section 401 (a) 17 (B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the numerator of which is
the number of months in the determination period, and the denominator of which
is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401 (a) (17) of the Code shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Employee. Any person employed by the Employer. Employee shall also
include any person employed by Jekel Vinyards, effective May 1, 1994. However,
the term Employee excludes the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided that (i) retirement benefits
were the subject of good faith bargaining between the employee
representatives and the Employer; and (ii) the collective bargaining
agreement does not expressly provide that the employee is eligible for
initial or continued participation in the Plan; or
(b) any person employed as an independent contractor;
3
<PAGE> 9
1.09 Employer. Fetzer Vineyards or its successor(s)and any Affiliated
Employer which elects to become a party to the Plan, with the approval of the
Brown-Forman Corporation, by adopting the Plan for the benefit of its eligible
Employees.
1.10 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.11 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to section 415(d) of the Code); (ii) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received Compensation during such year that is
greater than 50 percent of the dollar limitation in effect under section
415(b)(1)(A) of the Code. The term highly compensated employee also includes:
(i) employees who are both described in the preceding sentence if the term
"determination Year is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
employer during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former employee or
a highly compensated employee who is one of the 10 most highly compensated
employees who is ranked on the basis of Compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
4
<PAGE> 10
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants.
1.12 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hour of
Service is credited no more than once to a single Employee, even though it may
fall within more than one of categories (i), (ii) and (iii) of the preceding
sentence.
Notwithstanding the above provisions, (i) no more than five hundred one
(501) Hours of Service will be credited to an Employee for any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) Hours of Service are not credited
for hours for which an Employee is directly or indirectly paid, or entitled to
payment, for a period during which no duties are performed if such payment is
made or due under a plan maintained solely to comply with applicable worker's
compensation, or unemployment compensation or disability insurance laws; (iii)
Hours of Service are not credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee; and
(iv) Hours of Service are not credited to an Employee for payments made by this
Plan or any other pension or profit sharing plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with ten (10)
Hours of Service for each day for which the Employee is required to be credited
with at least one (1) Hour of Service under this Section; or forty-five (45)
Hours of Service for each week for which the Employee is required to be credited
with at least one (1) Hour of Service under this Section.
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
5
<PAGE> 11
1.13 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.14 Normal Retirement Age. A Participant's 65th birthday.
1.15 Plan Year. January 1 to December 31, the accounting year of the
Plan.
1.16 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.17 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury
(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
6
<PAGE> 12
1.17 Year of Service. A Year of Service is a 12-consecutive month
period (computation period) during which an Employee completes at least 1000
Hours of Service. To determine Years of Service and Breaks in Service the
computation periods shall be the following:
(a) For purposes of determining eligibility to participate, the
computation period shall begin on the date the Employee first
performs an Hour of Service for the Employer (employment
commencement date).
After the initial eligibility computation period, the
computation period shall shift to the Plan Year which includes
the first anniversary of the employment commencement date. An
Employee who completes 1000 Hours of Service in both the
initial computation period and the Plan Year which includes
the first anniversary of the employment commencement date,
shall be credited with two (2) Years of Service for purposes
of eligibility.
(b) For purposes of determining an employee's vested percentage in
the account balance derived from Employer contributions, the
computation period shall be the Plan Year.
7
<PAGE> 13
ARTICLE II - PARTICIPATION
2.01 Eligibility. An Employee becomes a Participant as of the first day
of the calendar quarter coinciding with or next following the date the Employee
completes a Year of Service with the Employer and attains age 21.
Participants in the Plan as of the effective date of this amendment and
restatement shall continue to participate in the Plan.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. This
section, however, is subject to and limited by the provisions of Sections 1.10
and 11.15.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees. If the employee incurs a Break in Service, eligibility will be
determined under the Break in Service rules of this Plan.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
8
<PAGE> 14
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
9
<PAGE> 15
ARTICLE III - VESTING
3.01 Elective Account Fully Vested. A Participant's Elective Account is
fully vested at all times.
3.02 Vesting of Other Accounts. A Participant's Profit Sharing Account
and Matching Account are fully vested upon the first of the following events to
occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's attaining Early Retirement Age (age
55) and completion of six (6) years of employment;
(c) The Participant's Total and Permanent Disability;
(d) The Participant's death.
3.03 Credit for Vesting when Eligibility Computation Period Overlaps
Vesting Computation Period. If an Employee's eligibility computation period for
a Plan requiring one Year of Service for eligibility:
(a) overlaps two vesting computation periods, and
(b) the Employee completes 1,000 Hours of Service in the
eligibility computation period, but fails to complete the
1,000 Hours of Service in either of the overlapped vesting
computation periods, and
(c) the Employee becomes a Participant,
then the Year of Service completed for eligibility
purposes is also a Year of Service for vesting purposes at
the time the Employee becomes a Participant.
3.04 Vesting Schedule. The vested portion of a Participant's Profit
Sharing Account and Matching Account prior to the occurrence of an event stated
in Section 3.02 is a percentage of such Account determined on the basis of Years
of Service according to the following schedule:
10
<PAGE> 16
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 2 years 0%
2 years but less than 3 20%
3 years but less than 4 40%
4 years but less than 5 60%
5 years but less than 6 80%
6 years or more 100%
</TABLE>
3.05 Effect of Break in Service on Vesting. For purposes of vesting,
service will not be disregarded because of a Break in Service.
3.06 Service Disregarded. In determining Years of Service for purposes
of vesting, service before an Employee attains age 18 shall be disregarded.
3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
11
<PAGE> 17
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan Administrator.
12
<PAGE> 18
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant and the Participant's Spouse (or, where either
has died, the survivor) must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the
Annuity Starting Date (the first day of the first period for which an amount is
payable as an annuity or any other form).
Spousal consent shall not be required if distribution is in the form of
a Qualified Joint and Survivor Annuity. Further, no consent shall be required if
a distribution is required to satisfy Code section 401(a)(9) or 415. In
addition, upon termination of the Plan if the Plan does not offer the option of
a commercial annuity, the Participant's account balance may, without the
Participant's consent, be distributed to the Participant or transferred to
another defined contribution plan (other than an employee stock ownership plan
under Code section 4975(e)(7)) within the same controlled group.
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of Normal Retirement Age or age 62.
Absent the required consent to receive benefits in excess of $3,500,
distribution of benefits shall begin no sooner than the later of age 62 or
Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
as soon as administratively feasible in a single lump
13
<PAGE> 19
sum without the need for consent of the Participant or Spouse. For purposes of
this Section, if the value of a Participant's vested account balance is zero,
the Participant shall be deemed to have received a distribution of such vested
account balance.
4.03 Early Retirement Distribution. A terminated Participant shall be
entitled to an early retirement distribution upon attaining age 55 and
completion of at least six (6) years of employment with the Employer. The early
retirement distribution shall be payable in accordance with the terms of this
Article IV and shall be equal to the Participant's vested Account balance valued
as of the Accounting Date coincident with or immediately preceding the date of
distribution. If the Participant has no vested Account balance, there will be no
early retirement distribution.
4.04 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods:
(a) Automatic Form of Payment of Retirement Benefits. Unless
the Participant elects otherwise as provided below, distribution of a
Participant's benefits will be made to the Participant by one of the
following methods, as applicable:
(i) Joint and Survivor Annuity. A Participant who is
married on the Annuity Starting Date shall receive the value
of the benefits in the form of a Joint and Survivor Annuity.
The Joint and Survivor Annuity shall be the actuarial
equivalent of a single life annuity. Such Joint and Survivor
benefits following the Participant's death shall continue to
the Spouse during the Spouse's lifetime at a rate equal to
fifty percent (50%) of the rate at which such benefits were
payable to the Participant. However, the Participant may elect
to receive a smaller annuity benefit with continuation of
payments to the Spouse at sixty-six and two-thirds percent (66
2/3%) or one hundred percent (100%) of the rate which such
benefits were payable to the Participant, which alternative
joint and survivor annuity shall equal in value the automatic
Joint and Survivor Annuity.
A Joint and Survivor Annuity will not be provided unless
the Participant and Spouse have been married the entire 1-year
period ending on the earlier of (1) the Annuity Starting Date,
or (2) the Participant's death. However, if a Participant
marries within 1 year before the Annuity Starting Date and
such marriage continues for at least a 1 year period ending on
or before the Participant's death, then the Participant and
such Spouse must be treated as having been married for 1 year
prior to the Annuity Starting Date.
(ii) Single Life Annuity. A Participant who is not
married on the Annuity Starting Date shall receive benefits in
the form of a Single Life Annuity.
(b) Optional Form of Payment of Retirement Benefits. If a
Participant duly elects pursuant to Section 4.05 to waive the Joint and
Survivor Annuity or Single Life Annuity, as
14
<PAGE> 20
applicable, distribution of a Participant's benefits will be made to
the Participant or Beneficiary by one of the following methods, as
elected by the Participant:
(i) By lump-sum payment in cash;
(ii) Payments may be made over a period not extending
beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's
Beneficiary;
(iii) Purchase of or providing an annuity in the form
of a straight life annuity; a single life annuity with periods
certain of five, ten or fifteen years; a single life annuity
with installment refund; or a fixed period annuity over a
period not extending beyond either the life or life expectancy
of the Participant or the Participant and designated
Beneficiary.
4.05 Election to Waive Joint and Survivor Annuity and Single Life
Annuity.
(a) Election and Spousal Consent. An election to waive the
Joint and Survivor Annuity must be made by the Participant in writing
during the Election Period and be consented to by the Participant's
Spouse. Such election shall designate a Beneficiary or a form of
benefits that may not be changed without spousal consent (unless the
original consent acknowledged the Spouse's right to limit consent to a
specific Beneficiary or form of benefits and the Spouse voluntarily
chose to relinquish one or both of such rights). Such Spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Plan Administrator that the required consent cannot be obtained
because there is no Spouse, or the Spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election made
by the Participant and consented to by the Spouse may be revoked by the
Participant in writing without the consent of the Spouse at any time
during the Election Period. The number of revocations shall not be
limited. Any new election must comply with the requirements of this
Section. A former Spouse's waiver shall not be binding on a new Spouse.
(b) Election Period. For purposes of this Section, the
Election Period to waive the Joint and Survivor Annuity shall be the
ninety (90) day period ending on the Annuity Starting Date.
(c) Notice Period. With regard to the election, the Plan
Administrator shall provide the Participant a written explanation no
less than 30 and no more than 90 days before the Annuity Starting Date
containing:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
15
<PAGE> 21
(ii) the Participant's right to make and the effect
of an election to waive the Joint and Survivor Annuity, and
(iii) the rights of the Participant's Spouse, and
(iv) the right of the Participant to revoke such
election and the effect of such revocation.
(v) the relative values of the various optional
forms of benefits under the Plan.
(d) Election to Waive Single Life Annuity. An unmarried
Participant may elect to waive the Single Life Annuity form of payment
by complying with the provisions of this Section as if electing to
waive the Joint and Survivor Annuity, but without the spousal consent
requirements.
4.06 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts shall be paid to or for the
benefit of the Participant's Beneficiary by any of the following methods, as
elected by the Participant or the Beneficiary:
(a) Continuation of Payments Already Commenced. If
distributions have commenced before the Participant's death, payments
may be continued to the Participant's Beneficiary at least as rapidly
as under the method selected by the Participant as of the date of
death.
(b) Single Payment. If the Participant dies before
distributions have commenced payment may be in a single lump sum in
cash on or before the last day of the calendar year in which the fifth
anniversary of death occurs.
(c) Installment Payments. If the Participant dies before
distributions have commenced payments may be made in annual or more
frequent installments not extending beyond the last day of the calendar
year in which the fifth anniversary of death occurs.
(i) The 5-year distribution requirement of this
subsection (c) shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit
of a designated Beneficiary. In such event, at the election of
the Beneficiary such portion may be distributed over a period
not extending beyond the life or life expectancy of such
designated Beneficiary, provided such distribution begins not
later than the last day of the calendar year following the
year of the Participant's death.
16
<PAGE> 22
(ii) Except, however, if the Participant's Spouse is
the designated Beneficiary, the requirement that distributions
commence within one year of the Participant's death shall not
apply. In lieu thereof, at the Spouse's election,
distributions may commence no later than the last day of the
calendar year in which the deceased Participant would have
attained age seventy and one-half (70-1/2). If the Surviving
Spouse dies before the distributions to such Spouse begin,
then the 5-year distribution requirement of this subsection
(c) shall apply as if the Spouse were the Participant.
(iii) For purposes of this Subsection (c), a
Beneficiary's election to be excepted from the 5-year
distribution requirement must be made by the last day of the
calendar year following the year of death. Except, however, if
the Beneficiary is the Spouse, the election must be made by
the earlier of (i) the last day of the calendar year following
the year of death, or, if later the year in which the
Participant would have attained 70-1/2, or (ii) the last day
of the calendar year which contains the fifth anniversary of
the Participant's death. Absent a written election by a
Beneficiary or the Participant, the 5-year distribution
requirement shall apply.
4.07 Payment Upon Death of a Participant.
(a) Pre-Retirement Survivor Annuity. Other than an annuity
payable pursuant to Section 4.04, if a Participant dies before having
received the entire vested balance of that Participant's benefits and
has a Surviving Spouse, such remaining vested balance, plus the
proceeds of any insurance on the life of the Participant held in the
Participant's Accounts, shall be paid to or for the benefit of the
Participant's Spouse in the form of a Pre-Retirement Survivor Annuity,
unless the Participant has elected to waive the annuity pursuant to
Section 4.08. Payment of such annuity shall commence within a
reasonable time after the Participant's death unless the Spouse elects
a later commencement date. However, payment must commence on or before
the later of (i) the last day of the calendar year following the year
of the Participant's death, or (ii) the last day of the year in which
the Participant would have attained age 70-1/2.
(b) Optional Forms. If a Participant's death benefit is not
paid in the form of a Pre-Retirement Survivor Annuity, distribution of
the Participant's death benefits shall be paid by one of the following
methods as elected by the Participant or Beneficiary:
(i) Continuation of Payments Already Commenced. If
distributions have commenced before the Participant's death,
payments may be continued to the Participant's Beneficiary at
least as rapidly as under the method selected by the
Participant as of the date of death.
17
<PAGE> 23
(ii) Single Payment. If the Participant dies before
distributions have commenced payment may be in a single lump
sum in cash on or before the last day of the calendar year in
which the fifth anniversary of death occurs.
(iii) Installment Payments. If the Participant dies
before distributions have commenced payments may be in annual
or more frequent installments not extending beyond the last
day of the calendar year in which the fifth anniversary of
death occurs.
(A) The 5-year distribution requirement of
this subsection shall not apply to any portion of the
deceased Participant's interest which is payable to
or for the benefit of a designated Beneficiary. In
such event, at the election of the Beneficiary, such
portion may be distributed over a period not
extending beyond the life or life expectancy of such
designated Beneficiary, provided such distribution
begins not later than the last day of the calendar
year following the year of the Participant's death.
(B) Except, however, if the Participant's
Spouse is the designated Beneficiary, the requirement
that distributions commence within one year of the
Participant's death shall not apply. In lieu thereof,
at the Spouse's election, distributions may commence
no later than the last day of the calendar year in
which the Participant would have attained age seventy
and one-half (70-1/2). If the Surviving Spouse dies
before the distributions to such Spouse begin, then
the 5-year distribution requirement of this
subsection shall apply as if the Spouse were the
Participant.
(C) For purposes of this subsection, a
Beneficiary's election to be excepted from the 5-year
distribution requirement must be made by the last day
of the calendar year following the year of death.
Except, however, if the Beneficiary is the Spouse,
the election must be made by the earlier of (i) the
last day of the calendar year following the year of
the Participant's death or, if later, the year in
which the Participant would have attained age 70-1/2,
or (ii) the last day of the calendar year which
contains the fifth anniversary of the Participant's
death. Absent a written election by a Beneficiary or
the Participant, the 5-year distribution requirement
shall apply.
4.08 Election to Waive Pre-Retirement Survivor Annuity. Any election to
waive the Pre-Retirement Survivor Annuity before the Participant's death must
be made by the Participant in writing during the Election Period and shall
require the Spouse's irrevocable consent in the same manner provided for in
Section 4.05. Further, the Spouse's consent must acknowledge the specific
nonspouse Beneficiary or the alternative form of death benefit to be paid in
lieu of the Pre-Retirement Survivor Annuity (unless the consent of the Spouse
acknowledges that the Spouse has
18
<PAGE> 24
the right to limit consent only to a specific Beneficiary or a specific form of
benefit and that the Spouse voluntarily elects to relinquish one or both of such
rights.)
(a) The Election Period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age thirty-five (35) and end on the date of the
Participant's death. In the event a vested Participant separates from
service prior to the beginning of the Election Period, the Election
Period shall begin on the date of such separation from service.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special qualified election
to waive the Pre-Retirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall
not be valid unless the Participant receives a written explanation of
the Pre-Retirement Survivor Annuity in such terms as are described
below. Pre-Retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
participant attains age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Section.
(b) With regard to the election, the Plan Administrator shall
provide each Participant within the "applicable period", with respect
to such Participant (and consistent with regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 4.05. The
term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(i) The period beginning with the first day of the
Plan Year in which the Participant attains age thirty-two (32)
and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age thirty-five (35);
(ii) A reasonable period ending after the individual
becomes a Participant. For this purpose, in the case of an
individual who becomes a Participant after age thirty-two
(32), the explanation must be provided by the end of the
three-year period beginning with the first day of the first
Plan Year for which the individual is a Participant;
(iii) A reasonable period ending after the Plan no
longer fully subsidizes the Pre-Retirement Survivor Annuity
with respect to the Participant;
(iv) A reasonable period ending after Code section
401(a)(11) applies to the Participant; or
(v) A reasonable period after separation from
service in the case of a Participant who separates before
attaining age thirty-five (35). For this purpose, the
19
<PAGE> 25
Plan Administrator must provide the explanation at the time
of separation or within one year after separation.
4.09 Minimum Amounts to be Distributed. Notwithstanding any provisions
to the contrary, all distributions required under this Article IV shall comply
with Code section 401(a)(9) and the proposed regulations thereunder, including
the minimum distribution incidental benefit requirement of Regulation
1.401(a)(9)-2.
4.10 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required
to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount available
for distribution is paid within the life expectancy of the
Participant.
(iii) For calendar years beginning after December 31,
1988, the amount to be distributed each year shall not be less
than the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life expectancy or
(2) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant
shall be distributed using the applicable life expectancy in
subsection (i) above as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2.
20
<PAGE> 26
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(v) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
4.11 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case of any Participant who has incurred five (5) or more
consecutive Breaks in Service (Five Year Break in Service) prior to the
resumption of employment with the Employer, the non-vested portion of
such terminated Participant's benefits, and all regular periodic
adjustments thereto, shall be deemed forfeited and shall be added to
the Employer's contribution for the Plan Year within which the Five
Year Break in Service occurs. Upon such forfeiture, such terminated
Participant's Account shall be closed and if the vested Account balance
has not been paid to the Participant, the vested portion of such
Account shall be transferred to a separate Fully Vested Account for
such terminated Participant's benefit; provided, however, at such time
as the terminated Participant resumes employment with the Employer, an
additional separate Account shall be established for the Participant's
benefit as if the Participant were a new Participant, which Account
shall be maintained separate and distinct from the Participant's Fully
Vested Account, until such Account becomes fully vested at which time
the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's
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benefits shall be deemed forfeited and shall be allocated as of the
Accounting Date of the Plan Year of termination of a non-vested
Participant, or the Plan Year in which distribution to a vested
Participant is made, in accordance with subsection (a) as though a
Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the
denominator of which is the total value of the vested Employer derived
account balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's reemployment;
provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the Participant
is completed by the earlier of: (1) the last day of the Plan
Year within which the Participant has five consecutive Breaks
in Service or (2) five years after the Participant is
reemployed by the Employer. If a terminated Participant incurs
five consecutive Breaks in Service, repayment will not be
permitted.
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if previously
forfeited shall be reinstated (in cash or in kind as initially
forfeited) to constitute the opening balance of such
Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
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(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Notwithstanding any
contrary provision of the Plan, an Employer contribution may be made in order to
provide a source of restoration pursuant to subsection (d), even though the
Employer may have no net profits for the Plan Year in question. Restoration of a
forfeiture pursuant to this subsection (e) shall in all events be completed by
the Accounting Date of the Plan Year next following the Plan Year within which
the repayment is completed.
4.12 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.13 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
4.14 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982, and if the Participant filed such election in a timely manner with the
Plan Administrator, said election shall be effective unless and until revoked by
the Participant. If an election is revoked any subsequent distributions must
meet the requirements of this Article IV.
4.15 Pre-Retirement Distribution. A Participant who has been a
Participant for at least two years and who attains age 59 1/2 may elect to
receive a distribution of the entire amount credited to such Participant's
Accounts, or a portion thereof. However, no distribution shall occur prior to
100% vesting. A Participant who receives such a distribution shall continue to
participate in the Plan. Any such distribution shall be made in a manner
consistent with Article IV including all notice and consent requirements.
Notwithstanding the above, no pre-retirement distribution shall be
permitted from a Participant's Elective Account prior to the Participant's
attaining age 59 1/2, except as otherwise permitted under the Plan.
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<PAGE> 29
4.16 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for Special Employer Contributions and earnings
credited to the Participant's Elective Account after December 31, 1988)
of an amount necessary to satisfy the Participant's immediate and heavy
financial need where the Participant lacks other available resources on
account of:
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household
or other dependent,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
No hardship distribution shall exceed the vested portion of a
Participant's Account determined as of the most recent Accounting Date. Such a
distribution is deemed made as of the first day of the Plan Year, or if later,
the most recent Accounting Date, and the Participant's Account(s) shall be
reduced accordingly. Any distribution shall be made in a manner consistent with
Article IV, including all notice and consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(ii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iii) The distribution shall not exceed the amount of
the financial need.
(iv) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
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(v) The Participant's Elective Contributions and
Voluntary Contributions under all plans of the Employer shall
be suspended for twelve (12) months after receipt of the
hardship distribution.
(vi) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.17 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may be
charged against and paid from the Accounts of the Participant named in the
order.
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ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Profit Sharing Contribution by Employer. Each Plan Year the
Employer shall contribute to the Trust such amount in cash in or in kind as may
be determined by the Employer (Profit Sharing Contribution). The contributions
made pursuant to this Section shall be credited to the Profit Sharing Account of
eligible Participants in accordance with Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. The amount of
the Matching Contribution shall be equal to 50% of the Participant's Elective
Contribution. Except, however, in applying the matching percentage only
Participant Elective Contributions up to 5% of Compensation shall be considered.
The Matching Contribution shall be credited to the Matching Account of eligible
Participant's in accordance with Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the Employer provided the return is
accomplished within one (1) year after the disallowance of the deduction.
5.05 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
For Plan Years beginning after December 31, 1988, to prevent the
multiple use of the tests in this subsection (b), if a Highly Compensated
Participant is eligible to make elective deferrals pursuant to any cash or
deferred arrangement maintained by the Employer or an Affiliated Employer,
26
<PAGE> 32
or to make Employee contributions or receive matching contributions under this
or any other plan maintained by the Employer or an Affiliated Employer, such
Participant's Actual Contribution Percentage shall be reduced pursuant to
Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year by the
Participant's Compensation for such Plan Year. The ADP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ADPs of each eligible Participant in the group, calculated to the
nearest one-hundredth of one percent. Elective Contributions allocated to
non-Highly Compensated Participants shall not include Excess Deferrals
(determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions and Voluntary Contributions
(including Excess Contributions recharacterized as Voluntary Contributions) for
the Plan Year by the Participant's Compensation for such Plan Year. The ACP for
each group ((i) Highly Compensated Employees and (ii) non-Highly Compensated
Employees) is the average of the ACPs of each eligible Participant in the group
calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
For purposes of determining the ADP and ACP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated Employees,
the Elective Contributions, Matching Contributions, Voluntary Contributions and
Compensation of such Participant shall include the Elective Contributions,
Matching Contribution, Voluntary Contribution and Compensation of "family
members" (as defined in Code section 414(q)(6)), and the family group shall be
treated as one Highly Compensated Participant. Family members shall be
disregarded for purposes of determining the ADP and ACP of the group of
non-Highly Compensated Participants.
If a Highly Compensated Participant is a Participant under 2 or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions, Matching Contributions or Voluntary Contributions are made, such
contributions on behalf of such Highly Compensated Participant shall be
aggregated in determining the ADP and ACP of such Participant. For Plan Years
beginning after December 31, 1988, if the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. For Plan Years beginning after December 31,
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<PAGE> 33
1989, plans may be aggregated to satisfy Code section 401(k) and 401(m) only if
they have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the end of
the Plan Year the Employer may contribute to the Trust a discretionary Special
Employer Contribution which shall be allocated to the Elective Accounts of
non-Highly Compensated Participants to the extent necessary to meet the
nondiscrimination tests specified in Section 5.05.
Special Employer Contributions shall be allocated to eligible
non-Highly Compensated Participants in the proportion that the Compensation for
such Participant bears to the Compensation for all such Participants.
Such Special Employer Contributions, if any, shall not be considered
Elective Contributions for purposes of matching pursuant to Section 5.03. If
Special Contributions are made for purposes of satisfying the ACP test, a
separate accounting shall be maintained within the Participant's Elective
Account for purposes of excluding such contributions from the ADP test.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.05, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest ADP such Participant's excess amounts ("Excess Contributions") and
income allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ADP equals
the ADP of the Highly Compensated Participant having the second highest ADP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Contributions for a Highly Compensated Participant is then
equal to the total of elective and other contributions taken into account for
the ADP test, minus the product of the employee's ADP (as determined after
application of this Section) and the employee's compensation used in determining
that ratio. The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by any previous distribution of Excess
Deferrals (pursuant to Section 6.01) for the employee's taxable year ending in
the same Plan Year.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution shall be made first from unmatched Elective Contributions,
and then simultaneously from matched Elective Contributions and Matching
Contributions which relate to such Elective Contributions. However, any such
Matching Contributions which are not vested shall be forfeited in lieu of
distribution.
Correction of Excess Contributions of a Highly Compensated Participant
whose ADP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(k)-1(f)(5)(ii).
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<PAGE> 34
5.08 Correction of Excess Employer Matching Contributions . If the
amount of Matching Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.05, the
Plan Administrator shall distribute to the Highly Compensated Participant having
the highest ACP such Participant's excess amounts ("Excess Aggregate
Contributions") and income allocable thereto (determined under applicable
regulations) until the nondiscrimination tests are satisfied, or until such
Participant's ACP equals the ACP of the Highly Compensated Participant having
the second highest ACP. This process shall continue until the nondiscrimination
tests are satisfied. The amount of Excess Aggregate Contributions for a Highly
Compensated Employee is then equal to the total of voluntary, matching and other
contributions taken into account for the ACP test, minus the product of the
Employee's ACP (as determined after application of this Section) and the
Employee's Compensation used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07;
(b) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
The determination of Excess Aggregate Contributions for any Plan Year
shall be made after first determining the amount of any Excess Contributions to
be recharacterized as Voluntary Contributions for the Plan Year of the Plan
subject to Code section 401(k) ending with or within the Plan Year of this Plan.
Correction of Excess Aggregate Contributions of a Highly Compensated Participant
whose ACP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(m)-1(e)(2)(iii).
5.09 Mistaken Contribution. In the case of a contribution which is made
by the Employer by a mistake of fact, such contribution may be returned to the
Employer within one (1) year after the payment of the contribution.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service
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<PAGE> 35
rules that such Plan is not qualified, the Employer reserves the right to
recover contributions which were made prior to a final ruling from the Internal
Revenue Service with respect to the initial determination as to qualification of
the Plan and Trust. Any contribution of the Employer shall be returned to the
Employer within one (1) year after the date of the final ruling with respect to
the denial of initial qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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<PAGE> 36
ARTICLE VI - ELECTIVE CONTRIBUTIONS
6.01 Amount of Contribution. Each Participant may elect to defer his or
her Compensation and have the Employer make an Elective Contribution to the
Trust on behalf of the Participant. Elective Contributions may be an amount
between one percent (1%) and fifteen percent (15%) (in increments of 1%) of the
Participant's Compensation for the Plan Year in question, but shall not exceed
$7,979 (adjusted pursuant to the method provided in Code section 415(d)) for the
Participant's taxable year. The Plan Administrator may fix lower maximums for
Highly Compensated Employees to satisfy the nondiscrimination tests of Section
5.05.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.07 for the Plan
Year beginning within the Participant's taxable year.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) quarterly by
notifying the Plan Administrator. However, a Participant may elect to
prospectively revoke the Participant's Election Request in its entirety at any
time during the Plan Year upon 10 days notice to the Plan Administrator (or upon
such shorter notice as is acceptable to the Plan Administrator).
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, separation from service, or attainment of age 59 1/2;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such
31
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corporation if the Participant continues employment with the
corporation acquiring such assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to
Section 4.16; or
(vi) pursuant to Sections 6.01 and 5.07 (Correction of Excess
Elective Contributions).
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Profit Sharing Contribution. The Employer
contribution shall be allocated to the Profit Sharing Accounts of all eligible
Participants covered by the Plan as of the Accounting Date of the Plan, in the
following manner:
(a) An amount equal to 5.7% multiplied by the sum of each
Participant's total Compensation plus Excess Compensation shall be
allocated to each Participant's Profit Sharing Account. If the Employer
does not contribute such amount, each Participant shall be allocated a
share of the contribution in the same proportion that such
Participant's total Compensation plus Excess Compensation bears to the
total Compensation plus Excess Compensation of all Participants.
(b) The balance of the Employer's contribution over the amount
allocated in (a), if any, shall be allocated to each Participant's
Profit Sharing Account in the proportion that each Participant's
Compensation bears to the total Compensation of all Participants for
the Plan Year.
Notwithstanding the foregoing, if the Plan is top heavy pursuant to
Article VIII, a minimum contribution must be provided by the Employer
contribution and/or forfeitures (if any) to the Profit Sharing Account of all
non-Key Participants equal to the lesser of (1) 3% of Compensation, or (2) the
largest percentage of Employer contribution and/or forfeitures (if any)
allocated to the Accounts of a Key Employee (including salary deferral amounts).
Such minimum contribution must be allocated to the Account of all non-Key
Participants who are employed by the Employer on the Accounting Date, regardless
of the number of Hours of Service credited during the Plan Year to which the
contribution relates, regardless of whether or not such Participant makes
nonelective contributions for the Plan Year to which the contribution relates,
and regardless of such Participant's level of compensation.
If the Employer maintains one or more other qualified defined
contribution plans that are a part of a Required or Permissive Aggregation Group
the minimum benefit for non-Key Employees may be provided in any one of the
plans, or may be satisfied by aggregating the contributions made in all of the
aggregated defined contribution plans of the Employer (not including Elective
Contributions or Matching Contributions needed to satisfy the ADP or ACP tests,
for Plan Years beginning after December 31, 1988).
"Excess Compensation" means the portion of a Participant's Compensation
which is in excess of the Social Security taxable wage base in effect on the
first day of the Plan Year.
Participants shall be eligible to receive a portion of the Employer
Profit Sharing Contribution (other than the minimum contribution) only if they
complete 1,000 Hours of Service during the Plan Year and are employed on the
Accounting Date to which the contribution relates where termination
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is for reasons other than death, retirement after reaching Normal Retirement
Age, or Total and Permanent Disability.
7.02 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Account of such
Participant in the same manner as the contribution is determined pursuant to
Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated on a monthly basis to the Matching
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.03.
Participants shall be eligible to receive a Matching Contribution only
if they have made elective contributions for the calendar quarter to which the
employer matching contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be added to the Employer's contribution and allocated in the
same manner as the Employer's contribution for the current year.
7.05 Amendment of Allocation Eligibility. Notwithstanding anything to
the contrary, for Plan Years beginning after December 31, 1989, if this is a
Plan that would otherwise fail to meet the requirements of Code sections
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules shall
apply:
(a) The group of Participants eligible to share in the
Employer's contribution and forfeitures for the Plan Year shall be
expanded to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable test
specified above. The specific Participants who shall become eligible
under the terms of this paragraph shall be those who are actively
employed on the last day of the Plan Year and, when compared to
similarly situated Participants, have completed the greatest number of
Hours of Service in the Plan Year.
(b) If after application of paragraph (a) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and forfeitures for
the Plan Year shall be further expanded to include the minimum number
of Participants who are not actively employed on the last day of the
Plan Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
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(c) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
7.06 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Fiscal Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Fiscal Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any voluntary contributions credited for the
Limitation Year to the extent the return would reduce the excess amount
in the Participant's Accounts;
(b) Hold any remaining excess after the return of voluntary
contributions in the Participant's Account to be used to reduce
Employer contributions (including allocation of forfeitures) in the
next Limitation Year and succeeding years if necessary, and
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and
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applied to reduce Employer contributions for all remaining
Participant's in the next Limitation Year (and succeeding years if
necessary) before any Employer or Employee contributions may be made
to the Plan for that Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
For Limitation Years beginning after December 31, 1988, compensation
shall be limited to $200,000 as adjusted in the same manner as permitted under
Code section 415(d).
7.07 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
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7.08 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.09 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction
from each Participant on a written election form (or other written
agreement), as a part of this Plan containing such conditions,
limitations and other provisions the parties deem appropriate. The
Trustee or, with the Trustee's consent, the Plan Administrator, may
establish written procedures, incorporated specifically as part of this
Plan, relating to Participant direction of investment under this
Section 7.09.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant
self-direction. Each such segregated investment Account shall be
adjusted with the earnings, losses and expenses attributable to said
Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are
relieved of fiduciary responsibility or liability for any losses
resulting from a Participant's direction of the investment of any part
of the Participant's directed Accounts.
7.10 Periodic Adjustments to Account. The Account(s) held in trust for the
benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
(i) The fair market value of the Trust (other than
segregated accounts and insurance company contracts) on the
current Accounting Date as of which the
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calculation is made, excluding the Employer's contribution and
all voluntary contributions of Participants for the current
Accounting Date, less
(ii) The fair market value of the Trust (other than
segregated accounts and insurance company contracts) on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(iii) If Employer or employee contributions are made
during the year prior to the Accounting Date, equitable
adjustment may by made to the account balances for such
Participant for the preceding Accounting Date for the purpose
of approximating earnings on such contributions for the
current year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single payment to be
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions or forfeitures.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean
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compensation as defined in Code section 415(c)(3), but including amounts
contributed by the Employer pursuant to a salary reduction agreement which are
excludible from the employee's gross income under Code section 125, 402(a)(8),
402(h) or 403(b).
8.03 Minimum Benefits. The provisions of Article VIII notwithstanding,
a minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) the largest percentage of Employer contribution
and/or forfeitures allocated to the Account of a Key Employee. Such minimum
contribution must be allocated to the account of all non-Key Participants who
are employed by the Employer on the Accounting Date, regardless of the number of
Hours of Service credited during the Plan Year to which the contribution
relates, regardless of whether or not the Participant makes mandatory
contributions for the Plan Year to which the contribution relates, and
regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. This section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former
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employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, (ii) lump
sum distributions received by a former Participant of another qualified plan
which are eligible for tax free rollover and are rolled into this Plan within 60
days of receipt by such Participant, or (iii) amounts transferred from a conduit
individual retirement account and rolled into this Plan within 60 days of
receipt from such account.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans, are placed
in a segregated fully vested Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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ARTICLE X - PLAN ADMINISTRATOR
10.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
10.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
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<PAGE> 49
(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
10.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
10.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
10.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
10.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any
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such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The Trustee
shall have the right, in its sole discretion, by written instrument delivered
to the Plan Administrator, to reject and to refuse to exercise any such
delegated authority.
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ARTICLE XI - MISCELLANEOUS
11.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
11.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
11.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985. Any domestic relations order entered before January 1,
1985 will be treated as a qualified domestic relations order if payment of
benefits pursuant to the order has commenced as of such date, and may be treated
as a qualified domestic relations order if payment of benefits has not commenced
as of such date, even though the order does not satisfy the requirements of Code
section 414(p).
11.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is made a part hereof. The Trust and any income
therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
11.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used
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for purposes other than for the exclusive benefit of the Participants or their
Beneficiaries at any time prior to the satisfaction of all liabilities with
respect to Participants and their Beneficiaries under the Trust.
11.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
11.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
11.08 Acts by Trustee. The Employer shall not be responsible for any of
the acts of the Trustee.
11.09 Laws of Kentucky. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the laws of the Commonwealth of
Kentucky, to the extent such laws are not superseded by Federal law.
11.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
11.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
11.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
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11.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
11.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
11.15 Participating Employers.
(a) Adoption by Other Employers. With the consent of
Brown-Forman Corporation, any Affiliated Employer may adopt this Plan and all of
its provisions, participate in the Plan, and be known as a participating
Employer, by a properly executed document evidencing the intent and will of
Brown-Forman Corporation.
The aforementioned document may contain such specific changes
and variation in Plan terms and provisions applicable to such participant
Employer and its Employees as may be acceptable to the Plan Administrator.
However, the sole, exclusive right of termination of or of any other amendment
to the Plan, of whatever kind or extent, is reserved by Brown-Forman
Corporation. The aforementioned document becomes, as to such participant
Employer and its Employees, a part of this Plan as then amended or thereafter
amended. It is not necessary for the participating Employer to sign or execute
the original or then-amended Plan document. The coverage date for any such
participating Employer is the date stated in the aforementioned document. From
and after the effective date of coverage, the participating Employer shall
assume all the rights, obligations, and liabilities of an Employer under the
Plan. The administrative powers of and control by Brown-Forman Corporation, as
provided in the Plan, including the sole right to terminate or amend, and to
48
<PAGE> 54
appoint and remove the Plan Administrator, are not diminished by reason of the
participation of any participating Employer in the Plan.
(b) Withdrawal from the Plan. Any participating Employer, by
action of its governing authority, may withdraw from the Plan after giving 90
days advance notice to the Board of Directors of Brown-Forman Corporation,
provided the Board of Directors consents to such withdrawal.
(c) Action of a Single Employer. The term "Employer" refers to
all Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
49
<PAGE> 55
ARTICLE XII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 22nd day of December, 1994.
FETZER VINEYARDS
By: /s/ Milton B. Gillis
---------------------------------
MILTON B. GILLIS, Vice President
50
<PAGE> 56
CORRECTIVE AMENDMENT
FETZER VINEYARDS
PROFIT SHARING PLAN
A restated Profit Sharing Plan effective December 1, 1994 was adopted
by Fetzer Vineyards. The Plan provides in Article XI that the Plan may
be amended by an instrument in writing duly executed.
It is advisable to correctively amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.05 of Article I is correctively amended by deleting the
final paragraph of the section which is a duplicate of the immediately preceding
paragraph.
2. Section 1.09 of Article I is correctively amended by adding the
following provision:
Jekel Vineyards adopted the Plan as an additional Employer
effective May 1, 1994. The Plan Administrator will account
separately for each Employer's contributions under the Plan, will
allocate each Employer's contributions to the accounts of those
Participants actually employed by that Employer during the Plan
Year, and will attribute Participant forfeitures to the Employer
that actually employed the forfeited Participant in the year of
forfeiture.
In all other respects, the Fetzer Vineyards Profit Sharing Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Corrective Amendment
to the Fetzer Vineyards Profit Sharing Plan to be executed by its duly
authorized officer this 20th day of December, 1995.
FETZER VINEYARDS
By: /s/ Milton B. Gillis
---------------------------------
Milton B. Gillis, Vice-President
1
<PAGE> 57
FIRST AMENDMENT
FETZER VINEYARDS PROFIT SHARING PLAN
The restated Fetzer Vineyards Profit Sharing Plan was adopted by Fetzer
Vineyards effective December 1, 1994.
The Plan provides in Article XI that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 4.06 of Article IV is deleted in its entirety (duplicative
of Section 4.07), to be replaced as follows:
4.06 [Reserved.]
2. Section 4.04(a)(i) of Article IV is amended by adding a phrase at
the close of the second paragraph, effective January 1, 1997, said paragraph to
read in its amended form as follows:
A Joint and Survivor Annuity will not be provided unless the
Participant and Spouse have been married the entire 1-year period
ending on the earlier of (1) the Annuity Starting Date, or (2)
the Participant's death. However, if a Participant marries within
1 year before the Annuity Starting Date and such marriage continues
for at least a 1 year period ending on or before the Participant's
death, then the Participant and such Spouse must be treated as
having been married for 1 year prior to the Annuity Starting Date,
provided that the said Participant notifies the Plan Administrator
when the said Participant has been married for one year.
3. Section 4.07(a), Pre-Retirement Survivor Annuity, of Article IV is
correctively amended by adding the following paragraph:
1
<PAGE> 58
Notwithstanding the foregoing, a Pre-Retirement Survivor
Annuity will not be provided unless the Participant and Spouse
have been married the entire one-year period ending on the earlier
of (1) the Annuity Starting Date, or (2) the Participant's Death.
In all other respects, the Fetzer Vineyards Profit Sharing Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Fetzer Vineyards Profit Sharing Plan to be executed by its duly authorized
officer this 13th day of March, 1997, effective December 1, 1994 unless
otherwise set forth herein.
FETZER VINEYARDS
By: /s/ Russell C. Buzby
-----------------------------------
RUSSELL C. BUZBY,
Senior Vice President
2
<PAGE> 59
SECOND AMENDMENT
FETZER VINEYARDS PROFIT SHARING PLAN
The restated Fetzer Vineyards Profit Sharing Plan was adopted by Fetzer
Vineyards effective December 1, 1994.
The Plan provides in Article XI that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.08, Employee, of Article I is amended by adding the
following subsection (c) as an additional excluded classification of employee,
effective May 1, 1997:
1.08 (continued)
(c) those persons classified as Sales and Brand Support
Employees, said employees being eligible to participant in the
Brown-Forman Corporation Savings Plan.
2. Section 7.01, Allocation of Profit Sharing Contribution, of Article
VII is amended by adding the following additional paragraph:
Those Participants who are classified as Sales and Brand
Support Employees shall receive a portion of the Profit Sharing
Contribution for the year ended December 31, 1997, based upon the
said Participant's Compensation for the 1997 Plan Year through
April 30, 1997, pro rating the social security integration, provided
that the said Employee completes 1,000 Hours of Service during
the 1997 Plan Year and is employed on the last day of the Plan Year.
In all other respects, the Fetzer Vineyards Profit Sharing Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
<PAGE> 60
IN WITNESS WHEREOF, the Employer has caused this Second Amendment to
the Fetzer Vineyards Profit Sharing Plan to be executed by its duly authorized
officer this 30th day of April, 1997, effective May 1, 1997.
FETZER VINEYARDS
By: /s/ Milton B. Gillis
-------------------------------
MILTON B. GILLIS
Vice President
2
<PAGE> 61
THIRD AMENDMENT
FETZER VINEYARDS PROFIT SHARING PLAN
The restated Fetzer Vineyards Profit Sharing Plan was adopted by Fetzer
Vineyards effective December 1, 1994.
The Plan provides in Article XI that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit amount appears in Article IV of this
Plan.
2. Effective April 1, 1999, Sections 4.03 and 4.04 of Article IV are
amended in their entirety as follows:
4.03 Manner of Payment of Retirement Benefits. Distribution of
a Participant's benefits will be made to the Participant or Beneficiary
by one of the following methods as elected by the Participant:
(a) Single Payment. Payment may be made in one
lump-sum payment in cash in the year in which distribution is
to be made. However, payment of all or any portion of a
Participant's account balance invested in the Brown-Forman
Stock Fund may be made in one lump-sum payment in cash or in
kind, with in-kind distribution in the form of Brown-Forman
Corporation Class B shares.
(b) Lifetime Payments. Payments may be made in cash
over a period not extending beyond the life expectancy of the
Participant or the joint life expectancies of the Participant
and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a Participant dies
before having received the entire vested balance of that
<PAGE> 62
Participant's benefits, such remaining vested balance, plus
the proceeds of any insurance on the life of the Participant
held in the Participant's Accounts, shall be paid to or for
the benefit of the Participant's Beneficiary in a lump sum
payment in cash; provided, however, that payment of all or any
portion of the Participant's account balance invested in the
Brown-Forman Stock Fund may be made in one lump-sum payment in
cash or in kind, with in kind distribution in the form of
Brown-Forman Corporation Class B shares.
3. Effective April 1, 1999, Section 7.09, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have established the
Brown-Forman Stock Fund, composed of employer securities in
the form of Brown-Forman Corporation Class B shares, as an
additional investment option under the Plan. A Participant may
direct the investment of his/her account balance into said
Stock Fund under the terms and conditions as agreed upon
between the Trustee and the Plan Administrator.
4. Effective April 1, 1999, Article XI, Miscellaneous, is amended by
adding Section 11.16 as follows:
11.16 Action by the Employer. Any action by the Employer
under this Plan may be by the Board of Directors of
Brown-Forman Corporation, or by any person or persons duly
authorized by such Board to take such action.
In all other respects, the Fetzer Vineyards Profit Sharing Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Third Amendment to the
Fetzer Vineyards Profit Sharing Plan to be executed by its duly authorized
officer this 2nd day of March, 1999, effective as set forth herein.
FETZER VINEYARDS
By: /s/ Mary Barrazotto
-------------------------------
MARY BARRAZOTTO
OFFICER
2
<PAGE> 1
EXHIBIT 4(d)
HARTMANN EMPLOYEE
SAVINGS AND INVESTMENT PLAN
PLAN NO.: 018
EIN: 61-0143150
<PAGE> 2
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
By action of the Board of Directors, Brown-Forman Corporation, a
Delaware corporation (Employer), adopted the following plan effective October 1,
1997 (Effective Date), which shall hereafter be known as Hartmann Employee
Savings and Investment Plan (Plan), for the benefit of employees of Hartmann
Luggage Company. Assets consisting of account balances under the Lenox,
Incorporated Savings and Investment Plan and/or the Lenox Retail Savings and
Investment Plan (Predecessor Plans) attributable to participants who are
employees of Hartmann Luggage Company will be spun-off and transferred to the
Trust created for this Plan. The Plan is established to recognize and reward
employees for their contribution to the Employer's successful operation, and is
for the exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS.........................................................................................1
1.01 Accounts......................................................................................1
1.02 Accounting Date...............................................................................1
1.03 Affiliated Employer...........................................................................2
1.04 Beneficiary...................................................................................2
1.05 Break in Service..............................................................................2
1.06 Code..........................................................................................3
1.07 Compensation..................................................................................3
1.08 Elapsed Time..................................................................................4
1.09 Employee......................................................................................5
1.10 Employer......................................................................................5
1.11 Fiscal Year...................................................................................5
1.12 Highly Compensated Employee...................................................................5
1.13 Hour of Service...............................................................................5
1.14 Leased Employee...............................................................................7
1.15 Month of Service..............................................................................7
1.16 Normal Retirement Age.........................................................................7
1.17 Period of Severance...........................................................................8
1.18 Plan Year.....................................................................................8
1.19 Spouse (Surviving Spouse).....................................................................8
1.20 Total and Permanent Disability................................................................8
1.21 Year of Service...............................................................................9
ARTICLE II - PARTICIPATION.....................................................................................10
2.01 Eligibility..................................................................................10
2.02 Reemployment of Participant..................................................................10
2.03 Reemployment of Non-Participant..............................................................10
2.04 Transferred Employees........................................................................10
2.05 Employment Status Change.....................................................................10
2.06 Participation Following Normal Retirement Age................................................11
ARTICLE III - VESTING .........................................................................................12
3.01 Fully Vested and Nonforfeitable Accounts.....................................................12
3.02 Vesting of Other Accounts....................................................................12
3.03 Period of Service for Vesting Purposes.......................................................12
3.04 Vesting Schedule/Employer Matching Contribution Account......................................12
3.05 Vesting Schedule/CORE Account................................................................12
3.06 Effect of Break in Service on Vesting........................................................13
3.07 Date of Termination of Employment............................................................14
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination...............................14
3.09 Amendment of Vesting Schedule................................................................14
ARTICLE IV - TIME AND MANNER OF PAYMENT........................................................................15
4.01 Time of Initial Payment of Retirement Benefits...............................................15
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
4.02 Consent To Payment Of Benefits...............................................................15
4.03 Manner of Payment of Retirement Benefits.....................................................16
4.04 Payment Upon Death of Participant............................................................16
4.05 Calculation of Distributions.................................................................16
4.06 Forfeiture of Non-vested Benefits............................................................18
4.07 Fully Vested Account.........................................................................19
4.08 Suspension of Benefits.......................................................................19
4.09 Pre-1984 Election............................................................................20
4.10 Pre-Retirement Distribution..................................................................20
4.11 Hardship Distribution........................................................................20
4.12 Loans to Participant.........................................................................21
4.13 Limitation for Qualified Domestic Relations Order............................................22
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER......................................................................24
5.01 Nonelective Contribution by Employer.........................................................24
5.02 Elective Contribution by Employer............................................................24
5.03 Matching Contribution by Employer............................................................24
5.04 Deduction of Employer Contributions..........................................................24
5.05 Limits on Elective and Matching Contributions................................................25
5.06 Special Employer Contributions...............................................................26
5.07 Correction of Excess Elective Contributions..................................................27
5.08 Correction of Excess Employer Matching Contributions.........................................27
5.09 Return of Contribution.......................................................................28
5.10 Plan and Trust Conditioned on Approval and Qualification.....................................28
5.11 Funding Policy...............................................................................28
ARTICLE VI - PARTICIPANT CONTRIBUTIONS.........................................................................29
6.01 Amount of Elective Contribution..............................................................29
6.02 Election Request.............................................................................29
6.03 Change of Rate...............................................................................29
6.04 Distributions from Elective Account..........................................................30
6.05 Withdrawal from Voluntary Contribution Account...............................................30
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS............................................................31
7.01 Allocation of Nonelective Employer Contribution..............................................31
7.02 Allocation of Elective Contributions.........................................................31
7.03 Allocation of Matching Contribution..........................................................31
7.04 Allocation of Forfeitures....................................................................31
7.05 Amendment of Allocation Eligibility..........................................................31
7.06 Maximum Additions to Participant's Account...................................................31
7.07 Overall Limit................................................................................33
7.08 Date of Allocation to Accounts...............................................................35
7.09 Expenses of Plan.............................................................................35
7.10 Participant Direction of Investment..........................................................35
7.11 Periodic Adjustments to Account..............................................................35
ARTICLE VIII - TOP HEAVY PROVISIONS............................................................................37
8.01 When Provisions Effective....................................................................37
8.02 Determination of Top Heavy...................................................................37
8.03 Top Heavy Vesting Schedule...................................................................38
8.04 Minimum Benefits.............................................................................38
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
8.05 Impact on Maximum Benefits...................................................................38
8.06 Determination of Super Top Heavy.............................................................39
ARTICLE IX - PORTABILITY OF ACCOUNT............................................................................40
9.01 Transfers to Another Qualified Plan..........................................................40
9.02 Eligible Rollover Distributions..............................................................40
9.03 Transfers to this Plan.......................................................................41
9.04 Manner of Payment of Retirement Benefits Transferred From Lenox Retail Savings and
Investment Plan..............................................................................41
9.05 Election to Waive Joint and Survivor Annuity and Single Life Annuity.........................42
9.06 Payment of Benefits Transferred from Lenox Retail Savings and Investment Plan Upon Death
of Participant...............................................................................43
9.07 Election to Waive Pre-Retirement Survivor Annuity............................................44
ARTICLE X - PARTICIPATING EMPLOYERS............................................................................46
10.01 Adoption by Other Employers..................................................................46
10.02 Withdrawal from the Plan.....................................................................46
10.03 Action of a Single Employer..................................................................46
ARTICLE XI - PLAN ADMINISTRATOR................................................................................47
11.01 Appointment of Plan Administrator............................................................47
11.02 Duties of Plan Administrator.................................................................47
11.03 Decisions of Plan Administrator and Indemnification..........................................48
11.04 Instructions to Trustee......................................................................48
11.05 Claims Procedure.............................................................................48
11.06 Delegating Responsibility....................................................................49
ARTICLE XII - MISCELLANEOUS....................................................................................50
12.01 Right to Terminate...........................................................................50
12.02 Plan Voluntary on Part of Employer...........................................................50
12.03 Benefits Not Subject to Creditors' Claim.....................................................50
12.04 Trust Agreement..............................................................................50
12.05 Assets for Exclusive Benefits to Participants................................................50
12.06 Nonguarantee of Employment...................................................................51
12.07 Amendment....................................................................................51
12.08 Acts by Trustee..............................................................................51
12.09 Laws of Kentucky.............................................................................51
12.10 Distribution to Minor or Incompetent Beneficiary.............................................51
12.11 Construction.................................................................................51
12.12 Merger or Consolidation......................................................................51
12.13 Discretionary Action.........................................................................52
12.14 Lost Beneficiaries; Escheat..................................................................52
12.15 Action by the Employer.......................................................................52
ARTICLE XIII - SIGNATURES......................................................................................53
</TABLE>
iii
<PAGE> 6
ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate
Account established and maintained on behalf of a Participant to which shall be
credited the Participant's share of Employer Matching Contributions and the
share of the net gains or losses of the Trust attributable to such
contributions. The Employer Matching Contribution Account shall be subject to
the vesting provisions of Article III.
(c) Voluntary Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the nondeductible Voluntary Contributions a Participant may have as a result of
the transfer of said Participant's accounts from the Lenox, Incorporated Savings
and Investment Plan and/or the Lenox Retail Savings and Investment Plan
(Predecessor Plans), and the share of the net gains or losses of the Trust
attributable to said Voluntary Contributions. The Voluntary Contribution Account
shall be fully vested and nonforfeitable at all times.
(d) ESOP Contribution Account. The separate Account maintained
on behalf of a Participant to which were credited contributions based on
Compensation paid or accrued on or before December 31, 1986, and the share of
net gains or losses of the Trust attributable to such contributions. The ESOP
Contribution Account shall be fully vested and nonforfeitable at all times.
(e) Company Retirement ("CORE") Account. The separate Account
established and maintained on behalf of a Participant who is an employee at an
"offsite" Hartmann retail store which does not share a common site with the
Hartmann plant facility to which shall be credited any Nonelective Contributions
provided under Section 5.01, and the share of the net gains or losses of the
Trust Fund attributable to such contributions. The CORE Account shall be subject
to the vesting provisions of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Account valuations shall be performed on a daily
basis.
1
<PAGE> 7
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
2
<PAGE> 8
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) payments made in lieu of Hartmann Supplemental Executive
Retirement Plan and/or Lenox, Incorporated Supplemental Executive
Retirement Plan and/or Lenox, Incorporated Supplemental Retirement
Income Plan and/or Brown-Forman Corporation Supplemental Excess
Retirement Plan benefits; and
(d) any payments under a nonqualified deferred compensation
plan.
3
<PAGE> 9
In the Employee's first year of participation, Compensation is
recognized as of the Employee's entry date into the Plan.
Compensation in excess of $150,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d).
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, the annual
compensation of each employee taken into account under the plan shall not exceed
the OBRA '93 annual compensation limit. The OBRA '93 annual compensation limit
is $150,000, as adjusted by the Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to any period,
not exceeding 12 months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination period consists of
fewer than 12 months, the OBRA '93 annual compensation limit will be multiplied
by a fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
Any reference in this plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set forth in this
provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.06) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
4
<PAGE> 10
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.09 Employee. Any person employed by Hartmann Luggage Company, a
subsidiary of Brown-Forman Corporation. Employee shall include any Leased
Employee. However, the term Employee excludes the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided that (i) retirement benefits
were the subject of good faith bargaining between the employee
representatives and the Employer; and (ii) the collective bargaining
agreement does not expressly provide that the employee is eligible for
initial or continued participation in the Plan; and
(b) any person employed as an independent contractor.
1.10 Employer. Brown-Forman Corporation or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Hartmann Luggage Company, an Affiliated Employer, has adopted the Plan.
1.11 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.12 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year received Compensation from the Employer in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code) and, if the Employer so
elected, was a member of the top-paid group for such year. The term highly
compensated employee also includes employees who are 5 percent owners at any
time during the look-back year or determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
1.13 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time
5
<PAGE> 11
during which no duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave of absence
authorized in writing by the Employer; (iii) for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the Employer. The same
Hour of Service is credited no more than once to a single Employee, even though
it may fall within more than one of categories (i), (ii) and (iii) of the
preceding sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's compensation, or unemployment compensation or
disability insurance laws; (iii) Hours of Service are not credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee; and (iv) Hours of Service are not credited to an
Employee for payments made by this Plan or any other pension or profit sharing
plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with
(i) ten (10) Hours of Service for each day for which the
Employee is required to be credited with at least one
(1) Hour of Service under this Section;
(ii) forty-five (45) Hours of Service for each week for
which the Employee is required to be credited with at
least one (1) Hour of Service under this Section; or
(iii) hours Worked, as defined in Labor Regulation Section
2530.200b-3(d)(3)(i) in which 870 Hours Worked are
equivalent to 1,000 Hours of Service, and 435 Hours
Worked are equivalent to 500 Hours of Service; or
(iv) hours of Service determined on the basis of periods
of employment which are the payroll periods
applicable to the Employee. An Employee is credited
with Hours of Service, determined in accordance with
the following table, for
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<PAGE> 12
each payroll period in which the Employee actually
has at least one (1) Hour of Service:
HOURS OF
PAYROLL PERIOD SERVICE CREDITED
-------------- ----------------
weekly 45
semi-monthly 95
monthly 190
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.14 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.15 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.16 Normal Retirement Age. A Participant's 65th birthday.
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<PAGE> 13
1.17 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.18 Plan Year. January 1 to December 31, the accounting year of the
Plan; provided, however, there shall be a short plan year for the period October
1, 1997 to December 31, 1997.
1.19 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.20 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury; or
8
<PAGE> 14
(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
1.21 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three hundred sixty-five (365) day period of
service. An Employee will receive credit for the aggregate of all Years of
Service commencing with the Employee's first day of employment and ending on the
date a Break in Service begins.
Years of Service include Years of Service credited under the
Predecessor Plan(s).
9
<PAGE> 15
ARTICLE II - PARTICIPATION
2.01 Eligibility. An Employee becomes a Participant as of the first day
of the month coinciding with or next following the date the Employee completes a
Year of Service with the Employer. Those Employees who were Participants in the
Lenox, Incorporated Savings and Investment Plan or the Lenox Retail Savings and
Investment Plan on September 30, 1997, will become participants in this Plan on
October 1, 1997.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.10 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
10
<PAGE> 16
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
11
<PAGE> 17
ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Accounts. A Participant's Elective
Contribution Account, Voluntary Contribution Account, and ESOP Contribution
Account are fully vested at all times.
3.02 Vesting of Other Accounts. A Participant's Employer Matching
Contribution Account and CORE Account are fully vested upon the first of the
following events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Plan on October 1, 1997, shall be deemed to be service with
the Employer will be determined by the Executive Committee of the Board of
Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- ----------
<S> <C>
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
</TABLE>
3.05 Vesting Schedule/CORE Account. The vested portion of a
Participant's CORE Account prior to the occurrence of an event stated in Section
3.02 is a percentage of such Account determined on the basis of Years of Service
according to the following schedule:
12
<PAGE> 18
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- ----------
<S> <C>
Less than 5 years 0%
5 years or more 100%
</TABLE>
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If
a terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service (only a single Break in Service applies, if completed
prior to the first day of the first Plan Year in 1985), all post-break
service will be disregarded in determining the vested percentage of
such Participant's Account which accrued prior to the break. However,
all Years of Service (both pre-break and post-break) will count for
purposes of vesting the Participant's Account which accrues after the
break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), all service after the break is disregarded in determining the
vested percentage of the Participant's Account that accrued prior to
the break. Further, such Participant's pre-break service counts for
purposes of determining the vested percentage of the Participant's
Account which accrues after the break only if upon reemployment the
number of consecutive Breaks in Service is less than the aggregate
number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
Service earned prior to the first day of the first Plan Year
in 1985 is disregarded if the minimum participation and minimum vesting
rules then in effect did not require service to be taken into account.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
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<PAGE> 19
3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change. However, for Plan Years
beginning before January 1, 1989, or with respect to Employees who do not
complete one Hour of Service in a Plan Year beginning after December 31, 1988,
"5 years" shall be substituted for "3 years" in the preceding sentence.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan
Administrator.
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<PAGE> 20
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant who is a 5% owner or a Participant who has terminated
employment attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
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<PAGE> 21
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of Normal Retirement Age or age 62.
Absent such Participant's consent to receive benefits in excess of $3,500,
distribution of benefits shall begin no sooner than the later of age 62 or
Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a Participant's benefits
attributable to the Participant's account balance transferred from the Lenox
Retail Savings and Investment Plan will be made pursuant to Section 9.04 hereof.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
Notwithstanding the foregoing, distribution of a Participant's benefits
attributable to the Participant's account balance transferred from the Lenox
Retail Savings and Investment Plan will be made pursuant to Section 9.06 hereof.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
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<PAGE> 22
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required
to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) The amount to be distributed each year shall not
be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the
Participant shall be distributed using the applicable life
expectancy in subsection (i) above as the relevant divisor
without regard to proposed regulations section 1.401(a)(9)-2.
(iii) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(iv) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
17
<PAGE> 23
4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case of any Participant who has incurred five (5) or more
consecutive Breaks in Service (Five Year Break in Service) prior to the
resumption of employment with the Employer, the non-vested portion of
such terminated Participant's benefits, and all regular periodic
adjustments thereto, shall be deemed forfeited and shall be used to
reduce the Employer's contribution for the Plan Year within which the
fifth Break in Service occurs. Upon such forfeiture, such terminated
Participant's Account shall be closed and if the vested Account
balance has not been paid to the Participant, the vested portion of
such Account shall be transferred to a separate Fully Vested Account
for such terminated Participant's benefit; provided, however, at such
time as the terminated Participant resumes employment with the
Employer, an additional separate Account shall be established for the
Participant's benefit as if the Participant were a new Participant,
which Account shall be maintained separate and distinct from the
Participant's Fully Vested Account, until such Account becomes fully
vested at which time the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be allocated
as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as though
a Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account
balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's
18
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reemployment; provided, however, reinstatement of such
Participant's forfeiture shall occur only where repayment by
the Participant is completed by the earlier of: (1) the
last day of the Plan Year within which the Participant has
five consecutive Breaks in Service or (2) five years after the
Participant is reemployed by the Employer. If a terminated
Participant incurs five consecutive Breaks in Service,
repayment will not be permitted.
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if previously
forfeited shall be reinstated (in cash or in kind as initially
forfeited) to constitute the opening balance of such
Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Restoration
of a forfeiture pursuant to this subsection (e) shall in all events be
completed by the Accounting Date of the Plan Year next following the
Plan Year within which the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
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4.09 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982, and if the Participant filed such election in a timely manner with the
Plan Administrator, said election shall be effective unless and until revoked by
the Participant. If an election is revoked any subsequent distributions must
meet the requirements of this Article IV.
4.10 Pre-Retirement Distribution. A Participant who has been a
Participant for at least two years and who attains age 59 1/2 may elect to
receive a distribution of the entire vested amount credited to such
Participant's Accounts, or a portion thereof, excluding amounts from the CORE
Account and the ESOP Contribution Account. Any Participant who withdraws
Elective Contributions shall not be permitted to make Elective Contributions
until six (6) months have elapsed from the date on which such withdrawal occurs.
A Participant who receives such a distribution shall continue to participate in
the Plan. Any such distribution shall be made in a manner consistent with the
requirements of this Article IV, including all notice and consent requirements.
4.11 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for the CORE Account, the ESOP Contribution
Account, and any Special Employer Contributions, and earnings credited
to the Participant's Elective Account after December 31, 1988) of an
amount necessary to satisfy the Participant's immediate and heavy
financial need where the Participant lacks other available resources on
account of:
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household or
other dependant,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
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No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(ii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iii) The distribution shall not exceed the amount of
the financial need.
(iv) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
(v) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.12 Loans to Participant.
(a) The Trustee may, if the Plan Administrator directs, lend amounts in
accordance with this Section and the Trust Agreement, provided, however, that
Participant loans are not permitted from the Participant's CORE Account or the
Participant's ESOP Contribution Account.
Loans may be made to Participants and Beneficiaries under the following
circumstances: (1) loans are made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans are not made available
to Highly Compensated Employees in an amount greater than the amount made
available to other employees; (3) loans bear a reasonable rate of interest; (4)
loans are adequately secured; and (5) loans provide for repayment over a
reasonable period of time.
(b) Any loan granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988, shall be made pursuant to a written
Loan Program which shall be contained in a separate document incorporated herein
by reference, and shall include the following:
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(1) the identity of the person(s) or position(s)
authorized to administer the loan program;
(2) the procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on types and amounts of loans;
(5) the procedure for determining a reasonable interest
rate;
(6) the types of collateral which may secure a loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
(c) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by any plan maintained by the Employer) shall be
limited to the lesser of:
(1) $50,000, reduced by the amount of principal repaid on any
prior loan within the 12-month period ending on the date a loan is
made, or
(2) the greater of (a) 1/2 the Participant's vested Account
balance, or (b) $10,000.
(d) Loans shall provide for level amortization with payments to be made
at least quarterly over a period not to exceed five (5) years.
(e) No distribution shall be made to any Participant or to a
Beneficiary of any Participant unless and until all unpaid loans, including
accrued interest thereon have been liquidated.
(f) Any loan made pursuant to this Section is earmarked as a Directed
Investment in the borrowing Participant's Account, pursuant to Section 7.10.
4.13 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and
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administration of such Qualified Domestic Relations Order may be charged against
and paid from the Accounts of the Participant named in the order.
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ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Nonelective Contribution by Employer. The Employer shall
contribute to the Trust a Nonelective Contribution on behalf of each Participant
who is a salaried Employee of the retail division and who is employed on the
last day of the Plan Year, except those Employees at the plant location in
Lebanon, Tennessee. The amount of the Nonelective Contribution is equal to three
percent (3%) of the Compensation earned by the Participant during the portion of
the Plan Year the Participant is employed at the retail stores. The nonelective
contributions made pursuant to this Section are credited to the Participant's
Company Retirement (CORE) Account in accordance with Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. The amount of
the Matching Contribution shall be
(i) For non-retail Employees, an amount equal to 75% of a
Participant's Compensation deferred. However, in
applying the foregoing matching percentages, only
Participant Elective Contributions up to 5% of
Compensation shall be considered.
(ii) For retail Employees, an amount equal to fifty (50%)
percent of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the
remainder of the Participant's Compensation deferred.
However, in applying the foregoing matching
percentages, only Participant Elective Deferrals up
to 10% of Compensation shall be considered.
(iii) Notwithstanding the foregoing, retail store Employees
at the plant location in Lebanon, Tennessee, shall
receive a matching contribution as set out in
subparagraph (i) above.
The Matching Contribution shall be credited to the Employer Matching
Contribution Account of eligible Participants in accordance with Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the
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<PAGE> 30
Employer provided the return is accomplished within one (1) year after the
disallowance of the deduction.
5.05 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
To prevent the multiple use of the tests in this subsection (b), if a
Highly Compensated Participant is eligible to make elective deferrals pursuant
to any cash or deferred arrangement maintained by the Employer or an Affiliated
Employer, or to make Employee contributions or receive matching contributions
under this or any other plan maintained by the Employer or an Affiliated
Employer, such Participant's Actual Contribution Percentage shall be reduced
pursuant to Treasury regulation 1.401(m)-2. The provisions of regulations
1.401(m)-1(b) and 1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for the Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ADP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ADPs of each eligible
Participant in the group, calculated to the nearest one-hundredth of one
percent. Elective Contributions allocated to non-Highly Compensated Participants
shall not include Excess Deferrals (determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions for the Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ACP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ACPs of each eligible
Participant in the group calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section
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<PAGE> 31
4975(e)(7)) to which Elective Contributions, Matching Contributions or Voluntary
Contributions are made, such contributions on behalf of such Highly Compensated
Participant shall be aggregated in determining the ADP and ACP of such
Participant. If the plans have different plan years, all plans ending within the
same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. Plans may be aggregated to satisfy Code section 401(k)
and 401(m) only if they have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.05.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.03. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.05, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining
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nondiscrimination tests. Further, the contributions shall satisfy the
nondiscrimination requirements in accordance with Regulation 1.401(k)-1(b)(5)
and Regulation 1-401(m)-1(b)(5), incorporated herein by reference.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.05, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest dollar amount of elective deferrals such Participant's excess amounts
("Excess Contributions") and income allocable thereto (determined under
applicable regulations) until the excess amounts have been distributed, or until
such Participant's dollar amount of elective deferrals equals the dollar amount
of elective deferrals of the Highly Compensated Participant having the second
highest dollar amount of elective deferrals . This process shall continue until
the excess amounts have been distributed. The amount of Excess Contributions for
a Highly Compensated Participant is then equal to the total of elective and
other contributions taken into account for the ADP test, minus the product of
the employee's ADP (as determined after application of this Section) and the
employee's compensation used in determining that ratio. The amount of Excess
Contributions to be distributed shall be reduced by any previous distribution of
Excess Deferrals (pursuant to Section 6.01) for the employee's taxable year
ending in the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be distributed to the Participant. Distribution may be postponed
but not later than the close of the Plan Year following the Plan Year in which
the Excess Contribution was allocable; however, if the Excess Contributions are
not corrected within two and one-half months after the Plan Year end, a 10%
excise tax will be imposed on the Employer on such amounts. The Employer shall
designate the distribution as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution shall be made first from unmatched Elective Contributions,
and then simultaneously from matched Elective Contributions and Matching
Contributions which relate to such Elective Contributions. However, any such
Matching Contributions which are not vested shall be forfeited in lieu of
distribution.
5.08 Correction of Excess Employer Matching Contributions. If the
amount of Matching Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.05, the
Plan Administrator shall distribute to the Highly Compensated Participant having
the highest dollar amount of matching contributions such Participant's excess
amounts ("Excess Aggregate Contributions") and income allocable thereto
(determined under applicable regulations) until the excess amounts are
distributed/forfeited, or until such Participant's dollar amount of matching
contributions equals the dollar amount of matching contributions of the Highly
Compensated Participant having the second highest dollar amount of matching
contributions. This process shall continue until the excess amounts are
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<PAGE> 33
distributed/forfeited. The amount of Excess Aggregate Contributions for a Highly
Compensated Employee is then equal to the total of matching and other
contributions taken into account for the ACP test, minus the product of the
Employee's ACP (as determined after application of this Section) and the
Employee's Compensation used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, if any, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
5.09 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two percent (2%) and fifteen percent (15%) (in
increments of 1%) of the Participant's Compensation for the Plan Year in
question, but shall not exceed a dollar amount as adjusted pursuant to the
method provided in Code section 415(d) for the Participant's taxable year. The
Plan Administrator may fix lower maximums for Highly Compensated Employees to
satisfy the nondiscrimination tests of Section 5.05.
A Participant's elective contributions for his or her taxable year
under the Plan and all other plans, contracts and arrangements of an employer
will not exceed the amount of the Section 402(g) limitation in effect for the
calendar year with or within which such taxable year begins. The Section 402(g)
limitation is the greater of $7,000.00 or the adjusted amount determined by the
Secretary of the Treasury.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution of
Excess Contributions pursuant to Section 5.07 for the Plan Year beginning within
the Participant's taxable year.
If the amount allocated to the Participant's Elective Contribution
Account for the Plan Year is less than the maximum amount specified in this
Section, the Participant may elect to have the Employer make a lump-sum Elective
Contribution to the Trust on behalf of the Participant, of an amount not less
than two percent (2%) or more than fifteen percent (15%) (in increments of 1%)
of the Participant's Compensation for the Plan Year in question, subject to the
limitation in this Section. The lump-sum Elective Contribution may be made in
January or December of the Plan Year. Such contribution shall be made as soon as
administratively feasible following the date on which such amount would
otherwise have been paid to the Participant.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any
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other time mutually agreeable between the Employer and the Participant, provided
that all Participants under similar circumstances are treated alike.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, separation from service, or attainment of age 59 1/2;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such corporation if the
Participant continues employment with the corporation acquiring such
assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to Section
4.13; or
(vi) pursuant to Sections 6.01 and 5.07.
6.05 Withdrawal from Voluntary Contribution Account. Any withdrawal
from the Participant's Voluntary Contribution Account is subject to the
distribution rules provided in Section 6.04.
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Nonelective Employer Contribution. Each Plan Year
the Nonelective Employer Contribution shall be allocated to the CORE Accounts of
all eligible Participants employed on the last day of the Plan Year in the same
manner as the contribution is determined pursuant to Section 5.01.
7.02 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.03.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.05 Amendment of Allocation Eligibility. [Reserved.]
7.06 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
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from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions and/or any voluntary
contributions credited for the Limitation Year to the extent the return
would reduce the excess amount in the Participant's Accounts;
(b) Hold any remaining excess after the return of elective
and/or voluntary contributions in the Participant's Account to be used
to reduce Employer contributions in the next Limitation Year and
succeeding years if necessary;
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any Employer
or Employee contributions may be made to the Plan for that Limitation
Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
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<PAGE> 38
(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
Compensation shall be limited to $150,000 as adjusted in the same
manner as permitted under Code section 415(d).
7.07 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Participant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction for
any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined
33
<PAGE> 39
benefit plans individually and in the aggregate satisfied the
requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(1)(2) of the Code
maintained by the employer); and the denominator of which is the sum of
the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
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<PAGE> 40
7.08 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.09 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.10 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish written procedures, incorporated specifically as
part of this Plan, relating to Participant direction of investment under this
Section 7.10.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.11 Periodic Adjustments to Account. The Account(s) held in trust for
the benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
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<PAGE> 41
(i) The fair market value of the Trust on the
current Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting Date,
less
(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single payment to be
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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<PAGE> 42
ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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<PAGE> 43
Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Top Heavy Vesting Schedule. If the Plan becomes Top Heavy, a
Participant's vested interest in such Participant's CORE Account shall be
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- ----------
<S> <C>
Less than 3 years 0%
3 years or more 100%
</TABLE>
8.04 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.05 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.05;
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<PAGE> 44
(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.05.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.06 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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<PAGE> 45
ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic
40
<PAGE> 46
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee is specifically authorized to accept a plan-to-plan
transfer on behalf of participants in this Plan of their accounts in the Lenox,
Incorporated Savings and Investment Plan and/or the Lenox Retail Savings and
Investment Plan.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
9.04 Manner of Payment of Retirement Benefits Transferred From Lenox
Retail Savings and Investment Plan. Distribution of a Participant's benefits
will be made to the Participant or Beneficiary by one of the following methods:
(a) Automatic Form of Payment of Retirement Benefits. Unless
the Participant elects otherwise as provided below, distribution of a
Participant's benefits will be made to the Participant by one of the
following methods, as applicable:
(i) Joint and Survivor Annuity. A Participant who is
married on the Annuity Starting Date shall receive the value
of the benefits in the form of a Joint and Survivor Annuity.
The Joint and Survivor Annuity shall be the actuarial
equivalent of a single life annuity. Such Joint and Survivor
benefits following the Participant's
41
<PAGE> 47
death shall continue to the Spouse during the Spouse's
lifetime at a rate equal to fifty percent (50%) of the rate at
which such benefits were payable to the Participant.
Notwithstanding the foregoing, a Joint and
Survivor Annuity will not be provided unless the Participant
and Spouse have been married the entire 1-year period ending
on the earlier of (1) the Annuity Starting Date, or (2) the
Participant's death. However, if a Participant marries within
one year before the Annuity Starting Date and such marriage
continues for at least a one year period ending on or before
the Participant's death, then the Participant and such Spouse
must be treated as having been married for one year prior to
the Annuity Starting Date, provided that the said Participant
notifies the Plan Administrator when the said Participant has
been married for one year.
(ii) Single Life Annuity. A Participant who is not
married on the Annuity Starting Date shall receive benefits in
the form of a Single Life Annuity.
(b) Optional Form of Payment of Retirement Benefits. If a
Participant duly elects pursuant to Section 4.04 to waive the Joint and
Survivor Annuity or Single Life Annuity, as applicable, distribution of
a Participant's benefits will be made to the Participant or Beneficiary
by one of the following methods, as elected by the Participant:
(i) By lump-sum payment in cash.
(ii) Payments may be made over a period not extending
beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's
Beneficiary.
9.05 Election to Waive Joint and Survivor Annuity and Single Life
Annuity.
(a) Election and Spousal Consent. An election to waive the
Joint and Survivor Annuity must be made by the Participant in writing
during the Election Period and be consented to by the Participant's
Spouse. Such election shall designate a Beneficiary or a form of
benefits that may not be changed without spousal consent (unless the
original consent acknowledged the Spouse's right to limit consent to a
specific Beneficiary or form of benefits and the Spouse voluntarily
chose to relinquish one or both of such rights). Such Spouse's consent
shall be irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public. Such
consent shall not be required if it is established to the satisfaction
of the Plan Administrator that the required consent cannot be obtained
because there is no Spouse, or the Spouse cannot be located, or other
circumstances that may be prescribed by Regulations. The election made
by the Participant and consented to by the Spouse may be revoked by the
Participant in writing without the consent of the Spouse at any time
during the Election Period. The number of revocations
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<PAGE> 48
shall not be limited. Any new election must comply with the
requirements of this Section. A former Spouse's waiver shall not be
binding on a new Spouse.
(b) Election Period. For purposes of this Section, the
Election Period to waive the Joint and Survivor Annuity shall be the
ninety (90) day period ending on the Annuity Starting Date.
(c) Notice Period. With regard to the election, the Plan
Administrator shall provide the Participant a written explanation no
less than 30 and no more than 90 days before the Annuity Starting Date
containing:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the effect
of an election to waive the Joint and Survivor Annuity, and
(iii) the rights of the Participant's Spouse, and
(iv) the right of the Participant to revoke such
election and the effect of such revocation.
(v) the relative values of the various optional
forms of benefits under the Plan.
(d) Election to Waive Single Life Annuity. An unmarried
Participant may elect to waive the Single Life Annuity form of payment
by complying with the provisions of this Section as if electing to
waive the Joint and Survivor Annuity, but without the spousal consent
requirements.
9.06 Payment of Benefits Transferred from Lenox Retail Savings and
Investment Plan Upon Death of Participant. Other than an annuity payable
pursuant to Section 9.04, if a Participant dies before having received the
entire vested balance of that Participant's benefits and has a Surviving Spouse,
such remaining vested balance, plus the proceeds of any insurance on the life of
the Participant held in the Participant's Accounts shall be paid to or for the
benefit of the Participant's Spouse in the form of a Pre-Retirement Survivor
Annuity, unless the Participant has elected to waive the annuity pursuant to
Section 9.07. Payment of such annuity shall commence within a reasonable time
after the Participant's death unless the Spouse elects a later commencement
date. However, payment must commence on or before the later of (i) the last day
of the calendar year following the year of the Participant's death, or (ii) the
last day of the year in which the Participant would have attained age 70-1/2.
If a Participant's death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, the Participant's death benefits shall be paid
to the Beneficiary in a lump sum payment in cash.
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<PAGE> 49
Notwithstanding the foregoing, a Pre-Retirement Survivor Annuity will
not be provided unless the Participant and Spouse have been married the entire
one-year period ending on the earlier of (1) the Annuity Starting Date, or (2)
the Participant's Death.
9.07 Election to Waive Pre-Retirement Survivor Annuity. Any
election to waive the Pre-Retirement Survivor Annuity before the Participant's
death must be made by the Participant in writing during the Election Period and
shall require the Spouse's irrevocable consent in the same manner provided for
in Section 9.05. Further, the Spouse's consent must acknowledge the specific
nonspouse Beneficiary or the alternative form of death benefit to be paid in
lieu of the Pre-Retirement Survivor Annuity (unless the consent of the Spouse
acknowledges that the Spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit and that the Spouse voluntarily elects
to relinquish one or both of such rights.)
(a) The Election Period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which the
Participant attains age thirty-five (35) and end on the date of the
Participant's death. In the event a vested Participant separates from
service prior to the beginning of the Election Period, the Election
Period shall begin on the date of such separation from service.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special qualified election
to waive the Pre-Retirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall
not be valid unless the Participant receives a written explanation of
the Pre-Retirement Survivor Annuity in such terms as are described
below. Pre-Retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
participant attains age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Section.
(b) With regard to the election, the Plan Administrator shall
provide each Participant within the "applicable period", with respect
to such Participant (and consistent with regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 4.04. The
term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(i) The period beginning with the first day of the
Plan Year in which the Participant attains age thirty-two (32)
and ending with the close of the Plan Year preceding the Plan
Year in which the Participant attains age thirty-five (35);
(ii) A reasonable period ending after the individual
becomes a Participant. For this purpose, in the case of an
individual who becomes a Participant after age thirty-two
(32), the explanation must be provided by the end of the
three-year period
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<PAGE> 50
beginning with the first day of the first Plan Year for which
the individual is a Participant;
(iii) A reasonable period ending after the Plan no
longer fully subsidizes the Pre-Retirement Survivor Annuity
with respect to the Participant;
(iv) A reasonable period ending after Code section
401(a)(11) applies to the Participant; or
(v) A reasonable period after separation from
service in the case of a Participant who separates before
attaining age thirty-five (35). For this purpose, the Plan
Administrator must provide the explanation at the time of
separation or within one year after separation.
45
<PAGE> 51
ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown-Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by action
of its governing authority, may withdraw from the Plan after giving 90 days
advance notice to the Board of Directors of Brown-Forman Corporation, provided
the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
46
<PAGE> 52
ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
47
<PAGE> 53
(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
11.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
48
<PAGE> 54
11.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any such delegation of responsibility.
Any action of the Trustee in the exercise of such delegated responsibilities
shall have the same force and effect for all purposes as if such action had been
taken by the Plan Administrator. The Trustee shall have the right, in its sole
discretion, by written instrument delivered to the Plan Administrator, to
reject and to refuse to exercise any such delegated authority.
49
<PAGE> 55
ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is made a part hereof. The Trust and any income
therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used for purposes other than for the
exclusive benefit of the Participants or their Beneficiaries at any time prior
to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries under the Trust.
50
<PAGE> 56
12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
If this Plan replaces a defined contribution plan which provided for
Early Retirement Benefits, the provisions of the prior plan relating to Early
Retirement shall govern for any Participant who was a Participant of the prior
plan and who satisfied the requirements for Early Retirement in the prior plan
as of the date of adoption of this Plan.
12.08 Acts by Trustee. The Employer shall not be responsible for any of
the acts of the Trustee.
12.09 Laws of Kentucky. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the laws of Kentucky, to the
extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
12.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
51
<PAGE> 57
12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
52
<PAGE> 58
ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 8th day of September, 1997, effective October 1,
1997.
BROWN-FORMAN CORPORATION
By : /s/ Milton B. Gillis
-------------------------------
MILTON B. GILLIS, Vice-President
53
<PAGE> 59
FIRST AMENDMENT
HARTMANN EMPLOYEE SAVINGS AND INVESTMENT PLAN
The Hartmann Employee Savings and Investment Plan was adopted by
Brown-Forman Corporation for the benefit of employees of Hartmann Luggage
Company effective October 1, 1997.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit appears in Article IV of this Plan.
2. Sections 4.03 and 4.04 are correctively amended effective October 1,
1997, to reflect the options for distribution of the transferred ESOP Accounts
as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the Participant or the joint life expectancies of the
Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a
Participant's benefits attributable to the Participant's
balance transferred from the Lenox Retail Savings and
Investment Plan will be made pursuant to Section 9.04 hereof.
<PAGE> 60
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
3. Effective April 1, 1999, Sections 4.03 and 4.04 are amended in their
entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective April 1, 1999,
payment of all or any portion of a Participant's account
balance invested in the Brown-Forman Stock Fund may be made in
one lump-sum payment in cash or kind, with in kind
distribution in the form of Brown-Forman Corporation Class B
shares.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the Participant or the joint life expectancies of the
Participant and the Participant's Beneficiary.
Notwithstanding the foregoing, distribution of a
Participant's benefits attributable to the Participant's
balance transferred from the Lenox Retail Savings and
Investment Plan will be made pursuant to Section 9.04 hereof.
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective
2
<PAGE> 61
April 1, 1999, payment of all or any portion of a
Participant's account balance invested in the Brown-Forman
Stock Fund may be made in one lump-sum payment in cash or
kind, with in kind distribution in the form of Brown-Forman
Corporation Class B shares.
4. Effective April 1, 1999, Section 7.10, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B
shares, as an additional investment option under the Plan. A
Participant may direct the investment of his/her account
balance into said Stock Fund under the terms and conditions as
agreed upon between the Trustee and the Plan Administrator.
In all other respects, the Hartmann Employee Savings and Investment
Plan as initially adopted and subsequently amended shall remain in full force
and effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Hartmann Employee Savings and Investment Plan to be executed by its duly
authorized officer this 25th day of March, 1999, effective as set forth herein.
BROWN-FORMAN CORPORATION
By: /s/ Milton B. Gillis
----------------------------------
MILTON B. GILLIS,
Vice President
3
<PAGE> 1
EXHIBIT 4(e)
LENOX SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
PLAN NO.: 017
EIN: 21-0498476
<PAGE> 2
LENOX CHINA SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
By action of the Board of Directors, Lenox, Incorporated, a New Jersey
corporation (Employer), has adopted the following Plan for the benefit of
collectively bargained Employees as set forth herein, effective March 1, 1997
(Effective Date). The Plan is established to recognize and reward said Employees
for their contribution to the Employer's successful operation, and is for the
exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
LENOX CHINA SAVINGS PLAN FOR COLLECTIVELY BARGAINED EMPLOYEES
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS........................................................................................... 1
1.01 Accounts........................................................................................ 1
1.02 Accounting Date................................................................................. 1
1.03 Affiliated Employer............................................................................. 1
1.04 Beneficiary..................................................................................... 1
1.05 Break in Service................................................................................ 2
1.06 Code............................................................................................ 2
1.07 Collective Bargaining Agreement................................................................. 3
1.08 Compensation.................................................................................... 3
1.09 Elapsed Time.................................................................................... 3
1.10 Employee........................................................................................ 4
1.11 Employer........................................................................................ 4
1.12 Fiscal Year..................................................................................... 4
1.13 Highly Compensated Employee..................................................................... 4
1.14 Hour of Service................................................................................. 4
1.15 Leased Employee................................................................................. 5
1.16 Month of Service................................................................................ 6
1.17 Normal Retirement Age........................................................................... 6
1.18 Period of Severance............................................................................. 6
1.19 Plan Year....................................................................................... 6
1.20 Spouse (Surviving Spouse)....................................................................... 7
1.21 Total and Permanent Disability.................................................................. 7
1.22 Union........................................................................................... 7
1.23 Year of Service................................................................................. 7
ARTICLE II - PARTICIPATION........................................................................................ 9
2.01 Eligibility..................................................................................... 9
2.02 Reemployment of Participant..................................................................... 9
2.03 Reemployment of Non-Participant................................................................. 9
2.04 Transferred Employees........................................................................... 9
2.05 Employment Status Change........................................................................ 9
2.06 Participation Following Normal Retirement Age................................................... 9
ARTICLE III - VESTING ............................................................................................ 10
3.01 Fully Vested and Nonforfeitable Account. ...................................................... 10
3.02 Vesting of Employer Matching Account............................................................ 10
3.03 Period of Service for Vesting Purposes.......................................................... 10
3.04 Vesting Schedule/Employer Matching Contribution Account......................................... 10
3.05 [Reserved]...................................................................................... 10
3.06 Effect of Break in Service on Vesting........................................................... 10
3.07 Date of Termination of Employment............................................................... 11
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.................................. 11
3.09 Amendment of Vesting Schedule................................................................... 11
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IV - TIME AND MANNER OF PAYMENT.......................................................................... 13
4.01 Time of Initial Payment of Retirement Benefits................................................. 13
4.02 Consent To Payment Of Benefits................................................................. 13
4.03 Manner of Payment of Retirement Benefits....................................................... 14
4.04 Payment Upon Death of Participant.............................................................. 14
4.05 Calculation of Distributions................................................................... 14
4.06 Forfeiture of Non-vested Benefits.............................................................. 15
4.07 Fully Vested Account........................................................................... 17
4.08 Suspension of Benefits......................................................................... 17
4.09 Pre-1984 Election.............................................................................. 17
4.10 Hardship Distribution.......................................................................... 17
4.11 Limitation for Qualified Domestic Relations Order.............................................. 18
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER........................................................................ 20
5.01 Elective Contribution by Employer.............................................................. 20
5.02 Matching Contribution by Employer.............................................................. 20
5.03 Deduction of Employer Contributions............................................................ 20
5.04 Limits on Elective and Matching Contributions.................................................. 20
5.05 Special Employer Contributions................................................................. 21
5.06 Correction of Excess Elective Contributions.................................................... 22
5.07 Correction of Excess Employer Matching Contributions........................................... 23
5.08 Return of Contribution. ...................................................................... 23
5.09 Plan and Trust Conditioned on Approval and Qualification....................................... 24
5.10 Funding Policy................................................................................. 24
ARTICLE VI - PARTICIPANT CONTRIBUTIONS........................................................................... 25
6.01 Amount of Elective Contribution................................................................ 25
6.02 Election Request............................................................................... 25
6.03 Change of Rate................................................................................. 25
6.04 Distributions from Elective Account............................................................ 25
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS.............................................................. 27
7.01 Allocation of Elective Contributions........................................................... 27
7.02 Allocation of Matching Contribution............................................................ 27
7.03 Allocation of Forfeitures...................................................................... 27
7.04 Amendment of Allocation Eligibility............................................................ 27
7.05 Maximum Additions to Participant's Account..................................................... 27
7.06 Overall Limit.................................................................................. 29
7.07 Date of Allocation to Accounts................................................................. 30
7.08 Expenses of Plan............................................................................... 30
7.09 Participant Direction of Investment. ......................................................... 31
7.10 Periodic Adjustments to Account................................................................ 31
ARTICLE VIII - TOP HEAVY PROVISIONS.............................................................................. 33
8.01 When Provisions Effective...................................................................... 33
8.02 Determination of Top Heavy..................................................................... 33
8.03 Minimum Benefits............................................................................... 34
8.04 Impact on Maximum Benefits..................................................................... 34
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
8.05 Determination of Super Top Heavy............................................................... 35
ARTICLE IX - PORTABILITY OF ACCOUNT.............................................................................. 36
9.01 Transfers to Another Qualified Plan............................................................ 36
9.02 Eligible Rollover Distributions................................................................ 36
9.03 Transfers to this Plan......................................................................... 37
ARTICLE X - PARTICIPATING EMPLOYERS.............................................................................. 38
10.01 Adoption by Other Employers.................................................................... 38
10.02 Withdrawal from the Plan....................................................................... 38
10.03 Action of a Single Employer.................................................................... 38
ARTICLE XI - PLAN ADMINISTRATOR.................................................................................. 39
11.01 Appointment of Plan Administrator.............................................................. 39
11.02 Duties of Plan Administrator................................................................... 39
11.03 Decisions of Plan Administrator and Indemnification............................................ 40
11.04 Instructions to Trustee........................................................................ 40
11.05 Claims Procedure............................................................................... 40
11.06 Delegating Responsibility...................................................................... 40
ARTICLE XII - MISCELLANEOUS...................................................................................... 42
12.01 Right to Terminate............................................................................. 42
12.02 Plan Voluntary on Part of Employer............................................................. 42
12.03 Benefits Not Subject to Creditors' Claim....................................................... 42
12.04 Trust Agreement................................................................................ 42
12.05 Assets for Exclusive Benefits to Participants.................................................. 42
12.06 Nonguarantee of Employment..................................................................... 43
12.07 Amendment...................................................................................... 43
12.08 Acts by Trustee................................................................................ 43
12.09 Laws of Kentucky. ............................................................................ 43
12.10 Distribution to Minor or Incompetent Beneficiary............................................... 43
12.11 Construction................................................................................... 43
12.12 Merger or Consolidation........................................................................ 43
12.13 Discretionary Action........................................................................... 43
12.14 Lost Beneficiaries; Escheat.................................................................... 44
12.15 Action by the Employer......................................................................... 44
ARTICLE XIII - SIGNATURES........................................................................................ 45
</TABLE>
iii
<PAGE> 6
ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the Participant's share of Employer Matching Contributions and the share of the
net gains or losses of the Trust attributable to such contributions. The
Employer Matching Contribution Account shall be subject to the vesting
provisions of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, the Accounting Date shall be December 31. The accounts shall be
valued on a daily basis.
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
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<PAGE> 7
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
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<PAGE> 8
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Collective Bargaining Agreement. The current and then effective
Collective Bargaining Agreement between the Employer and the Union.
1.08 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance,
and similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) any payments under a nonqualified deferred compensation
plan.
Compensation in excess of $150,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d).
1.09 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.07) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
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<PAGE> 9
1.10 Employee. An hourly person actually engaged in the conduct of the
business of the Employer who is required to be and is included in a unit of
employees covered by a Collective Bargaining Agreement between the Union and the
Employer.
1.11 Employer. Lenox, Incorporated or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Notwithstanding any other provisions of this Section, any business
entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired by the Employer or its
Affiliated Employers that was not participating in the plan on March 1, 1997,
may adopt this Plan for its employees and become an adopting Employer only after
the Executive Committee of the Board of Directors of Brown-Forman Corporation
approves its participation and the conditions set out in Section 10.01 are met.
Until the requirements of the preceding sentence are satisfied, none of such
entity's employees are eligible to participate in this Plan.
1.12 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.13 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year received Compensation from the Employer in excess of $80,000 (as
adjusted pursuant to section 415(d) of the Code) and, if the Employer so elects,
was a member of the top-paid group for such year. The term highly compensated
employee also includes employees who are 5 percent owners at any time during the
look-back year or determination year.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
1.14 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
termi nated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
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<PAGE> 10
Hour of Service is credited no more than once to a single Employee, even though
it may fall within more than one of categories (i), (ii) and (iii) of the
preceding sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's compensation, or unemployment compensation or
disability insurance laws; (iii) Hours of Service are not credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee; and (iv) Hours of Service are not credited to an
Employee for payments made by this Plan or any other pension or profit sharing
plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with Hours
Worked, as defined in Labor Regulation Section 2530.200b-3(d)(3)(i) in which 870
Hours Worked are equivalent to 1,000 Hours of Service, and 435 Hours Worked are
equivalent to 500 Hours of Service.
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.15 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing
5
<PAGE> 11
organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.16 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.17 Normal Retirement Age. A Participant's 65th birthday.
1.18 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.19 Plan Year. January 1 to December 31, the accounting year of the
Plan; provided, however, there shall be a short plan year for the period March
1, 1997 to December 31, 1997.
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<PAGE> 12
1.20 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.21 Total and Permanent Disability. A personal disablement resulting
from bodily or mental injury or disease which presumably will permanently,
continuously, and wholly prevent the Participant during the remainder of the
Participant's life from engaging in any regular occupation or performing any
regular work for wage or profit. The Plan Administrator shall determine the
existence of Total and Permanent Disability and may have the Participant
examined by and may rely on advice from a licensed physician chosen by the Plan
Administrator. The determination shall be applied uniformly to all Participants.
A Participant may not qualify for Total and Permanent Disability if the
disability is caused by any of the following:
(a) Disability suffered or incurred while the Participant was engaged
in, or which resulted form the Participant engaging in, a criminal enterprise;
(b) Disability resulting from self-inflicted injury;
(c) Disability which results from abuse of alcohol or narcotics; or
(d) Disability resulting exclusively from military service in the
armed forces of any country for which the Participant receives a government
pension.
1.22 Union. The following bargaining unit: Glass, Molders, Pottery,
Plastics and Allied Workers International Union and its Local Union 236A.
1.23 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three
7
<PAGE> 13
hundred sixty-five (365) day period of service. An Employee will receive credit
for the aggregate of all Years of Service commencing with the Employee's first
day of employment and ending on the date a Break in Service begins.
8
<PAGE> 14
ARTICLE II - PARTICIPATION
2.01 Eligibility. An Employee becomes a Participant as of the first day
of the month coinciding with or next following the date the Employee completes a
Year of Service with the Employer.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.11 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
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<PAGE> 15
ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Account. A Participant's Elective
Contribution Account is fully vested at all times.
3.02 Vesting of Employer Matching Account. A Participant's Employer
Matching Contribution Account is fully vested upon the first of the following
events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Plan on March 1, 1997, shall be deemed to be service with the
Employer will be determined by the Executive Committee of the Board of Directors
of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
</TABLE>
3.05 [Reserved].
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service.
If a terminated Participant is reemployed by the Employer before
incurring five consecutive Breaks in
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<PAGE> 16
Service, both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service, all post-break service will be disregarded in
determining the vested percentage of such Participant's Account which
accrued prior to the break. However, all Years of Service (both
pre-break and post-break) will count for purposes of vesting the
Participant's Account which accrues after the break.
(c) Reemployment of Non-Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with no
vested benefit whatsoever and is reemployed after incurring five
consecutive Breaks in Service, all service after the break is
disregarded in determining the vested percentage of the Participant's
Account that accrued prior to the break. Further, such Participant's
pre-break service counts for purposes of determining the vested
percentage of the Participant's Account which accrues after the break
only if upon reemployment the number of consecutive Breaks in Service
is less than the aggregate number of pre-break Years of Service.
For purposes of this subsection (c), in computing a Participant's
aggregate Years of Service completed prior to any Break in Service,
Years of Service which were disregarded by reason of any prior Break in
Service shall likewise be disregarded.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or
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<PAGE> 17
the adoption date of such amendment, it has the effect of reducing such
Participant's vested accrued benefit as calculated without regard to the
amendment. If the Plan's vesting schedule is amended or the Plan is amended in
any way that directly or indirectly affects the computation of a Participant's
vested percentage, or if the Plan is deemed amended by an automatic change to or
from a Top Heavy vesting schedule, each Participant with at least 3 Years of
Service as of the end of the election period may elect to have such
Participant's vested percentage computed under the Plan without regard to such
amendment or change.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan Administrator.
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<PAGE> 18
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the pay ment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which a
Participant who is a 5% owner or a Participant who has terminated
employment attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
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<PAGE> 19
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of Normal Retirement Age or age 62.
Absent such Participant's consent to receive benefits in excess of $3,500,
distribution of benefits shall begin no sooner than the later of age 62 or
Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the Participant or
the joint life and last survivor expectancy of the Participant and the
Participant's designated Beneficiary
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<PAGE> 20
or (2) a period not extending beyond the life expectancy of the
designated Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first distribution
calendar year, must at least equal the quotient obtained by dividing
the Participant's benefit by the applicable life expectancy.
(ii) The amount to be distributed each year shall not be less
than the quotient obtained by dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy or (2) if the
Participant's Spouse is not the designated Beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of section
1.401(a)(9)-2 of the proposed regulations. Distributions after the
death of the Participant shall be distributed using the applicable life
expectancy in subsection (i) above as the relevant divisor without
regard to proposed regulations section 1.401(a)(9)-2.
(iii) The minimum distribution required for the Participant's
first distribution calendar year must be made on or before the
Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
distribution calendar year in which the employee's required beginning
date occurs, must be made on or before December 31 of that distribution
calendar year.
(iv) If the participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of section
401(a)(9) of the Code and the proposed regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life expectancy
and joint and last survivor life expectancy will be made by use of the expected
return multiples in Section 1.72-9 of the regulations under the Code. Unless
otherwise elected by the Participant or Spouse by the time distributions are
required to begin, life expectancies will be recalculated annually. Such
election shall be irrevocable. The life expectancy of a non-Spouse Beneficiary
may not be recalculated.
4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon termination of a
Participant whose benefits are at least partially vested, the non-vested portion
of such benefits shall be transferred to an account holding potential
forfeitures. This account shall continue to be adjusted by earnings and losses
of the Trust; provided, however, in the case of any Participant who has incurred
five (5) or more consecutive Breaks in Service (Five Year Break in Service)
prior to the resumption of employment with the Employer, the non-vested portion
of such terminated Participant's benefits, and all regular periodic adjustments
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thereto, shall be deemed forfeited and shall be used to reduce the Employer's
contribution for the Plan Year within which the fifth Break in Service occurs.
Upon such forfeiture, such terminated Partici pant's Account shall be closed and
if the vested Account balance has not been paid to the Participant, the vested
portion of such Account shall be transferred to a separate Fully Vested Account
for such terminated Participant's benefit; provided, however, at such time as
the terminated Participant resumes employment with the Employer, an additional
separate Account shall be established for the Participant's benefit as if the
Participant were a new Participant, which Account shall be maintained separate
and distinct from the Participant's Fully Vested Account, until such Account
becomes fully vested at which time the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon termination of
employment of a non-vested Participant, or upon distribution of the vested
portion of a terminated Participant's benefits before the Accounting Date of the
second Plan Year following termination of employment, the non-vested portion of
such terminated Participant's benefits shall be deemed forfeited and shall be
allocated as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a vested
Participant is made, in accordance with subsection (a) as though a Five Year
Break in Service had occurred. If less than the entire vested portion of the
account balance derived from Employer contributions is distributed, the part of
the nonvested portion that will be treated as a forfeiture is the total
nonvested portion multiplied by a fraction, the numerator of which is the amount
of the distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated Participant, who
has received a distribution of the entire vested portion of such
Participant's benefits is reemployed by the Employer prior to a Five
Year Break in Service, and repays to the Plan (in cash and/or kind, as
initially distributed) an amount equal to the full amount of such
distribution (repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of distribution
shall be reinstated by the Employer (in cash and/or kind as initially
forfeited) and added to such repayment to constitute the opening
balance of such Participant's Account upon the Participant's
reemployment; provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the Participant is
completed by the earlier of: (1) the last day of the Plan Year within
which the Participant has five consecutive Breaks in Service or (2)
five years after the Participant is reemployed by the Employer. If a
terminated Participant incurs five consecutive Breaks in Service,
repayment will not be permitted.
(ii) Non-Vested Participant. If a terminated Participant who had
no vested interest in his benefits is reemployed by the Employer before
the Participant's
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consecutive Breaks in Service equal or exceed the greater of (1) five,
or (2) the aggregate number of pre-break Years of Service, that
terminated Participant's benefits, if previously forfeited shall be
reinstated (in cash or in kind as initially forfeited) to constitute
the opening balance of such Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection (c) of
this Section shall be made from the following sources in the order described:
(1) From the forfeiture of such terminated Participant's Account
which has not yet been applied pursuant to subsection (a) above (the
account of potential forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting Date of the
Plan Year within which repayment is completed; or if insufficient,
(3) From the Employer contributions for the Plan Year within which
such repayment is completed; and if necessary, for the Plan Year next
following.
(e) Make-Up Contribution and Time of Restoration. Restoration of a
forfeiture pursuant to this subsection (e) shall in all events be completed by
the Accounting Date of the Plan Year next following the Plan Year within which
the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
4.09 Pre-1984 Election. [Reserved].
4.10 Hadship Distribution.
(a) The Plan Administrator, at the election of the Participant,
shall permit a distribution from the Participant's Account(s) (except
for any Special Employer Contributions and earnings credited to the
Participant's Elective Account) of an amount necessary to satisfy the
Participant's immediate and heavy financial need where the Participant
lacks other available resources on account of:
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(i) accident or illness involving the Participant or a
membe of the Participant's immediate family or household or other
dependant,
(ii) tuition and related educational fees for the next twelve
(12) months for post-secondary education of a member of the
Participant's immediate family or other dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan Administrator
determines constitutes an immediate and heavy financial need.
No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
(i) The Participant is limited to two (2) hardship
distributions per Plan Year.
(ii) The Participant shall apply for the distribution under
procedures fixed by the Plan Administrator.
(iii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iv) The distribution shall not exceed the amount of
the financial need.
(v) The Participant shall obtain all distributions and
nontaxable loans available under all plans of the Employer.
(vi) The Participant's Elective Contributions under all plans
of the Employer for the year immediately following the year of the
hardship distribution shall not exceed $7,979 (adjusted pursuant
to the method provided in Code section
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<PAGE> 24
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.11 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may be
charged against and paid from the Accounts of the Participant named in the
order.
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ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.01.
5.02 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. The amount of
the Matching Contribution shall be equal to 25% of the Participant's Elective
Contributions. However, in applying the foregoing matching percentages,
effective from March 1, 1997 to October 3, 1999, only Participant Elective
Contributions up to the first 2% of Compensation deferred for the Plan Year
shall be considered. Effective October 4, 1999, only the first 4% of
Compensation deferred for the Plan Year shall be considered. The Matching
Contribution shall be credited to the Employer Matching Contribution Account of
eligible Participants in accordance with Section 7.02.
5.03 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the Employer provided the return is
accomplished within one (1) year after the disallowance of the deduction.
5.04 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and proposed
Regulation 1.401(m)-1 and -2. The Code and Regulation sections are incorporated
by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees, or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
To prevent the multiple use of the tests in this subsection (b), if a
Highly Compensated Participant is eligible to make elective deferrals pursuant
to any cash or deferred arrangement maintained by the Employer or an Affiliated
Employer, or to make Employee contributions or receive matching contributions
under this or any other plan maintained by the Employer or an Affiliated
Employer, such Participant's Actual Contribution Percentage shall be reduced
pursuant
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<PAGE> 26
to Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b)
and 1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ADP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ADPs of each eligible
Participant in the group, calculated to the nearest one-hundredth of one
percent. Elective Contributions allocated to non-Highly Compensated Participants
shall not include Excess Deferrals (determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions for the Plan Year used in
performing the calculations by the Participant's Compensation for such Plan
Year. The ACP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ACPs of each eligible
Participant in the group calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions or Matching Contributions are made, such contributions on behalf
of such Highly Compensated Participant shall be aggregated in determining the
ADP and ACP of such Participant. If the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. Plans may be aggregated to satisfy Code section 401(k)
and 401(m) only if they have the same Plan Year.
5.05 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.04.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
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<PAGE> 27
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.02. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.04, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining nondiscrimination tests. Further, the
contributions shall satisfy the nondiscrimination requirements in accordance
with Regulation 1.401(k)-1(b)(5) and Regulation 1.401(m)-1(b)(5), incorporated
herein by reference.
5.06 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.04, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest dollar amount of elective deferrals such Participant's excess amounts
("Excess Contributions") and income allocable thereto (determined under
applicable regulations) until the excess amounts have been distributed, or until
such Participant's dollar amount of elective deferrals equals the dollar amount
of elective deferrals of the Highly Compensated Participant having the second
highest dollar amount of elective deferrals. This process shall continue until
the excess amounts have been distributed. The amount of Excess Contributions for
a Highly Compensated Participant is then equal to the total of elective and
other contributions taken into account for the ADP test, minus the product of
the employee's ADP (as determined after application of this Section) and the
employee's compensation used in determining that ratio. The amount of Excess
Contributions to be distributed shall be reduced by any previous distribution of
Excess Deferrals (pursuant to Section 6.01) for the employee's taxable year
ending in the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be distributed to the Participant. Distribution may be postponed
but not later than the close of the Plan Year following the Plan Year in which
the Excess Contribution was allocable; however, if the
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Excess Contributions are not corrected within two and one-half months after the
Plan Year end, a 10% excise tax will be imposed on the Employer on such amounts.
The Employer shall designate the distribution as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution shall be made first from unmatched Elective Contributions,
and then simultaneously from matched Elective Contributions and Matching
Contributions which relate to such Elective Contributions. However, any such
Matching Contributions which are not vested shall be forfeited in lieu of
distribution.
5.07 Correction of Excess Employer Matching Contributions. If the
amount of Matching Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.04, the
Plan Administrator shall distribute (or forfeit, if applicable) to the Highly
Compensated Participant having the highest dollar amount of matching
contributions such Participant's excess amounts ("Excess Aggregate
Contributions") and income allocable thereto (determined under applicable
regulations) until the excess amounts are distributed/forfeited, or until such
Participant's dollar amount of matching contributions equals the dollar amount
of matching contributions of the Highly Compensated Participant having the
second highest dollar amount of matching contributions. This process shall
continue until the excess amounts are distributed/forfeited. The amount of
Excess Aggregate Contributions for a Highly Compensated Employee is then equal
to the total of voluntary, matching and other contributions taken into account
for the ACP test, minus the product of the Employee's ACP (as determined after
application of this Section) and the Employee's Compensation used in determining
that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, if any, including
recharacterized amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
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5.08 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.09 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.10 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two (2%) percent and fifteen (15%) percent (in 1%
increments) of the Participant's Compensation, but a Participant's Elective
Contribution for a calendar year under the Plan and all other plans, contracts
and arrangements of an employer, shall not exceed the 402(g) limitation, which
is a dollar amount as adjusted pursuant to the method provided in Code section
415(d) for the Participant's taxable year. The Plan Administrator may fix lower
maximums for Highly Compensated Employees to satisfy the nondiscrimination tests
of Section 5.04.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.06 for the Plan
Year beginning within the Participant's taxable year.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any other time mutually
agreeable between the Employer and the Participant, provided that all
Participants under similar circumstances are treated alike. The Participant is
limited to three (3) such changes for the Plan Year.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and Permanent
Disability, or separation from service;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
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(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such corporation if the
Participant continues employment with the corporation acquiring such
assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to Section
4.10; or
(vi) pursuant to Sections 6.01 and 5.06.
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.02 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.02.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.03 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.04 Amendment of Allocation Eligibility. [Reserved.]
7.05 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
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The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions credited for the
Limitation Year to the extent the return would reduce the excess amount
in the Participant's Accounts;
(b) Hold any remaining excess after the return of elective
contributions in the Participant's Account to be used to reduce
Employer contributions in the next Limitation Year and succeeding years
if necessary;
(c) If an excess amount still exists and the Participant
is not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any Employer
or Employee contributions may be made to the Plan for that Limitation
Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred
compensation which are not includible in the Participant's gross income
in the year in which contributed;
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(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
Compensation shall be limited to $150,000 as adjusted in the same
manner as permitted under Code section 415(d).
7.06 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Par ticipant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction
for any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
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(b) Defined Contribution Fraction. The Defined
Contribution Fraction is a fraction, the numerator of which is the sum
of Annual Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for
the current and all prior Limitation Years (including the annual
additions attributable to the participant's nondeductible employee
contributions to the participant's plans, whether or not terminated,
maintained by the employer, and the annual additions attributable to
all welfare benefit funds, as defined in section 419(e) of the Code,
and individual medical accounts, as defined in section 415(1)(2) of the
Code maintained by the employer); and the denominator of which is the
sum of the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
If the employee was a Participant as of the end of the
first day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by the
employer which were in existence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of this fraction and the defined
benefit fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the denominator
of this fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
7.07 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
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7.08 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.09 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish written procedures, incorporated specifically as
part of this Plan, relating to Participant direction of investment under this
Section 7.09.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.10 Periodic Adjustments to Account. The Account(s) held in trust
for the benefit of a Participant shall be adjusted in an equitable and
reasonable manner, generally to be determined as follows unless circumstances
require otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
(i) The fair market value of the Trust on the current
Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting Date,
less
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(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single payment to be
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.04 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.04;
(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.04.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be
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satisfied by aggregating the contributions made in all of the aggregated defined
contribution plans of the Employer.
8.05 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall
be entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant
to Internal Revenue Code section 401(a) as now in effect or hereafter amended,
the Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in
a separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
distributee's election under this section, a distributee may elect, at the time
and in the manner prescribed by the plan administrator, to have any portion of
an eligible rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover. The following definitions
are applicable under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(b) Eligible Retirement Plan. An eligible retirement
plan is an individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a) of the
Code, or a qualified trust described in section 401(a) of the Code,
that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) Distributee. A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
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relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A direct rollover is a payment by
the plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is
subject to the funding standards of Section 412 of the Code, or (3) any other
plan which offered an annuity in any form to its Participants, unless the
acceptance of such assets does not require any additional optional form of
benefit to be provided under this Plan. Such transfers from other qualified
plans shall be segregated in a fully vested and nonforfeitable Participant
Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown- Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the
participation of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by
action of its governing authority, may withdraw from the Plan after giving 90
days advance notice to the Board of Directors of Brown-Forman Corporation,
provided the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to
all Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
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ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports to
the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the Plan,
including supplying any omissions in accordance with the intent of the
Plan, decide all questions of eligibility, determine the amount, manner
and time of payment of any benefits hereunder, authorize the payment of
benefits, and issue directions to the Trustee (and/or insurance
company, if applicable) regarding the payment of such benefits;
(e) Plan Information. Prepare and distribute, in such manner as
the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request, such
annual reports with respect to the administration of the Plan as are
reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
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(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical
adjustments necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as
set forth in the Plan; and
(k) Generally. Exercise other powers and duties the
Employer may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without
a formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the
Trust, the Trustee or the Employer shall indemnify the Plan Administrator
against any and all claims, losses, damages, expenses and liabilities arising
from any act of commission or omission if the act is judicially determined not
to be a breach of fiduciary responsibility by the Plan Administrator. The
indemnification shall include attorney's fees and all other costs and expenses
reasonably incurred by the Plan Administrator in defense of any action brought
against said Plan Administrator arising from such act of commission or
omission.
11.04 Instructions to Trustee. The Trustee may request instructions
in writing from the Plan Administrator on other matters and may rely and act
upon them.
11.05 Claims Procedure. The Plan Administrator shall establish a
claims procedure for the benefit of Participants and their Beneficiaries which
shall:
(a) provide adequate notice in writing to any
Participant or Beneficiary whose claim for benefits under the Plan has
been denied, setting forth the specific reasons for such denial,
written in a manner calculated to be understood by the Participants,
and
(b) afford any Participant or Beneficiary whose claim
for benefits has been denied a reasonable opportunity for a full and
fair review by the appropriate named fiduciary.
11.06 Delegating Responsibility. The Plan Administrator may
delegate in writing all or any part of its responsibilities under this document
to the Trustee and in the same manner, revoke any
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such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The
Trustee shall have the right, in its sole discretion, by written instru ment
delivered to the Plan Administrator, to reject and to refuse to exercise any
such delegated authority.
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ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a
copy thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of
the Employer that this Plan shall be continued and its contributions made in
each year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time
to time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest
extent permitted by law, none of the benefits under the Plan are subject to the
claims of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in
the Plan and Trust Fund, nor shall any such benefits be in any manner liable
for or subject to the deeds, contracts, liabilities, engagements, or torts of
any Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust
Agreement and said Trust Agreement is incorporated herein and made a part
hereof. The Trust and any income therefrom received by the Trustee shall be
received, held in trust, and disbursed by the Trustee in accordance with
written instructions from the Plan Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as
provided in Article V, it shall not be possible (within the taxable year or
thereafter) for any part of the corpus or income to be used for purposes other
than for the exclusive benefit of the Participants or their Beneficiaries at
any time prior to the satisfaction of all liabilities with respect to
Participants and their Beneficiaries under the Trust.
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12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to
interfere with the right of the Employer to discharge any Participant or
Employee at any time regardless of the effect which such discharge may have
upon that Employee or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by
an instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
12.08 Acts by Trustee. The Employer shall not be responsible for
any of the acts of the Trustee.
12.09 Laws of Kentucky. The provisions of this Plan shall be
construed, administered, and enforced in accordance with the laws of Kentucky,
to the extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a
legal or natural guardian or other person who shall have full authority and
discretion to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall
include the feminine. Whenever words are used herein in the singular, they
shall be construed as though they were used in the plural, in any case where
they would so apply.
12.12 Merger or Consolidation. In the event of a merger,
consolidation or transfer of assets and/or liabilities to any other Plan, each
Participant shall be entitled to a benefit immediately after the merger,
consolidation, or transfer (if the Plan then terminated) which is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before such transaction if the Plan had then terminated.
12.13 Discretionary Action. The Plan Administrator may exercise
full discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary
43
<PAGE> 49
power includes, but is not limited to, construing and interpreting this Plan,
construing disputed or doubtful terms, supplying omissions in accordance with
the intent of the Plan, deciding questions of eligibility for participation,
determining the amount, timing and payment of benefits under the terms of the
Plan, reviewing benefit eligibility determinations, and authorizing the payment
of benefits. Whenever the Administrator acts pursuant to the terms of this
Plan, such action will be taken in a uniform and nondiscriminatory manner. Any
construction of the Plan or Trust adopted by the Administrator in good faith,
and any discretionary action exercised by the Administrator in good faith,
shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by
applicable state law including, but not by way of limitation, the appropriate
rules of escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
44
<PAGE> 50
ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed
by an officer duly authorized this 28th of February, 1997, effective March 1,
1997.
LENOX, INCORPORATED
By: /s/ Susan Von Hoven
-----------------------------------------
Susan Von Hoven, Assistant Vice President
45
<PAGE> 51
FIRST AMENDMENT
LENOX CHINA SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
The Lenox China Savings Plan For Collectively Bargained Employees was
adopted by Lenox, Incorporated effective March 1, 1997.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. The name of the Plan is changed to "Lenox Savings Plan for
Collectively Bargained Employees."
2. Section 1.22, Union, of Article I is amended in its entirety,
effective July 1, 1998, as follows:
1.22 Union. The following bargaining units: Glass,
Molders, Pottery, Plastics and Allied Workers International Union and
its Local Union 236A, and effective July 1, 1998, United Steelworkers
of America, AFL-CIO, Local 16031.
3. Section 5.02, Matching Contribution by Employer, of Article V
is amended in its entirety, effective July 1, 1998, as follows:
5.02 Matching Contribution by Employer.
(a) Glass, Molders, Pottery, Plastics and
Allied Workers International Union and its Local Union 236A. Each Plan
Year the Employer shall contribute to the Trust a Matching
Contribution on behalf of each Participant who is a member of the
Glass, Molders, Pottery, and Plastics and Allied Workers International
Union and its Local Union 236A receiving an Elective Contribution for
the Plan Year. The amount of the Matching Contribution shall be equal
to 25% of the Participant's Elective Contributions. However, in
applying the foregoing matching percentages, effective from March 1,
1997 to October 3, 1999, only Participant Elective Contributions up to
the first 2% of Compensation deferred for
<PAGE> 52
the Plan Year shall be considered. Effective October 4, 1999, only the
first 4% of Compensation deferred for the Plan Year shall be
considered. The Matching Contribution shall be credited to the
Employer Matching Contribution Account of eligible Participants in
accordance with Section 7.02.
(b) United Steelworkers of America, AFL-CIO,
Local 16031. The Employer does not intend to make matching
contributions at this time for Participants who are members of the
United Steelworkers of America, AFL-CIO, Local 16031. If the Plan is
amended in the future to provide for matching contributions, any
matching contribution made pursuant to this subsection (b), shall be
credited to the Employer Matching Contribution Account of eligible
Participants in accordance with Section 7.02.
4. The first paragraph of Section 5.06, Correction of Excess
Elective Contributions, of Article V is correctively amended in its entirety,
effective March 1, 1997, as follows:
5.06 Correction of Excess Elective Contributions. If the
amount of Elective Contributions allocated to the group of Highly
Compensated Participants exceeds the nondiscrimination tests specified
in Section 5.04, the Plan Administrator shall distribute such excess
amounts ("Excess Contributions") and income allocable thereto
(determined under applicable regulations). The Excess Contributions
are the amount of Elective Contributions made by the Highly
Compensated Participants which causes the Plan to fail to satisfy the
ADP test. The Plan Administrator will determine the amount of the
Excess Contributions by starting with the Highly Compensated
Participant(s) who has (have) the greatest ADP, reducing his (their)
ADP (but not below the next highest ADP), then, if necessary, reducing
the ADP of the Highly Compensated Participant(s) at the next highest
ADP, including the ADP of the Highly Compensated Participant(s) whose
ADP the Plan Administrator already has reduced (but not below the next
highest ADP), and continuing in this manner until the average ADP for
the Highly Compensated Group satisfies the ADP test. After the Plan
Administrator has determined the Excess Contribution amount, the
Trustee, as directed by the Plan Administrator, then will distribute
to each Highly Compensated Participant his respective share(s) of
Excess Contributions. The Plan Administrator will determine the
respective share(s) of Excess Contributions by starting with the
Highly Compensated Participant(s) who has (have) the highest amount of
Elective Contributions, reducing the amount of his (their) Elective
Contributions (but not below the next highest level of Elective
Contributions), then, if necessary, reducing the amount of the
Elective Contributions of the Highly Compensated Participant(s) at the
next highest level of Elective Contributions including the amount of
Elective Contributions of the Highly Compensated Participant(s) whose
Elective Contributions the Plan Administrator already has reduced (but
not below the next highest level of Elective contributions), and
2
<PAGE> 53
continuing in this manner until the Participant has distributed all
Excess Contributions.
5. The first paragraph of Section 5.07, Correction of Excess
Employer Matching Contributions, of Article V is correctively amended in its
entirety, effective March 1, 1997, as follows:
5.07 Correction of Excess Employer Matching
Contributions. If the amount of Matching Contributions allocated to
the group of Highly Compensated Participants exceeds the
nondiscrimination tests specified in Section 5.04, the Plan
Administrator shall distribute (or forfeit, if applicable) such excess
amounts ("Excess Aggregate Contributions") and income allocable
thereto (determined under applicable regulations). The Excess
Aggregate Contributions are the amount of aggregate contributions
allocated on behalf of the Highly Compensated Participants which
causes the Plan to fail to satisfy the ACP test. The Plan
Administrator will determine the amount of the Excess Aggregate
Contributions by starting with the Highly Compensated Participant(s)
who has (have) the greatest contribution percentage, reducing his
(their) contribution percentage (but not below the next highest
contributions percentage), then, if necessary, reducing the
contribution percentage on the Highly Compensated Participant(s) at
the next highest contribution percentage level, including the
contribution percentage of the Highly Compensated Participant(s) whose
contribution percentage the Plan Administrator already has reduced
(but not below the next highest contribution percentage), and
continuing in this manner until the ACP for the Highly Compensated
Group satisfies the ACP test. After the Plan Administrator has
determined the Excess Aggregate Contribution amount, the Trustee, as
directed by the Plan Administrator, then will distribute to each
Highly Compensated Participant his respective share of the Excess
Aggregate Contributions. The Plan Administrator will determine the
respective share(s) of Excess Aggregate Contributions by starting with
the Highly Compensated Participant(s) who has (have) the greatest
amount of aggregate contributions, reducing the amount of his (their)
aggregate contributions (but not below the next highest amount of the
aggregate contributions), then, if necessary reducing the amount of
aggregate contributions of the Highly Compensated Participant(s) at
the next highest level of aggregate contributions, including the
amount of aggregate contributions of the Highly Compensated
Participant(s) whose aggregate contributions the Plan Administrator
already has reduced (but not below the next highest level of aggregate
contributions), and continuing in this manner until the Trustee has
distributed all Excess Aggregate Contributions.
3
<PAGE> 54
6. Section 12.09, Laws of Kentucky, of Article XII is
correctively amended in its entirety, effective March 1, 1997, as follows:
12.09 Laws of New Jersey. The provisions of this Plan
shall be construed, administered, and enforced in accordance with the
laws of New Jersey, to the extent such laws are not superseded by
Federal law.
In all other respects, the Lenox China Savings Plan For Collectively
Bargained Employees as initially adopted and subsequently amended shall remain
in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to
the Lenox China Savings Plan For Collectively Bargained Employees to be
executed by its duly authorized officer this 21st day of July, 1998, effective
as set forth herein.
LENOX, INCORPORATED
By:/s/ Susan Von Hoven
----------------------------------------
SUSAN VON HOVEN
Vice President
4
<PAGE> 55
SECOND AMENDMENT
LENOX SAVINGS PLAN
FOR COLLECTIVELY BARGAINED EMPLOYEES
The Lenox Savings Plan For Collectively Bargained Employees was
adopted by Lenox, Incorporated effective March 1, 1997.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1,
1999, Article IV, Time and Manner of Payment, is amended to increase the
involuntary cashout limit from $3,500 to $5,000. The $3,500 dollar limit is
amended to read $5,000 wherever that $3,500 dollar limit appears in Article IV
of this Plan.
2. Effective April 1, 1999, Sections 4.03 and 4.04 of Article IV
are amended in their entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be
made in one lump-sum payment in cash in the year in which
distribution is to be made. However, payment of all or any
portion of a Participant's account balance invested in the
Brown-Forman Stock Fund may be made in one lump-sum payment
in cash or in kind, with in-kind distribution in the form of
Brown-Forman Corporation Class B shares.
(b) Lifetime Payments. Payments may be
made in cash over a period not extending beyond the life
expectancy of the Participant or the joint life expectancies
of the Participant and the Participant's Beneficiary.
<PAGE> 56
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of
the Participant held in the Participant's Accounts, shall be
paid to or for the benefit of the Participant's Beneficiary
in a lump sum payment in cash; provided, however, that
payment of all or any portion of the Participant's account
balance invested in the Brown-Forman Stock Fund may be made
in one lump-sum payment in cash or in kind, with in kind
distribution in the form of Brown-Forman Corporation Class B
shares.
3. Effective April 1, 1999, Section 7.09, Participant Direction
of Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B
shares, as an additional investment option under the Plan. A
Participant may direct the investment of his/her account
balance into said Stock Fund under the terms and conditions
as agreed upon between the Trustee and the Plan
Administrator.
In all other respects, the Lenox Savings Plan For Collectively
Bargained Employees as initially adopted and subsequently amended shall remain
in full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Second Amendment to
the Lenox Savings Plan For Collectively Bargained Employees to be executed by
its duly authorized officer this 25th day of February, 1999, effective as set
forth herein.
LENOX, INCORPORATED
By:/s/ James D. Wilson
----------------------------------------
JAMES D. WILSON
Officer
2
<PAGE> 1
EXHIBIT 4(f)
LENOX, INCORPORATED
EMPLOYEE SAVINGS AND INVESTMENT PLAN
PLAN NO.: 003
EIN: 21-0498476
<PAGE> 2
LENOX, INCORPORATED EMPLOYEE SAVINGS AND INVESTMENT PLAN
By action of the Board of Directors, Lenox, Incorporated, a New Jersey
corporation (Employer), adopted an employee thrift plan (Prior Plan) with
matching contributions made by the Employer, effective January 1, 1975.
Effective July 1, 1988, the Employer adopted a revision of the Prior Plan.
Effective January 1, 1989 (Effective Date), except as otherwise
provided, the Employer adopted the following plan, an amendment and restatement
of the Prior Plan, which shall hereafter be known as Lenox, Incorporated
Employee Savings and Investment Plan (Plan). The Plan is established to
recognize and reward employees for their contribution to the Employer's
successful operation, and is for the exclusive benefit of Participants and their
Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
LENOX, INCORPORATED EMPLOYEE SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS...........................................................................................1
1.01 Accounts........................................................................................1
1.02 Accounting Date.................................................................................1
1.03 Affiliated Employer.............................................................................2
1.04 Beneficiary.....................................................................................2
1.05 Break in Service................................................................................2
1.06 Code............................................................................................3
1.07 Compensation....................................................................................3
1.08 Elapsed Time....................................................................................4
1.09 Employee........................................................................................5
1.10 Employer........................................................................................5
1.11 Fiscal Year.....................................................................................6
1.12 Highly Compensated Employee.....................................................................6
1.13 Hour of Service.................................................................................7
1.14 Leased Employee.................................................................................8
1.15 Month of Service................................................................................8
1.16 Normal Retirement Age...........................................................................8
1.17 Period of Severance.............................................................................9
1.18 Plan Year.......................................................................................9
1.19 Spouse (Surviving Spouse).......................................................................9
1.20 Total and Permanent Disability..................................................................9
1.21 Year of Service................................................................................10
ARTICLE II - PARTICIPATION.......................................................................................11
2.01 Eligibility....................................................................................11
2.02 Reemployment of Participant....................................................................11
2.03 Reemployment of Non-Participant................................................................11
2.04 Transferred Employees..........................................................................11
2.05 Employment Status Change.......................................................................11
2.06 Participation Following Normal Retirement Age..................................................12
ARTICLE III - VESTING ...........................................................................................13
3.01 Fully Vested and Nonforfeitable Accounts. ....................................................13
3.02 Vesting of Other Accounts......................................................................13
3.03 Period of Service for Vesting Purposes.........................................................13
3.04 Vesting Schedule/Employer Matching Contribution Account........................................13
3.05 Vesting Schedule/CORE Account..................................................................13
3.06 Effect of Break in Service on Vesting..........................................................14
3.07 Date of Termination of Employment..............................................................15
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.................................15
3.09 Amendment of Vesting Schedule..................................................................15
3.10 Former Employees of Lenox Awards Division......................................................15
3.11 Former Employees of Athalon Successories Division..............................................15
3.12 Former Employees of Athalon Denver Facility....................................................16
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IV - TIME AND MANNER OF PAYMENT..........................................................................17
4.01 Time of Initial Payment of Retirement Benefits.................................................17
4.02 Consent To Payment Of Benefits.................................................................17
4.03 Manner of Payment of Retirement Benefits.......................................................18
4.04 Payment Upon Death of Participant..............................................................18
4.05 Calculation of Distributions...................................................................18
4.06 Forfeiture of Non-vested Benefits..............................................................19
4.07 Fully Vested Account...........................................................................21
4.08 Suspension of Benefits.........................................................................21
4.09 Pre-1984 Election..............................................................................21
4.10 Pre-Retirement Distribution....................................................................22
4.11 Hardship Distribution..........................................................................22
4.12 Loans to Participant...........................................................................23
4.13 Limitation for Qualified Domestic Relations Order..............................................24
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER........................................................................25
5.01 Nonelective Contribution by Employer...........................................................25
5.02 Elective Contribution by Employer..............................................................25
5.03 Matching Contribution by Employer..............................................................25
5.04 Deduction of Employer Contributions............................................................25
5.05 Limits on Elective and Matching Contributions..................................................25
5.06 Special Employer Contributions.................................................................27
5.07 Correction of Excess Elective Contributions....................................................28
5.08 Correction of Excess Employer Matching Contributions and Voluntary
Contributions..................................................................................29
5.09 Return of Contribution.........................................................................29
5.10 Plan and Trust Conditioned on Approval and Qualification.......................................30
5.11 Funding Policy.................................................................................30
ARTICLE VI - PARTICIPANT CONTRIBUTIONS...........................................................................31
6.01 Amount of Elective Contribution................................................................31
6.02 Election Request...............................................................................31
6.03 Change of Rate.................................................................................31
6.04 Distributions from Elective Account............................................................31
6.05 Voluntary Contributions........................................................................32
6.06 Withdrawal from Voluntary Contribution Account.................................................32
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS..............................................................33
7.01 Allocation of Nonelective Employer Contribution................................................33
7.02 Allocation of Elective Contributions...........................................................33
7.03 Allocation of Matching Contribution............................................................33
7.04 Allocation of Forfeitures......................................................................33
7.05 Amendment of Allocation Eligibility............................................................33
7.06 Maximum Additions to Participant's Account.....................................................34
7.07 Overall Limit..................................................................................36
7.08 Date of Allocation to Accounts.................................................................37
7.09 Expenses of Plan...............................................................................37
7.10 Participant Direction of Investment............................................................37
7.11 Periodic Adjustments to Account................................................................38
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE VIII - TOP HEAVY PROVISIONS..............................................................................40
8.01 When Provisions Effective......................................................................40
8.02 Determination of Top Heavy.....................................................................40
8.03 Top Heavy Vesting Schedule.....................................................................41
8.04 Compensation Limitation........................................................................41
8.05 Minimum Benefits...............................................................................41
8.06 Impact on Maximum Benefits.....................................................................41
8.07 Determination of Super Top Heavy...............................................................42
ARTICLE IX - PORTABILITY OF ACCOUNT..............................................................................43
9.01 Transfers to Another Qualified Plan............................................................43
9.02 Eligible Rollover Distributions................................................................43
9.03 Transfers to this Plan.........................................................................44
ARTICLE X - PARTICIPATING EMPLOYERS..............................................................................45
10.01 Adoption by Other Employers....................................................................45
10.02 Withdrawal from the Plan.......................................................................45
10.03 Action of a Single Employer....................................................................45
ARTICLE XI - PLAN ADMINISTRATOR..................................................................................46
11.01 Appointment of Plan Administrator..............................................................46
11.02 Duties of Plan Administrator...................................................................46
11.03 Decisions of Plan Administrator and Indemnification............................................47
11.04 Instructions to Trustee........................................................................47
11.05 Claims Procedure...............................................................................47
11.06 Delegating Responsibility......................................................................47
ARTICLE XII - MISCELLANEOUS......................................................................................49
12.01 Right to Terminate.............................................................................49
12.02 Plan Voluntary on Part of Employer.............................................................49
12.03 Benefits Not Subject to Creditors' Claim.......................................................49
12.04 Trust Agreement................................................................................49
12.05 Assets for Exclusive Benefits to Participants..................................................49
12.06 Nonguarantee of Employment.....................................................................50
12.07 Amendment......................................................................................50
12.08 Acts by Trustee................................................................................50
12.09 Laws of New Jersey.............................................................................50
12.10 Distribution to Minor or Incompetent Beneficiary...............................................50
12.11 Construction...................................................................................50
12.12 Merger or Consolidation........................................................................50
12.13 Discretionary Action...........................................................................51
12.14 Lost Beneficiaries; Escheat....................................................................51
12.15 Action by the Employer.........................................................................51
ARTICLE XIII - SIGNATURES........................................................................................52
</TABLE>
iii
<PAGE> 6
ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate
Account established and maintained on behalf of a Participant to which shall be
credited the Participant's share of Employer Matching Contributions and the
share of the net gains or losses of the Trust attributable to such
contributions. The Employer Matching Contribution Account shall be subject to
the vesting provisions of Article III.
(c) Voluntary Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the nondeductible Voluntary Contributions arising only from any
recharacterization of Elective Contributions pursuant to Section 5.07, and the
share of the net gains or losses of the Trust attributable to said Voluntary
Contributions. The Voluntary Contribution Account shall be fully vested and
nonforfeitable at all times.
(d) ESOP Contribution Account. The separate Account maintained
on behalf of a Participant to which were credited contributions based on
Compensation paid or accrued on or before December 31, 1986, and the share of
net gains or losses of the Trust attributable to such contributions. The ESOP
Contribution Account shall be fully vested and nonforfeitable at all times.
(e) Company Retirement ("CORE") Account. The separate Account
established and maintained on behalf of a Participant who is an employee of the
Lenox Merchandising division and who is employed at an "off-site" store which
does not share a common site with other Lenox facilities, to which shall be
credited the Nonelective Contributions provided under Section 5.01, and the
share of the net gains or losses of the Trust Fund attributable to such
contributions. The CORE Account shall be subject to the vesting provisions of
Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, the Accounting Date shall be December 31. Effective as soon as
administratively practicable after January 1, 1992, account valuations shall be
performed on a daily basis.
1
<PAGE> 7
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements below, then the Beneficiary shall be the person(s)
in the first of the following classes surviving at the death of the Participant:
(i) widow or widower, or (ii) the Participant's estate.
Any election by a Participant of a designated Beneficiary other than
Participant's Spouse is effective only if the Participant's Spouse consents to
the election in writing, it is witnessed by a Plan representative or a notary
public, and the consent is irrevocable and acknowledges the effect of the
election and the specific alternate Beneficiary. Any consent by a Spouse (or
establishment that such consent may not be obtained) is effective only with
respect to that Spouse.
Spousal consent is not required, however, if the Participant
establishes to the satisfaction of the Plan representative that such consent may
not be obtained because there is no Spouse, or the Spouse cannot be located. The
Secretary of the Treasury may prescribe regulations specifying other
circumstances under which the Spouse's consent may be waived.
A revocation of a prior Beneficiary designation may be made by a
Participant without spousal consent at any time prior to commencement of
benefits. The number of revocations shall not be limited. Any new Beneficiary
designation will require spousal consent to such change in the manner set forth
above unless the prior consent acknowledged that the Spouse had the right to
limit consent to a specific Beneficiary and the Spouse voluntarily chose to
relinquish that right. A Beneficiary designation may be changed by submitting a
new notice to the Plan Administrator. Such a notice is not effective until the
Plan Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
2
<PAGE> 8
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence from work is for reasons referred to
in this Section, and (2) the number of days for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) payments made in lieu of Lenox, Incorporated Supplemental
Executive Retirement Plan and/or Lenox, Incorporated Supplemental
Retirement Income Plan benefits; and
(d) any payments under a nonqualified deferred compensation
plan.
3
<PAGE> 9
In the Employee's first year of participation, Compensation is
recognized as of the Employee's entry date into the Plan.
Compensation in excess of $200,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d). If the aggregate Compensation of the "Family Group"
exceeds $200,000, (as indexed), the Compensation considered under the Plan for
each Family Group member is proportionately reduced so the total equals $200,000
(as indexed) (except for purposes of determining the portion of Compensation up
to the integration level, if this Plan provides for permitted disparity).
"Family Group" includes a Participant who owns more than 5% interest in any
entity comprising the Employer or is one of ten Highly Compensated Employees
paid the greatest Compensation during the Plan Year, and the Participant's
Spouse or children under age 19 (who are Participants at the close of the period
used to compute Compensation). For Plan Years beginning before January 1, 1989,
the $200,000 limit (without regard to family aggregation) shall apply only for
Top Heavy Plan Years and shall not be adjusted.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.07) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
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<PAGE> 10
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.09 Employee. Any person employed by Lenox China-Oxford, Lenox
China-Kinston, Hartmann Luggage, and Lenox Collections; salaried employees of
Lenox, Incorporated, Lenox Crystal, and Lenox China Pomona; salaried and hourly
employees of Lenox Merchandising; salaried and hourly employees of Lenox
Merchandising Retail Stores from the Effective Date through July 1, 1992;
salaried and hourly employees of Crouch and Fitzgerald from the Effective Date
through July 1, 1992; non-retail store nonbargained salaried and hourly
employees of Dansk International Designs, Ltd., effective October 1, 1994;
non-retail store nonbargained salaried and hourly employees of Gorham, Inc.
effective October 1, 1994. Employee shall include any Leased Employee. However,
the term Employee excludes the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between employee
representatives and the Employer, provided that (i) retirement benefits
were the subject of good faith bargaining between the employee
representatives and the Employer; and (ii) the collective bargaining
agreement does not expressly provide that the employee is eligible for
initial or continued participation in the Plan; and
(b) any person employed as an independent contractor; and
(c) any hourly employee of J. R. Wood and Sons, Puerto Rico,
Inc.
1.10 Employer. Lenox, Incorporated or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Notwithstanding any other provisions of this Section, any business
entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired by the Employer or its
Affiliated Employers that was not participating in the Prior Plan on January 1,
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<PAGE> 11
1990, may adopt this Plan for its employees and become an adopting Employer only
after the Executive Committee of the Board of Directors of Brown-Forman
Corporation approves its participation and the conditions set out in Section
10.01 are met. Until the requirements of the preceding sentence are satisfied,
none of such entity's employees are eligible to participate in this Plan.
1.11 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.12 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to section 415(d) of the Code); (ii) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received Compensation during such year that is
greater than 50 percent of the dollar limitation in effect under section
415(b)(1)(A) of the Code. The term highly compensated employee also includes:
(i) employees who are both described in the preceding sentence if the term
"determination Year is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most compensation from the
employer during the determination year; and (ii) employees who are 5 percent
owners at any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former employee or
a highly compensated employee who is one of the 10 most highly compensated
employees who is ranked on the basis of Compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated
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<PAGE> 12
employee. For purposes of this section, family member includes the spouse,
lineal ascendants and descendants of the employee or former employee and the
spouses of such lineal ascendants and descendants.
1.13 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hour of
Service is credited no more than once to a single Employee, even though it may
fall within more than one of categories (i), (ii) and (iii) of the preceding
sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such payment is made or due under a plan maintained solely to
comply with applicable worker's compensation, or unemployment compensation or
disability insurance laws; (iii) Hours of Service are not credited for a payment
which solely reimburses an Employee for medical or medically related expenses
incurred by the Employee; and (iv) Hours of Service are not credited to an
Employee for payments made by this Plan or any other pension or profit sharing
plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with
(i) ten (10) Hours of Service for each day for which the
Employee is required to be credited with at least one
(1) Hour of Service under this Section;
(ii) forty-five (45) Hours of Service for each week for
which the Employee is required to be credited with at
least one (1) Hour of Service under this Section; or
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<PAGE> 13
(iii) hours Worked, as defined in Labor Regulation Section
2530.200b-3(d)(3)(i) in which 870 Hours Worked are
equivalent to 1,000 Hours of Service, and 435 Hours
Worked are equivalent to 500 Hours of Service; or
(iv) hours of Service determined on the basis of periods
of employment which are the payroll periods
applicable to the Employee. An Employee is credited
with Hours of Service, determined in accordance with
the following table, for each payroll period in which
the Employee actually has at least one (1) Hour of
Service:
PAYROLL PERIOD HOURS OF SERVICE CREDITED
-------------- -------------------------
weekly 45
semi-monthly 95
monthly 190
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours of Service to which the Employee is
entitled under this Section, such other credit as may be prescribed by Federal
laws relating to military and veterans' reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.14 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
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<PAGE> 14
1.15 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.16 Normal Retirement Age. A Participant's 65th birthday.
1.17 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance begins on the second
(2nd) twelve (12) month anniversary of the first day the individual was absent
from work. The period between the first and second (2nd) anniversaries of the
first (1st) day of absence from work is neither a period of service nor a Period
of Severance. For purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the individual, (3) by
reason of the placement of a child with the individual in connection with the
adoption of a child by the individual, or (4) for purposes of caring for a child
for a period beginning immediately following the child's birth or placement.
1.18 Plan Year. January 1 to December 31, the accounting year of the
Plan.
1.19 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.20 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
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<PAGE> 15
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury; or
(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
1.21 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that twelve (12) Months of Service (thirty days are
deemed to be a month in the case of the aggregation of fractional months) or
three hundred sixty-five (365) days of service equal a whole Year of Service.
For purposes of vesting, after calculating the Participant's period of service
as provided in this section, the Plan may disregard any remaining less than
whole year, twelve (12) month, or three hundred sixty-five (365) day period of
service. An Employee will receive credit for the aggregate of all Years of
Service commencing with the Employee's first day of employment and ending on the
date a Break in Service begins.
Subject to the Break in Service provisions of Section 1.05, the Elapsed
Time provisions of Section 1.08, the Hours of Service provisions of Section 1.13
and the Period of Severance provisions of Section 1.17,
(a) former employees of Athalon Products, Ltd. who became
Employees as of December 23, 1988, are credited with service for eligibility and
vesting purposes for all Years of Service with Athalon Products, Ltd. prior to
December 23, 1988; such Employees are credited with service for contribution
purposes for all Years of Service beginning on or after December 23, 1988,
during which the Employee is a Participant; and
(b) employees of the Dansk and Gorham divisions who became
Employees on October 1, 1994, are credited with service for eligibility and
vesting purposes for all Years of Service since the acquisition date (July 3,
1991) or, if later, the Employee's date of hire; such Employees are credited
with service for contribution purposes for all Years of Service beginning on or
after October 1, 1994.
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ARTICLE II - PARTICIPATION
2.01 Eligibility. Upon filing an application with the Employer, an
Employee becomes a Participant as of the first day of the month coinciding with
or next following the date the Employee completes a Year of Service with the
Employer.
For purposes of this Section, an Employee is a person on a United
States or Puerto Rican payroll, including an Employee whose remuneration is
determined by applying a stated percentage rate to the orders booked and sold
from an assigned territory, actually engaged in the business of the Employer and
not an excluded Employee as defined in Section 1.09.
Participants in the Prior Plan (as of the Effective Date of this Plan)
are not excluded from this Plan because of the requirements of this Section.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.10 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
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<PAGE> 17
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
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<PAGE> 18
ARTICLE III - VESTING
3.01 Fully Vested and Nonforfeitable Accounts. A Participant's Elective
Contribution Account, Voluntary Contribution Account, and ESOP Contribution
Account are fully vested at all times. The Employer Matching Contribution
Account of Employees who were Participants in the Prior Plan on June 30, 1988,
shall be fully vested and nonforfeitable at all times. The Employer Matching
Contribution Account of Employees who become Participants on or after July 1,
1988, shall be fully vested and nonforfeitable as set out below.
3.02 Vesting of Other Accounts. A Participant's Employer Matching
Contribution Account and CORE Account are fully vested upon the first of the
following events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Service for vesting
purposes is taken into account on the basis of Elapsed Time. For purposes of
this Section, whether service with a business entity (including but not limited
to new entrepreneurial ventures, new divisions, or Affiliated Employers) created
or acquired by the Employer or its Affiliated Employers that was not a
participant in the Prior Plan on January 1, 1990, shall be deemed to be service
with the Employer will be determined by the Executive Committee of the Board of
Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
Vested Percentage
Years of Service of Account
---------------- ----------
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
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<PAGE> 19
3.05 Vesting Schedule/CORE Account. The vested portion of a
Participant's CORE Account prior to the occurrence of an event stated in Section
3.02 is a percentage of such Account determined on the basis of Years of Service
according to the following schedule:
Vested Percentage
Years of Service of Account
---------------- ----------
Less than 5 years 0%
5 years or more 100%
3.06 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If
a terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service (only a single Break in Service applies, if completed
prior to the first day of the first Plan Year in 1985), all post-break
service will be disregarded in determining the vested percentage of
such Participant's Account which accrued prior to the break. However,
all Years of Service (both pre-break and post-break) will count for
purposes of vesting the Participant's Account which accrues after the
break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), all service after the break is disregarded in determining the
vested percentage of the Participant's Account that accrued prior to
the break. Further, such Participant's pre-break service counts for
purposes of determining the vested percentage of the Participant's
Account which accrues after the break only if upon reemployment the
number of consecutive Breaks in Service is less than the aggregate
number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
Service earned prior to the first day of the first Plan Year
in 1985 is disregarded if the minimum participation and minimum vesting
rules then in effect did not require service to be taken into account.
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<PAGE> 20
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
3.07 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.08 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.09 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change. However, for Plan Years
beginning before January 1, 1989, or with respect to Employees who do not
complete one Hour of Service in a Plan Year beginning after December 31, 1988,
"5 years" shall be substituted for "3 years" in the preceding sentence.
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan
Administrator.
3.10 Former Employees of Lenox Awards Division. A Participant employed
at Lenox Awards division on February 26, 1990, and whose employment with Lenox,
Incorporated terminated
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<PAGE> 21
on or after February 26, 1990 as a direct result of the divestiture of the Lenox
Awards division, is fully vested and has a nonforfeitable right to the
Participant's Account(s) under the Plan.
3.11 Former Employees of Athalon Successories Division. A Participant
employed at the Athalon Successories unit on March 12, 1992, and whose
employment terminated on or after March 12, 1992, as a direct result of the
divestiture of the Successories unit, is fully vested and has a nonforfeitable
right to the Participant's Account(s) under the Plan.
3.12 Former Employees of Athalon Denver Facility. A Participant
employed at the Athalon Denver Facility on September 30, 1992, and whose
employment terminated on or after September 30, 1992, as a direct result of the
closing of the Athalon Denver facility, is fully vested and has a nonforfeitable
right to these Participant's Account(s) under the Plan.
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<PAGE> 22
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any reason,
and upon Participant's filing of the necessary forms, documentation,
and application for benefits, initial payment of Participant's benefits
will begin as soon as administratively feasible;
However, unless the Participant elects in writing a later
commencement date, the payment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3) termination
of employment with the Employer.
(b) Under no circumstances will distribution of benefits begin
later than April 1 of the calendar year following the year in which the
Participant attains age 70-1/2 (the "required beginning date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01, if
the value of the Participant's vested benefit derived from Employer and Employee
contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the first
day on which the Participant is entitled to such benefits.
If a distribution is one to which Sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under Section 1.411-(a)-11(c) of the Income Tax Code Regulations
is given, provided that:
(1) The Plan Administrator clearly informs the participant
that the participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and
(2) The participant, after receiving the notice, affirmatively
elects a distribution.
No consent shall be required if a distribution is required to satisfy
Code section 401(a)(9) or 415. In addition, upon termination of the Plan if the
Plan does not offer the option of a commercial annuity, the Participant's
account balance may, without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan (other than an
employee stock ownership plan under Code section 4975(e)(7)) within the same
controlled group.
An account balance is immediately distributable if any part of it could
be distributed to the Participant (or Surviving Spouse) before the Participant
attains (or would have attained) the later of
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Normal Retirement Age or age 62. Absent such Participant's consent to receive
benefits in excess of $3,500, distribution of benefits shall begin no sooner
than the later of age 62 or Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for consent of the Participant.
For purposes of this Section, if the value of a Participant's vested account
balance is zero, the Participant shall be deemed to have received a distribution
of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods as elected by the Participant:
(a) Single Payment. Payment may be in one lump-sum payment in
cash in the year in which distribution is to be made.
(b) Lifetime Payments. Payments may be made over a period not
extending beyond the life expectancy of the Participant or the joint
life expectancies of the Participant and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a Participant dies before
having received the entire vested balance of that Participant's benefits, such
remaining vested balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid to or for the
benefit of the Participant's Beneficiary in a lump sum payment in cash.
4.05 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding any
provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life expectancy of
the Participant or the joint life and last survivor expectancy
of the Participant and the Participant's designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the designated Beneficiary, the amount required
to be distributed for each calendar year, beginning
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<PAGE> 24
with distributions for the first distribution calendar year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(ii) For calendar years beginning before January 1,
1989, if the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount available
for distribution is paid within the life expectancy of the
Participant.
(iii) For calendar years beginning after December 31,
1988, the amount to be distributed each year shall not be less
than the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life expectancy or
(2) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant
shall be distributed using the applicable life expectancy in
subsection (i) above as the relevant divisor without regard to
proposed regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made on
or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(v) If the participant's benefit is distributed in
the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of section 401(a)(9) of the Code and the proposed
regulations thereunder.
(c) Calculation of Life Expectancy. A determination of life
expectancy and joint and last survivor life expectancy will be made by
use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the Participant
or Spouse by the time distributions are required to begin, life
expectancies will be recalculated annually. Such election shall be
irrevocable. The life expectancy of a non-Spouse Beneficiary may not be
recalculated.
4.06 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred to
an account holding potential forfeitures. This account shall continue
to be adjusted by earnings and losses of the Trust; provided, however,
in the case
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<PAGE> 25
of any Participant who has incurred five (5) or more consecutive Breaks
in Service (Five Year Break in Service) prior to the resumption of
employment with the Employer, the non-vested portion of such terminated
Participant's benefits, and all regular periodic adjustments thereto,
shall be deemed forfeited and shall be used to reduce the Employer's
contribution for the Plan Year within which the fifth Break in Service
occurs. Upon such forfeiture, such terminated Participant's Account
shall be closed and if the vested Account balance has not been paid to
the Participant, the vested portion of such Account shall be
transferred to a separate Fully Vested Account for such terminated
Participant's benefit; provided, however, at such time as the
terminated Participant resumes employment with the Employer, an
additional separate Account shall be established for the Participant's
benefit as if the Participant were a new Participant, which Account
shall be maintained separate and distinct from the Participant's Fully
Vested Account, until such Account becomes fully vested at which time
the Accounts may be merged.
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be allocated
as of the Accounting Date of the Plan Year of termination of a
non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as though
a Five Year Break in Service had occurred. If less than the entire
vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the denominator
of which is the total value of the vested Employer derived account
balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a terminated
Participant, who has received a distribution of the entire
vested portion of such Participant's benefits is reemployed by
the Employer prior to a Five Year Break in Service, and repays
to the Plan (in cash and/or kind, as initially distributed) an
amount equal to the full amount of such distribution
(repayment), then that portion of such terminated
Participant's benefits which was forfeited at the time of
distribution shall be reinstated by the Employer (in cash
and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's reemployment;
provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the Participant
is completed by the earlier of: (1) the last day of the Plan
Year within which the Participant has five consecutive Breaks
in Service or (2) five years after the Participant is
reemployed by the Employer. If a terminated Participant incurs
five consecutive Breaks in Service, repayment will not be
permitted.
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<PAGE> 26
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if previously
forfeited shall be reinstated (in cash or in kind as initially
forfeited) to constitute the opening balance of such
Participant's Account.
(d) Source of Restoration. Restoration pursuant to subsection
(c) of this Section shall be made from the following sources in the
order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
(2) From forfeitures applicable as of the Accounting
Date of the Plan Year within which repayment is completed; or
if insufficient,
(3) From the Employer contributions for the Plan Year
within which such repayment is completed; and if necessary,
for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration. Restoration
of a forfeiture pursuant to this subsection (e) shall in all events be
completed by the Accounting Date of the Plan Year next following the
Plan Year within which the repayment is completed.
4.07 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of Article
IV of the Plan.
4.08 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a terminated
Participant is reemployed by the Employer.
4.09 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility Act
of 1982, and if the Participant filed such election in a timely manner with the
Plan Administrator, said election shall be effective unless and until revoked by
the Participant. If an election is revoked any subsequent distributions must
meet the requirements of this Article IV.
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<PAGE> 27
4.10 Pre-Retirement Distribution. A Participant who has been a
Participant for at least two years and who attains age 59 1/2 may elect to
receive a distribution of the entire vested amount credited to such
Participant's Accounts, or a portion thereof, excluding amounts from the CORE
Account and the ESOP Contribution Account. Any Participant who withdraws
Elective Contributions shall not be permitted to make Elective Contributions
until six (6) months have elapsed from the date on which such withdrawal occurs.
A Participant who receives such a distribution shall continue to participate in
the Plan. Any such distribution shall be made in a manner consistent with the
requirements of this Article IV, including all notice and consent requirements.
4.11 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for the CORE Account, the ESOP Contribution Account,
any Special Employer Contributions, and earnings credited to the
Participant's Elective Account after December 31, 1988) of an amount
necessary to satisfy the Participant's immediate and heavy financial
need where the Participant lacks other available resources on account
of:
(i) accident or illness involving the Participant or
a member of the Participant's immediate family or household or
other dependant,
(ii) tuition and related educational fees for the
next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence of
the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or mortgage
foreclosure on the Participant's principal residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions shall be
carried out under the following rules:
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<PAGE> 28
(i) The Participant shall apply for the distribution
under procedures fixed by the Plan Administrator.
(ii) The application shall include a signed statement
of the facts causing financial hardship and any other facts
required by the Plan Administrator.
(iii) The distribution shall not exceed the amount of
the financial need.
(iv) The Participant shall obtain all distributions
and nontaxable loans available under all plans of the
Employer.
(v) The Participant's Elective Contributions under
all plans of the Employer for the year immediately following
the year of the hardship distribution shall not exceed $7,979
(adjusted pursuant to the method provided in Code section
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.12 Loans to Participant.
(a) The Trustee may, if the Plan Administrator directs, lend amounts in
accordance with this Section and the Trust Agreement, provided, however, that
Participant loans are not permitted from the Participant's CORE Account or the
Participant's ESOP Contribution Account.
Loans may be made to Participants and Beneficiaries under the following
circumstances: (1) loans are made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans are not made available
to Highly Compensated Employees in an amount greater than the amount made
available to other employees; (3) loans bear a reasonable rate of interest; (4)
loans are adequately secured; and (5) loans provide for repayment over a
reasonable period of time.
(b) Any loan granted or renewed on or after the last day of the first
Plan Year beginning after December 31, 1988, shall be made pursuant to a written
Loan Program which shall be contained in a separate document incorporated herein
by reference, and shall include the following:
(1) the identity of the person(s) or position(s)
authorized to administer the loan program;
(2) the procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on types and amounts of loans;
(5) the procedure for determining a reasonable interest
rate;
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<PAGE> 29
(6) the types of collateral which may secure a loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
(c) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by any plan maintained by the Employer) shall be
limited to the lesser of:
(1) $50,000, reduced by the amount of principal repaid on any
prior loan within the 12-month period ending on the date a loan is
made, or
(2) the greater of (a) 1/2 the Participant's vested Account
balance, or (2) $10,000.
(d) Loans shall provide for level amortization with payments to be made
at least quarterly over a period not to exceed five (5) years.
(e) No distribution shall be made to any Participant or to a
Beneficiary of any Participant unless and until all unpaid loans, including
accrued interest thereon have been liquidated.
(f) Any loan made pursuant to this Section is earmarked as a Directed
Investment in the borrowing Participant's Account, pursuant to Section 7.10.
4.13 Limitation for Qualified Domestic Relations Order. All rights and
benefits, including elections, provided to a Participant in this Plan shall be
subject to the rights afforded to any Alternate Payee under a Qualified Domestic
Relations Order as those terms are defined in Code section 414(p). Upon receipt
of a Qualified Domestic Relations Order which orders plan benefits for a
Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may be
charged against and paid from the Accounts of the Participant named in the
order.
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<PAGE> 30
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Nonelective Contribution by Employer. For the Plan Year beginning
January 1, 1991 and each Plan Year thereafter, the Employer shall contribute to
the Trust a Nonelective Contribution on behalf of each Participant who is an
Employee of the Lenox Merchandising division and who is employed on the last day
of the Plan Year at designated stores which do not share a common site with
other Lenox facilities ("off-site" stores). The amount of the Nonelective
Contribution is equal to three and one-half percent (3 1/2%) of the Compensation
earned by the Participant during the portion of the Plan Year the Participant is
employed at the designated off-site store or stores; provided further that the
nonelective contribution for the 1992 Plan Year for those Participants who
ceased to be eligible for this Plan upon becoming Participants in the Lenox
Retail Savings and Investment Plan during the 1992 Plan Year shall be equitably
adjusted as determined by the Plan Administrator on a uniform, nondiscriminatory
basis. The nonelective contributions made pursuant to this Section are credited
to the Participant's Company Retirement (CORE) Account in accordance with
Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be credited
to each Participant's Elective Account in accordance with Section 7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. Through March
31, 1994, the amount of the Matching Contribution shall be equal to 50% of the
Participant's Compensation deferred up to a maximum of 2 1/2% of Compensation.
Effective April 1, 1994, the amount of the Matching Contribution shall be equal
to 60% of the Participant's Compensation deferred. Effective April 1, 1995, the
amount of the Matching Contribution shall be equal to 70% of the Participant's
Compensation deferred. Effective April 1, 1996, the amount of the Matching
Contribution shall be equal to 75% of a Participant's Compensation deferred.
However, in applying the foregoing matching percentages effective April 1, 1994,
only Participant Elective Contributions up to 5% of Compensation shall be
considered. The Matching Contribution shall be credited to the Employer Matching
Contribution Account of eligible Participants in accordance with Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the foregoing
Sections of Article V, to the extent that any deduction for an Employer
contribution is disallowed, such contribution (to the extent disallowed) may at
the option of the Employer be returned to the Employer provided the return is
accomplished within one (1) year after the disallowance of the deduction.
5.05 Limits on Elective and Matching Contributions. For each Plan Year,
the Plan shall satisfy the nondiscrimination tests of Code sections 401(a)(4),
401(k)(3) and 401(m) in accordance
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<PAGE> 31
with Regulation 1.401(k)-1 and proposed Regulation 1.401(m)-1 and -2. The Code
and Regulation sections are incorporated by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible Employees,
or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
For Plan Years beginning after December 31, 1988, to prevent the
multiple use of the tests in this subsection (b), if a Highly Compensated
Participant is eligible to make elective deferrals pursuant to any cash or
deferred arrangement maintained by the Employer or an Affiliated Employer, or to
make Employee contributions or receive matching contributions under this or any
other plan maintained by the Employer or an Affiliated Employer, such
Participant's Actual Contribution Percentage shall be reduced pursuant to
Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year by the
Participant's Compensation for such Plan Year. The ADP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ADPs of each eligible Participant in the group, calculated to the
nearest one-hundredth of one percent. Elective Contributions allocated to
non-Highly Compensated Participants shall not include Excess Deferrals
(determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions and Voluntary Contributions
(including Excess Contributions recharacterized as Voluntary Contributions) for
the Plan Year by the Participant's Compensation for such Plan Year. The ACP for
each group ((i) Highly Compensated Employees and (ii) non-Highly Compensated
Employees) is the average of the ACPs of each eligible Participant in the group
calculated to the nearest one-hundredth of one percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
For purposes of determining the ADP and ACP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated Employees,
the Elective Contributions, Matching Contributions, Voluntary Contributions and
Compensation of such Participant shall include the Elective Contributions,
Matching Contribution, Voluntary Contribution and Compensation of "family
members" (as defined in Code section 414(q)(6)), and the family group shall be
treated as one Highly Compensated Participant. Family members shall be
disregarded for purposes of determining the ADP and ACP of the group of
non-Highly Compensated Participants.
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<PAGE> 32
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions, Matching Contributions or Voluntary Contributions are made, such
contributions on behalf of such Highly Compensated Participant shall be
aggregated in determining the ADP and ACP of such Participant. For Plan Years
beginning after December 31, 1988, if the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated to satisfy Code section 401(k) and 401(m) only if they
have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the end of
the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.05.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears to
the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible Participant or
group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.03. If Special
27
<PAGE> 33
Employer Contributions are made for purposes of satisfying one of the
nondiscrimination tests outlined in Section 5.05, a separate accounting shall be
maintained within the applicable Elective Contribution Accounts to prevent such
Special Employer Contributions from being taken into consideration for purposes
of determining whether any other contributions satisfy the remaining
nondiscrimination tests.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated Participants
exceeds the nondiscrimination tests specified in Section 5.05, the Plan
Administrator shall distribute to the Highly Compensated Participant having the
highest ADP such Participant's excess amounts ("Excess Contributions") and
income allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ADP equals
the ADP of the Highly Compensated Participant having the second highest ADP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Contributions for a Highly Compensated Participant is then
equal to the total of elective and other contributions taken into account for
the ADP test, minus the product of the employee's ADP (as determined after
application of this Section) and the employee's compensation used in determining
that ratio. The amount of Excess Contributions to be distributed or
recharacterized shall be reduced by any previous distribution of Excess
Deferrals (pursuant to Section 6.01) for the employee's taxable year ending in
the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be: (i) distributed to the Participant, and/or (ii)
recharacterized as an amount distributed to the Participant and contributed to
the Plan as a Voluntary Contribution. Distribution may be postponed but not
later than the close of the Plan Year following the Plan Year in which the
Excess Contribution was allocable; however, if the Excess Contributions are not
corrected within two and one-half months after the Plan Year end, a 10% excise
tax will be imposed on the Employer on such amounts. Recharacterization may be
combined with distribution to correct Excess Contributions. The Employer shall
designate the distribution/recharacterization as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution and/or recharacterization shall be made first from
unmatched Elective Contributions, and then simultaneously from matched Elective
Contributions and Matching Contributions which relate to such Elective
Contributions. However, any such Matching Contributions which are not vested
shall be forfeited in lieu of distribution.
For purposes of applying the Top Heavy rules, recharacterized Excess
Contributions shall continue to be treated as Elective Contributions. Amounts
recharacterized shall continue to be subject to the nonforfeitability
requirements and distribution restrictions that apply to Elective Contributions.
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<PAGE> 34
Correction of Excess Contributions of a Highly Compensated Participant
whose ADP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(k)-1(f)(5)(ii).
5.08 Correction of Excess Employer Matching Contributions and Voluntary
Contributions. If the amount of Matching Contributions or Voluntary
Contributions allocated to the group of Highly Compensated Participants exceeds
the nondiscrimination tests specified in Section 5.05, the Plan Administrator
shall distribute to the Highly Compensated Participant having the highest ACP
such Participant's excess amounts ("Excess Aggregate Contributions") and income
allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ACP equals
the ACP of the Highly Compensated Participant having the second highest ACP.
This process shall continue until the nondiscrimination tests are satisfied. The
amount of Excess Aggregate Contributions for a Highly Compensated Employee is
then equal to the total of voluntary, matching and other contributions taken
into account for the ACP test, minus the product of the Employee's ACP (as
determined after application of this Section) and the Employee's Compensation
used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed within
two and one-half months after the Plan Year end. Forfeiture/distribution may be
postponed but not later than the close of the Plan Year following the Plan Year
in which the excess amount was allocable; however, if the Excess Aggregate
Contributions are not corrected within two and one-half months after the Plan
Year end, a 10% excise tax will be imposed on the Employer on such amounts. The
Employer shall designate the forfeiture/distribution as Excess Aggregate
Contributions. The order of forfeiture/distribution shall be as follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
The determination of Excess Aggregate Contributions for any Plan Year
shall be made after first determining the amount of any Excess Contributions to
be recharacterized as Voluntary Contributions for the Plan Year of the Plan
subject to Code section 401(k) ending with or within the Plan Year of this Plan.
Correction of Excess Aggregate Contributions of a Highly Compensated Participant
whose ACP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(m)-1(e)(2)(iii).
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<PAGE> 35
5.09 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being qualified
by the Internal Revenue Service pursuant to Code sections 401 and 501 and other
applicable sections. If the Internal Revenue Service rules that such Plan is not
qualified, the Employer reserves the right to recover contributions which were
made prior to a final ruling from the Internal Revenue Service with respect to
the initial determination as to qualification of the Plan and Trust. Any
contribution of the Employer shall be returned to the Employer within one (1)
year after the date of the final ruling with respect to the denial of initial
qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy for
the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the reasons
therefore shall be recorded by the Employer and communicated to the Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect to
defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two percent (2%) and fifteen percent (15%) (in
increments of 1%) of the Participant's Compensation for the Plan Year in
question, but shall not exceed a dollar amount as adjusted pursuant to the
method provided in Code section 415(d) for the Participant's taxable year. The
Plan Administrator may fix lower maximums for Highly Compensated Employees to
satisfy the nondiscrimination tests of Section 5.05.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.07 for the Plan
Year beginning within the Participant's taxable year.
If the amount allocated to the Participant's Elective Contribution
Account for the Plan Year is less than the maximum amount specified in this
Section, the Participant may elect to have the Employer make a lump-sum Elective
Contribution to the Trust on behalf of the Participant, of an amount not less
than two percent (2%) or more than fifteen percent (15%) (in increments of 1%)
of the Participant's Compensation for the Plan Year in question, subject to the
limitation in this Section. The lump-sum Elective Contribution may be made in
January or December of the Plan Year. Such contribution shall be made as soon as
administratively feasible following the date on which such amount would
otherwise have been paid to the Participant.
6.02 Election Request. Elective Contributions for Participants shall be
such amounts as the Participant elects to have contributed on the Participant's
behalf pursuant to a salary reduction Election Request completed by the
Participant and filed with the Employer. Under no circumstances may an Election
Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the Elective
Contribution (in accordance with the Election Request form) by notifying the
Employer and the Plan Administrator at least fifteen (15) days prior to the date
such changes in contribution are to take effect, or at any other time mutually
agreeable between the Employer and the Participant, provided that all
Participants under similar circumstances are treated alike.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
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(i) the Participant's retirement, death, Total and Permanent
Disability, separation from service, or attainment of age 59 1/2;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such corporation if the
Participant continues employment with the corporation acquiring such
assets;
(iv) the sale by the Employer to an unrelated entity of its
interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment with
such subsidiary;
(v) the Participant's financial hardship, pursuant to Section
4.13; or
(vi) pursuant to Sections 6.01 and 5.07.
6.05 Voluntary Contributions. Voluntary contributions are permitted to
the extent such contributions are excess contributions recharacterized as
voluntary contributions in accordance with Section 5.07.
6.06 Withdrawal from Voluntary Contribution Account. Any withdrawal
from the Participant's Voluntary Contribution Account is subject to the
distribution rules provided in Section 6.04.
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ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Nonelective Employer Contribution. Each Plan Year
the Nonelective Employer Contribution shall be allocated to the CORE Accounts of
all eligible Participants employed on the last day of the Plan Year in the same
manner as the contribution is determined pursuant to Section 5.01.
7.02 Allocation of Elective Contributions. Each Plan Year the Employer
shall allocate the Elective Contribution made on behalf of a Participant subject
to such Participant's Election Request to the Elective Contribution Account of
such Participant in the same manner as the contribution is determined pursuant
to Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section 5.03.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to which
the contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any amounts
which became forfeitures shall first be made available to reinstate previously
forfeited account balances of reemployed Participants, if any. The remaining
forfeitures shall be used to reduce the Employer's matching contribution for the
current Plan Year.
7.05 Amendment of Allocation Eligibility. Notwithstanding anything to
the contrary, for Plan Years beginning after December 31, 1989, if this is a
Plan that would otherwise fail to meet the requirements of Code sections
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules shall
apply:
(a) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include
the minimum number of Participants who would not otherwise be eligible
as are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of this
paragraph shall be those who are actively employed on the last day of
the Plan Year and, when compared to similarly situated Participants,
have completed the greatest number of Hours of Service in the Plan
Year.
(b) If after application of paragraph (a) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and forfeitures for
the Plan Year shall be further expanded to include the minimum number
of
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Participants who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan Year
before terminating employment.
(c) Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
7.06 Maximum Additions to Participant's Account. Notwithstanding any
Plan provisions to the contrary, the maximum "Annual Additions" credited to any
Participant's Accounts and the "Annual Additions" to the account of the same
Employee as a Participant in any other defined contribution plan of the Employer
shall equal the lesser of: (1) thirty thousand dollars ($30,000), or, if
greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined in
Code section 415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer, and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the account of a
key employee (as defined in Code section 419(A)(d)(3)) under a welfare benefit
plan of the Employer. Annual Additions shall not include the transfer of funds
from one qualified plan to another, rollover contributions, repayment of a loan
made from the plan, repayment of distributions after cash-outs, and Employee
contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions and/or any voluntary
contributions credited for the Limitation Year to the extent the return
would reduce the excess amount in the Participant's Accounts;
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(b) Hold any remaining excess after the return of elective
and/or voluntary contributions in the Participant's Account to be used
to reduce Employer contributions in the next Limitation Year and
succeeding years if necessary;
(c) If an excess amount still exists and the Participant is
not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any Employer
or Employee contributions may be made to the Plan for that Limitation
Year; or
(d) Reduce Employer Matching Contributions to the Plan for
such Limitation Year by the amount of the suspense account allocated
and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains or
losses. Upon termination of the Trust any amounts held in such suspense account
shall not be distributed but shall be returned to the Employer to the extent
they cannot be allocated to Participants because of the limitations under Code
section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred compensation
which are not includible in the Participant's gross income in the year
in which contributed;
(b) any distributions from a plan of deferred compensation
(except from an unfunded nonqualified plan when includible in gross
income);
(c) Employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject to
a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
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(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually excludible
from the employee's gross income.)
For Limitation Years beginning after December 31, 1988, compensation
shall be limited to $200,000 as adjusted in the same manner as permitted under
Code section 415(d).
7.07 Overall Limit. In addition to the foregoing if any Participant is
(or has been) a Participant under any defined benefit plan of the Employer, the
sum of the Defined Benefit and Defined Contribution Fractions (defined below)
for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit Fraction for
any Limitation Year is a fraction, the numerator of which is the
Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount which
may be taken into account under Code section 415(b)(1)(B) for such
Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code section 415 for all Limitation Years beginning
before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and individual
medical accounts, as defined in section 415(1)(2) of the Code
maintained by the employer); and the denominator of which is the sum of
the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
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If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer which
were in existence on May 6, 1986, the numerator of this fraction will
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the excess of the
sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. the adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the annual
benefit under any other defined benefit plans or defined contribution plans
shall be reduced in order to achieve compliance with the limitations of Internal
Revenue Code Section 415 shall be determined by the Plan Administrator in such a
manner so as to maximize the aggregate benefits payable to such Participant. If
such reduction is under this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual contribution or
benefits required by this paragraph.
7.08 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.09 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.10 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee with
respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish
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written procedures, incorporated specifically as part of this Plan, relating to
Participant direction of investment under this Section 7.10.
(b) The Trustee will maintain a segregated investment Account
to the extent a Participant's Account is subject to Participant self-direction.
Each such segregated investment Account shall be adjusted with the earnings,
losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan qualify
as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are relieved of
fiduciary responsibility or liability for any losses resulting from a
Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.11 Periodic Adjustments to Account. The Account(s) held in trust for
the benefit of a Participant shall be adjusted in an equitable and reasonable
manner, generally to be determined as follows unless circumstances require
otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting Date,
before allocation of contributions and forfeitures, any increase or
decrease in the fair market value of the Trust since the immediately
preceding Accounting Date shall be computed by the Trustee, and such
increase or decrease shall be credited to or deducted from the
nonsegregated accounts of all Participants in the proportion that the
balance of each Participant's Accounts bears to the total current
balance of all Participant's Accounts. An equitable adjustment shall be
made to the Account(s) of any Participant receiving distributions
during the Plan Year.
(b) Determination of Increase or Decrease. For the purposes of
subsection (a) of this Section, the increase or decrease in the fair
market value of the Trust shall be the difference between the
following:
(i) The fair market value of the Trust on the
current Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting Date,
less
(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including any
amount falling due and paid from the Trust during such Plan
Year.
(c) Account Valuation for Distribution Purposes. For purposes
of benefit distribution, a Participant's Account shall be valued as of
the Accounting Date coincident with or immediately preceding the date
of distribution; (but in the case of a Participant's Voluntary
Contribution Account shall also include the amount of any voluntary
contributions made by the Participant after such Accounting Date):
provided, however, if the Plan Administrator directs payment of a
Participant's Accounts in any manner other than a single
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payment to be made prior to the next regular periodic adjustment of
Accounts such Participant's Accounts shall continue to receive regular
periodic adjustments as aforesaid, but shall no longer be increased by
the allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event that,
for whatever reason, distribution of a Participant's Account is to be
made in a single payment, such Account may, at the option of the Plan
Administrator, be adjusted for the purposes of such distribution in
order to account for any substantial changes in the value of the Trust
assets since such Account's most recent regular periodic adjustment. In
such event, the Plan Administrator shall restate the value of the Trust
assets in order to determine the percentage of increase or decrease in
the fair market value of all net Trust assets (deducting any advance
contributions and any voluntary contributions of Participants for the
Plan Year in question) as of the end of the month (hereinafter referred
to as the Interim Valuation Date) next preceding the date of
distribution of the Account. The Participant's Account, as of the
Accounting Date immediately preceding such Interim Valuation Date,
shall, for the purpose of distribution only, be adjusted to reflect
such increase or decrease, as the case may be, by multiplying such
Account by the percentage determined as aforesaid. Such interim
valuation percentage once determined shall be applied to the Accounts
of any other Participants who are to receive a distribution of their
Account in a single payment following such Interim Valuation Date but
prior to the next regular periodic adjustment of Accounts, or the next
Interim Valuation Date, whichever is earlier.
(e) Self-Directed Accounts. Participants segregated accounts
shall be adjusted with their separate increase or decrease.
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ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of the
Employer in which a Key Employee is a Participant, and (2) each other
plan of the Employer which enables any plan described in (1) above to
meet the requirements of Section 401(a)(4) or 410 of the Code. A
Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Top Heavy Vesting Schedule. If the Plan becomes Top Heavy, a
Participant's vested interest in such Participant's CORE Account shall be
determined in accordance with the following schedule:
Vested Percentage
Years of Service of Account
---------------- ----------
Less than 3 years 0%
3 years or more 100%
8.04 Compensation Limitation. For Plan Years beginning prior to January
1, 1989 in which the Plan is a Top Heavy Plan, Compensation shall be limited to
$200,000 for purposes of this Article.
8.05 Minimum Benefits. The provisions of Article VII notwithstanding, a
minimum contribution must be provided by the Employer contribution and/or
forfeitures to the account of each non-Key Participant equal to the lesser of
(1) 3% of Compensation, or (2) if the Employer has no defined benefit plan which
designates this Plan to satisfy Code section 401(a)(4) or 410, the largest
percentage of Employer contribution and/or forfeitures allocated to the Account
of a Key Employee. Such minimum contribution must be allocated to the account of
all non-Key Participants who are employed by the Employer on the Accounting
Date, regardless of the number of Hours of Service credited during the Plan Year
to which the contribution relates, regardless of whether or not the Participant
makes mandatory contributions for the Plan Year to which the contribution
relates, and regardless of the Participant's level of Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.06 Impact on Maximum Benefits. For any Plan Year in which the Plan is
a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be read by
substituting the number 1.00 for the number 1.25 wherever it appears therein,
unless the Plan meets the following additional minimum benefit requirements:
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(i) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant only in this Plan by substituting four
percent (4%) for three percent (3%) in Section 8.05;
(ii) If a Key Employee is a Participant in both this Plan and
a defined benefit plan included in a Required Aggregation Group which
is Top Heavy, the minimum allocation shall be provided for each non-Key
Employee who is a Participant in both this Plan and such a defined
benefit plan by substituting seven and one-half percent (7 1/2%) for
three percent (3%) in Section 8.05.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.07 Determination of Super Top Heavy. The Plan is Super Top Heavy if
as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group exceeds 90% of the sum of the account balances and/or present
value of accrued benefits of all Participants under this Plan and all Plans of
an Aggregation Group.
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ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. This section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former
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<PAGE> 49
employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover. A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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<PAGE> 50
ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown-Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by action
of its governing authority, may withdraw from the Plan after giving 90 days
advance notice to the Board of Directors of Brown-Forman Corporation, provided
the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
45
<PAGE> 51
ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint one
(1) or more persons or the Employer as the Plan Administrator who shall serve
without compensation from the Trust. The Plan Administrator is a named fiduciary
for purposes of the Employee Retirement Income Security Act of 1974. The
Employer shall notify the Trustee of the name or names of the Plan Administrator
and or any changes in Plan Administrator. The Plan Administrator shall serve
until resignation or dismissal by the Employer and vacancies shall be filled in
the same manner as the original appointments. The Board of Directors of the
Employer may dismiss the Plan Administrator at any time with or without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall have
the duty, full discretionary authority and full discretionary control to manage
the operation and administration of the Plan, including, but not limited to, the
duty and authority to:
(a) Records. Keep records regarding Participants' service with
the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic reports
to the Internal Revenue Service and Department of Labor as required by
law;
(c) Notices. Provide proper notification to Participants as
required by law;
(d) Administration of Benefits. Construe and interpret the
Plan, including supplying any omissions in accordance with the intent
of the Plan, decide all questions of eligibility, determine the amount,
manner and time of payment of any benefits hereunder, authorize the
payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such manner
as the Plan Administrator determines to be appropriate, information
explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon request,
such annual reports with respect to the administration of the Plan as
are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file (as it
may deem convenient or proper) reports of the financial condition, and
of the receipts and disbursements, of the Trust Fund from the Trustee;
46
<PAGE> 52
(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as set
forth in the Plan; and
(k) Generally. Exercise other powers and duties the Employer
may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions in
writing from the Plan Administrator on other matters and may rely and act upon
them.
11.05 Claims Procedure. The Plan Administrator shall establish a claims
procedure for the benefit of Participants and their Beneficiaries which shall:
(a) provide adequate notice in writing to any Participant or
Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
11.06 Delegating Responsibility. The Plan Administrator may delegate in
writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any
47
<PAGE> 53
such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The Trustee
shall have the right, in its sole discretion, by written instrument delivered
to the Plan Administrator, to reject and to refuse to exercise any such
delegated authority.
48
<PAGE> 54
ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest extent
permitted by law, none of the benefits under the Plan are subject to the claims
of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust Agreement
and said Trust Agreement is made a part hereof. The Trust and any income
therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as provided
in Article V, it shall not be possible (within the taxable year or thereafter)
for any part of the corpus or income to be used for purposes other than for the
exclusive benefit of the Participants or their Beneficiaries at any time prior
to the satisfaction of all liabilities with respect to Participants and their
Beneficiaries under the Trust.
49
<PAGE> 55
12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
If this Plan replaces a defined contribution plan which provided for
Early Retirement Benefits, the provisions of the prior plan relating to Early
Retirement shall govern for any Participant who was a Participant of the prior
plan and who satisfied the requirements for Early Retirement in the prior plan
as of the date of adoption of this Plan.
12.08 Acts by Trustee. The Employer shall not be responsible for any of
the acts of the Trustee.
12.09 Laws of New Jersey. The provisions of this Plan shall be
construed, administered, and enforced in accordance with the laws of New Jersey,
to the extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall include
the feminine. Whenever words are used herein in the singular, they shall be
construed as though they were used in the plural, in any case where they would
so apply.
12.12 Merger or Consolidation. In the event of a merger, consolidation
or transfer of assets and/or liabilities to any other Plan, each Participant
shall be entitled to a benefit immediately after the merger, consolidation, or
transfer (if the Plan then terminated) which is equal to or greater than the
benefit the Participant would have been entitled to receive immediately before
such transaction if the Plan had then terminated.
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<PAGE> 56
12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
51
<PAGE> 57
ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 22nd day of December, 1994.
LENOX, INCORPORATED
By : /s/ Milton B. Gillis
------------------------------------
MILTON B. GILLIS, Vice-President
52
<PAGE> 58
FIRST AMENDMENT
LENOX, INCORPORATED EMPLOYEE SAVINGS AND INVESTMENT PLAN
The restated Lenox, Incorporated Employee Savings and Investment Plan
was adopted by Lenox, Incorporated effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 5.06, Special Employer Contributions, of Article V is
amended by adding the following additional sentence to the final paragraph of
the section:
Further, the contributions shall satisfy the nondiscrimination
requirements in accordance with Regulation 1.401(k)-1(b)(5)
and Regulation 1.401(m)-1(b)(5), incorporated herein by
reference.
2. Section 5.07, Correction of Excess Elective Contributions, of
Article V is amended to delete all references to recharacterization of excess
contributions as voluntary contributions as the Plan does not allow such
voluntary contributions after December 31, 1995.
3. Section 6.01, Amount of Elective Contribution, is amended by adding
the following paragraph:
A Participant's elective contributions for his or her taxable
year under the Plan and all other plans, contracts and
arrangements of an employer will not exceed the amount of the
Section 402(g) limitation in effect for the calendar year with
or within which such taxable year begins. The Section 402(g)
limitation is the greater of $7,000.00 or the adjusted amount
determined by the Secretary of the Treasury.
4. Section 6.05, Voluntary Contributions, is amended in its entirety to
read as follows:
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<PAGE> 59
6.05 Voluntary Contributions. For the Plan Year
beginning January 1, 1996, voluntary contributions are no
longer permitted. Any voluntary contributions made prior to
that date shall be maintained in the Participant's Voluntary
Contributions Account.
5. Section 7.05, Amendment of Allocation Eligibility, is amended in its
entirety as follows:
7.05 Amendment of Allocation Eligibility. [Reserved.]
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Lenox, Incorporated Employee Savings and Investment Plan to be executed by its
duly authorized officer this 11th day of July, 1996, effective January 1, 1989
unless otherwise set forth herein.
LENOX, INCORPORATED
By : /s/ Milton B. Gillis
------------------------------------
MILTON B. GILLIS, Vice-President
2
<PAGE> 60
SECOND AMENDMENT
LENOX, INCORPORATED
EMPLOYEE SAVINGS AND INVESTMENT PLAN
The restated Lenox, Incorporated Employee Savings and Investment Plan
was adopted by Lenox, Incorporated effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended by adding the
following category as an excluded employee, effective August 30, 1996:
(d) any employee of the Hartmann Luggage Company
retail merchandising outlet, excepting those employees at the
plant location in Lebanon, Tennessee.
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Second Amendment to
the Lenox, Incorporated Employee Savings and Investment Plan to be executed by
its duly authorized officer this 13th day of March, 1997, effective as set forth
herein.
LENOX, INCORPORATED
By: /s/ Russell C. Buzby
---------------------------------
RUSSELL C. BUZBY,
Senior Vice President
1
<PAGE> 61
THIRD AMENDMENT
LENOX, INCORPORATED
EMPLOYEE SAVINGS AND INVESTMENT PLAN
The restated Lenox, Incorporated Employee Savings and Investment Plan
was adopted by Lenox, Incorporated effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended by revising the
following category of excluded employee, effective October 1, 1997:
(d) any employee of the Hartmann Luggage Company.
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Third Amendment to the
Lenox, Incorporated Employee Savings and Investment Plan to be executed by its
duly authorized officer this 8th day of September, 1997, effective as set forth
herein.
LENOX, INCORPORATED
By : /s/ Milton B. Gillis
------------------------------------
MILTON B. GILLIS, Vice-President
1
<PAGE> 62
CORRECTIVE AMENDMENT
LENOX, INCORPORATED
EMPLOYEE SAVINGS AND INVESTMENT PLAN
The restated Lenox, Incorporated Employee Savings and Investment Plan
was adopted by Lenox, Incorporated effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in connection with the definition of
a highly compensated employee in order to correct a scrivener's error and for
consistency with the prior plan document.
IT IS THEREFORE AGREED:
1. Section 1.12, Highly Compensated Employee, of Article I is
correctively amended effective January 1, 1989 to correct a scrivener's error
and for consistency with the prior plan document by deleting the first paragraph
of the section and replacing it as follows:
1.12 Highly Compensated Employee. A highly compensated
employee is determined in accordance with Code section 414(q)
and includes highly compensated active employees and former
employees. In making such determination, the determination
year is the Plan Year and the look-back year calculation is
made on the basis of the calendar year determination year.
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Corrective Amendment
to the Lenox, Incorporated Employee Savings and Investment Plan to be executed
by its duly authorized representative this 26th day of January, 1999, effective
as set forth herein.
LENOX, INCORPORATED
By: /s/ James D. Wilson
-------------------------------------
James D. Wilson, Officer
2
<PAGE> 63
FOURTH AMENDMENT
LENOX, INCORPORATED
EMPLOYEE SAVINGS AND INVESTMENT PLAN
The restated Lenox, Incorporated Employee Savings and Investment Plan
was adopted by Lenox, Incorporated effective January 1, 1989.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1, 1999,
Article IV, Time and Manner of Payment, is amended to increase the involuntary
cashout limit from $3,500 to $5,000. The $3,500 dollar limit is amended to read
$5,000 wherever that $3,500 dollar limit appears in Article IV of this Plan.
2. Sections 4.03 and 4.04 are correctively amended effective January 1,
1989, to reflect the options for distribution of the transferred ESOP Accounts
as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the
1
<PAGE> 64
Participant or the joint life expectancies of the Participant
and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind.
3. Effective April 1, 1999, Sections 4.03 and 4.04 are amended in their
entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods as
elected by the Participant:
(a) Single Payment. Payment may be made in
one lump-sum payment in cash in the year in which distribution
is to be made; provided, however, that payment from a
Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective April 1, 1999,
payment of all or any portion of a Participant's account
balance invested in the Brown-Forman Stock Fund may be made in
one lump-sum payment in cash or kind, with in kind
distribution in the form of Brown-Forman Corporation Class B
shares.
(b) Lifetime Payments. Payments may be made
in cash over a period not extending beyond the life expectancy
of the Participant or the joint life expectancies of the
Participant and the Participant's Beneficiary.
4.04 Payment Upon Death of Participant. If a
Participant dies before having received the entire vested
balance of that Participant's benefits, such remaining vested
balance, plus the proceeds of any insurance on the life of the
Participant held in the Participant's Accounts, shall be paid
to or for the benefit of the Participant's Beneficiary in a
lump sum payment in cash; provided, however, that payment from
a Participant's ESOP Account, if any, may be made in one
lump-sum payment in cash or in kind. Effective
2
<PAGE> 65
April 1, 1999, payment of all or any portion of a
Participant's account balance invested in the Brown-Forman
Stock Fund may be made in one lump-sum payment in cash or
kind, with in kind distribution in the form of Brown-Forman
Corporation Class B shares.
4. Effective April 1, 1999, Section 7.10, Participant Direction of
Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B
shares, as an additional investment option under the Plan. A
Participant may direct the investment of his/her account
balance into said Stock Fund under the terms and conditions as
agreed upon between the Trustee and the Plan Administrator.
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Fourth Amendment to
the Lenox, Incorporated Employee Savings and Investment Plan to be executed by
its duly authorized officer this 25th day of February, 1999, effective as set
forth herein.
LENOX, INCORPORATED
By: /s/ James D. Wilson
------------------------------
JAMES D. WILSON
OFFICER
3
<PAGE> 1
EXHIBIT 4(g)
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
PLAN NO.: 014
EIN: 21-0498476
<PAGE> 2
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
By action of the Board of Directors of Brown-Forman Corporation, a
Delaware corporation, the Dansk Profit Sharing and 401(k) Plan (Prior Plan) was
adopted by Lenox, Incorporated (Employer), effective July 3, 1991.
Effective July 1, 1992 (Effective Date), except as otherwise provided,
the Employer adopted the following plan, an amendment and restatement of the
Prior Plan, which shall hereafter be known as Lenox Retail Savings and
Investment Plan (Plan). The Plan is established to recognize and reward
employees for their contribution to the Employer's successful operation, and is
for the exclusive benefit of Participants and their Beneficiaries.
The Plan is intended to meet the requirements of Section 401(a) and
501(a), and to qualify as a Cash or Deferred Arrangement under Section 401(k),
of the Internal Revenue Code of 1986, as amended (Code).
<PAGE> 3
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS...........................................................................................1
1.01 Accounts........................................................................................1
1.02 Accounting Date.................................................................................1
1.03 Affiliated Employer.............................................................................2
1.04 Beneficiary.....................................................................................2
1.05 Break in Service................................................................................2
1.06 Code............................................................................................3
1.07 Compensation....................................................................................3
1.08 Elapsed Time....................................................................................4
1.09 Employee........................................................................................4
1.10 Employer........................................................................................5
1.11 Fiscal Year.....................................................................................5
1.12 Highly Compensated Employee.....................................................................5
1.13 Hour of Service.................................................................................6
1.14 Leased Employee.................................................................................8
1.15 Month of Service................................................................................8
1.16 Normal Retirement Age...........................................................................8
1.17 Period of Severance.............................................................................8
1.18 Plan Year.......................................................................................9
1.19 Spouse (Surviving Spouse).......................................................................9
1.20 Total and Permanent Disability..................................................................9
1.21 Year of Service.................................................................................9
ARTICLE II - PARTICIPATION.......................................................................................11
2.01 Eligibility....................................................................................11
2.02 Reemployment of Participant....................................................................11
2.03 Reemployment of Non-Participant................................................................11
2.04 Transferred Employees..........................................................................11
2.05 Employment Status Change.......................................................................11
2.06 Participation Following Normal Retirement Age..................................................12
ARTICLE III - VESTING ...........................................................................................13
3.01 Elective Account and Voluntary Account Fully Vested............................................13
3.02 Vesting of Other Accounts......................................................................13
3.03 Period of Service for Vesting Purposes.........................................................13
3.04 Vesting Schedule/Employer Matching Contribution Account........................................13
3.05 Vesting Schedule/CORE Account..................................................................13
3.06 Vesting Schedule/Profit Sharing Account........................................................14
3.07 Effect of Break in Service on Vesting..........................................................14
3.08 Date of Termination of Employment..............................................................15
3.09 Vesting and Nonforfeitability of Account Upon Plan Termination.................................15
3.10 Amendment of Vesting Schedule..................................................................15
ARTICLE IV - TIME AND MANNER OF PAYMENT..........................................................................17
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
4.01 Time of Initial Payment of Retirement Benefits.................................................17
4.02 Consent To Payment Of Benefits.................................................................17
4.03 Manner of Payment of Retirement Benefits.......................................................18
4.04 Election to Waive Joint and Survivor Annuity and Single Life Annuity...........................18
4.05 Payment Upon Death of Participant..............................................................19
4.06 Election to Waive Pre-Retirement Survivor Annuity..............................................20
4.07 Calculation of Distributions...................................................................21
4.08 Forfeiture of Non-vested Benefits..............................................................22
4.09 Fully Vested Account...........................................................................24
4.10 Suspension of Benefits.........................................................................24
4.11 Pre-1984 Election..............................................................................24
4.12 Pre-Retirement Distribution....................................................................24
4.13 Hardship Distribution..........................................................................24
4.14 Loans to Participant...........................................................................26
4.15 Limitation for Qualified Domestic Relations Order..............................................27
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER........................................................................28
5.01 Nonelective Contribution by Employer...........................................................28
5.02 Elective Contribution by Employer..............................................................28
5.03 Matching Contribution by Employer..............................................................28
5.04 Deduction of Employer Contributions............................................................28
5.05 Limits on Elective and Matching Contributions..................................................28
5.06 Special Employer Contributions.................................................................30
5.07 Correction of Excess Elective Contributions....................................................31
5.08 Correction of Excess Employer Matching Contributions and Voluntary
Contributions..................................................................................32
5.09 Return of Contribution. ......................................................................32
5.10 Plan and Trust Conditioned on Approval and Qualification.......................................33
5.11 Funding Policy.................................................................................33
ARTICLE VI - PARTICIPANT CONTRIBUTIONS...........................................................................34
6.01 Amount of Elective Contribution................................................................34
6.02 Election Request...............................................................................34
6.03 Change of Rate.................................................................................34
6.04 Distributions from Elective Account............................................................34
6.05 Voluntary Contributions........................................................................35
6.06 Withdrawal from Voluntary Contribution Account.................................................35
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS..............................................................36
7.01 Allocation of Nonelective Employer Contribution................................................36
7.02 Allocation of Elective Contributions...........................................................36
7.03 Allocation of Matching Contribution............................................................36
7.04 Allocation of Forfeitures......................................................................36
7.05 Amendment of Allocation Eligibility............................................................36
7.06 Maximum Additions to Participant's Account.....................................................37
7.07 Overall Limit..................................................................................39
7.08 Date of Allocation to Accounts.................................................................40
7.09 Expenses of Plan...............................................................................40
7.10 Participant Direction of Investment. .........................................................40
7.11 Periodic Adjustments to Account................................................................41
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE VIII - TOP HEAVY PROVISIONS..............................................................................43
8.01 When Provisions Effective......................................................................43
8.02 Determination of Top Heavy.....................................................................43
8.03 Top Heavy Vesting Schedule.....................................................................44
8.04 Compensation Limitation........................................................................44
8.05 Minimum Benefits...............................................................................44
8.06 Impact on Maximum Benefits.....................................................................44
8.07 Determination of Super Top Heavy...............................................................45
ARTICLE IX - PORTABILITY OF ACCOUNT..............................................................................46
9.01 Transfers to Another Qualified Plan............................................................46
9.02 Eligible Rollover Distributions................................................................46
9.03 Transfers to this Plan.........................................................................47
ARTICLE X - PARTICIPATING EMPLOYERS..............................................................................48
10.01 Adoption by Other Employers....................................................................48
10.02 Withdrawal from the Plan.......................................................................48
10.03 Action of a Single Employer....................................................................48
ARTICLE XI - PLAN ADMINISTRATOR..................................................................................49
11.01 Appointment of Plan Administrator..............................................................49
11.02 Duties of Plan Administrator...................................................................49
11.03 Decisions of Plan Administrator and Indemnification............................................50
11.04 Instructions to Trustee........................................................................50
11.05 Claims Procedure...............................................................................50
11.06 Delegating Responsibility......................................................................50
ARTICLE XII - MISCELLANEOUS......................................................................................52
12.01 Right to Terminate.............................................................................52
12.02 Plan Voluntary on Part of Employer.............................................................52
12.03 Benefits Not Subject to Creditors' Claim.......................................................52
12.04 Trust Agreement................................................................................52
12.05 Assets for Exclusive Benefits to Participants..................................................52
12.06 Nonguarantee of Employment.....................................................................53
12.07 Amendment......................................................................................53
12.08 Acts by Trustee................................................................................53
12.09 Laws of New Jersey. The ......................................................................53
12.10 Distribution to Minor or Incompetent Beneficiary...............................................53
12.11 Construction...................................................................................53
12.12 Merger or Consolidation........................................................................53
12.13 Discretionary Action...........................................................................54
12.14 Lost Beneficiaries; Escheat....................................................................54
12.15 Action by the Employer.........................................................................54
ARTICLE XIII - SIGNATURES........................................................................................55
</TABLE>
iii
<PAGE> 6
ARTICLE I - DEFINITIONS
As used in this Plan, the following terms have the following meanings
unless the context plainly requires a different meaning:
1.01 Accounts.
(a) Participant Elective Contribution Account. The separate
Account established and maintained on behalf of the Participant to which shall
be credited the Elective Contributions and the Special Employer Contributions
(if any), made by the Employer on behalf of the Participant, and the share of
the net gains or losses of the Trust attributable to such contributions. The
Elective Account shall be fully vested and nonforfeitable at all times.
(b) Employer Matching Contribution Account. The separate
Account established and maintained on behalf of a Participant to which shall be
credited the Participant's share of Employer Matching Contributions and the
share of the net gains or losses of the Trust attributable to such
contributions. The Employer Matching Contribution Account shall be subject to
the vesting provisions of Article III.
(c) Profit Sharing Account. The separate Account established
and maintained on behalf of a Participant to which shall be credited the
Participant's share of Employer Profit Sharing Contributions made pursuant to
the Prior Plan, and the share of the net gains or losses of the Trust
attributable to such contributions. The Profit Sharing Contribution Account
shall be subject to the vesting provisions of Article III.
(d) Voluntary Contribution Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the nondeductible Voluntary Contributions arising only from any
recharacterization of Elective Contributions pursuant to Section 5.07, and the
share of the net gains or losses of the Trust attributable to said Voluntary
Contributions. The Voluntary Contribution Account shall be fully vested and
nonforfeitable at all times.
(e) Company Retirement ("CORE") Account. The separate Account
established and maintained on behalf of a Participant to which shall be credited
the Nonelective Contributions provided under Section 5.01, and the share of the
net gains or losses of the Trust Fund attributable to such contributions. The
CORE Account shall be subject to the vesting provisions of Article III.
1.02 Accounting Date. Any date on which the Trustee calculates the
Participant's Account balance. Unless the Trustee performs the calculations more
frequently, the Accounting Date shall be December 31. Effective as soon as
administratively practicable after July 1, 1994, account valuations shall be
performed on a daily basis.
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<PAGE> 7
1.03 Affiliated Employer. The Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code section 414(b))
which includes the Employer; any trade or business, whether or not incorporated,
which is under common control (as defined in Code section 414(c)) with the
Employer; any organization, whether or not incorporated which is a member of an
affiliated service group (as defined in Code section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to regulations under 414(o).
1.04 Beneficiary. The person or entity designated by the Participant in
a written notice to the Plan Administrator to receive the Participant's death
benefits; provided, however, if no person or entity is named or the person
designated is not surviving when a benefit becomes payable, or if the person or
entity designated is not the Spouse and such designation does not conform to the
spousal consent requirements of Section 4.04, then the Beneficiary shall be the
person(s) in the first of the following classes surviving at the death of the
Participant: (i) widow or widower, or (ii) the Participant's estate.
A Beneficiary designation may be changed by submitting a new notice to
the Plan Administrator. Such a notice is not effective until the Plan
Administrator actually receives it.
1.05 Break in Service. For purposes of determining eligibility to
participate in the Plan, Break in Service means a twelve consecutive month
computation period during which an Employee does not complete more than five
hundred (500) Hours of Service.
For purposes of determining the vested percentage of an Employee's
account derived from Employer contributions, Break in Service means a Period of
Severance of at least twelve (12) consecutive months.
Solely for purposes of determining whether a Break in Service has
occurred in a computation period, an Employee who is absent from work for
maternity or paternity reasons receives credit for the Hours of Service which
would otherwise have been credited but for the absence. An absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the Employee, (2) by reason of the birth of a child of the Employee, (3) by
reason of the placement of a child with the Employee in connection with the
adoption of a child by the Employee, or (4) for purposes of caring for the child
for a period beginning immediately following the child's birth or placement. The
Hours of Service credited under this paragraph are credited (1) in the
computation period in which the absence begins if the crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, in the
following computation period. For purposes of eligibility, in any case in which
hours normally credited cannot be determined, the Employee receives credit for
eight (8) Hours of Service per day of absence, for a maximum of five hundred-one
(501) Hours of Service.
No credit is given pursuant to this Section unless the Employee timely
furnishes the Plan Administrator with information the Plan Administrator may
require to establish (1) that the absence
2
<PAGE> 8
from work is for reasons referred to in this Section, and (2) the number of days
for which there was an absence.
1.06 Code. The Internal Revenue Code of 1986, as amended.
1.07 Compensation. Compensation for any Employee shall mean total
earnings which are subject to withholding for federal income tax purposes, paid
to an Employee by the Employer during the Plan Year ending immediately prior to
the Fiscal Year to which the Employer contribution relates. Amounts contributed
by the Employer under the Plan and any nontaxable fringe benefits shall not be
considered Compensation.
Compensation shall include amounts contributed by the Employer under a
salary reduction agreement which are not includible in gross income under
Sections 125, 402(a)(8), 402(h), or 403(b) of the Code. However, Compensation
shall not include the following:
(a) moving expenses, the imputed value of life insurance, and
similar fringe benefits;
(b) long-term bonuses and special bonuses;
(c) payments made in lieu of Lenox, Incorporated Supplemental
Executive Retirement Plan and/or Lenox, Incorporated Supplemental
Retirement Income Plan benefits; and
(d) any payments under a nonqualified deferred compensation plan.
In the Employee's first year of participation, Compensation is
recognized as of the Employee's entry date into the Plan.
Compensation in excess of $200,000 is disregarded. Such amount shall be
adjusted for cost-of-living at the same time and in the same manner as permitted
under Code section 415(d). If the aggregate Compensation of the "Family Group"
exceeds $200,000, (as indexed), the Compensation considered under the Plan for
each Family Group member is proportionately reduced so the total equals $200,000
(as indexed) (except for purposes of determining the portion of Compensation up
to the integration level, if this Plan provides for permitted disparity).
"Family Group" includes a Participant who owns more than 5% interest in any
entity comprising the Employer or is one of ten Highly Compensated Employees
paid the greatest Compensation during the Plan Year, and the Participant's
Spouse or children under age 19 (who are Participants at the close of the period
used to compute Compensation). For Plan Years beginning before January 1, 1989,
the $200,000 limit (without regard to family aggregation) shall apply only for
Top Heavy Plan Years and shall not be adjusted.
3
<PAGE> 9
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provisions of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is $150,000, as
adjusted by the Commissioner for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in
this plan to the limitation under Section 401(a)(17) of the Code shall mean the
OBRA '93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the current plan year,
the compensation for that prior determination period is subject to the OBRA '93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
1.08 Elapsed Time. For vesting purposes (except for periods of service
which may be disregarded on account of the "rule of parity" described in Section
3.07) a Participant will receive credit for the aggregate of all time period(s)
commencing with the Participant's first day of employment or reemployment and
ending on the date a break in service begins. The first day of employment or
reemployment is the first day the Participant performs an hour of service. A
Participant will also receive credit for any Period of Severance of less than
twelve (12) consecutive months. Fractional periods of a year will be expressed
in terms of days.
Subject to Article II, for contribution purposes, a Participant is
entitled to have service taken into account from the date the Participant begins
to participate in the Plan, until the Participant is no longer an Employee.
Periods of Severance are not required to be taken into account under any
circumstances.
For purposes of this Section, hour of service shall mean each hour for
which a Participant is paid or entitled to payment for the performance of duties
for the Employer.
For purposes of this Section, a break in service is a Period of
Severance of at least twelve (12) consecutive months.
1.09 Employee. Nonbargained salaried and hourly employees of Dansk
International Designs, Ltd., from the Effective Date hereof through October 1,
1994; nonbargained salaried and hourly employees of Gorham, Inc. from the
Effective Date hereof through October 1, 1994; salaried
4
<PAGE> 10
and hourly employees of the Dansk and Gorham Retail Stores; salaried and hourly
employees of Lenox Merchandising Retail Stores effective July 1, 1992 or as soon
as administratively practicable thereafter; salaried and hourly employees of
Crouch and Fitzgerald effective July 1, 1992 or as soon as administratively
practicable thereafter, and employees of the Hagerstown (Williamsport)
warehouse. Employee shall include any Leased Employee. However, the term
Employee excludes the following:
(a) any employee required to be and included in a unit of
employees covered by a collective bargaining agreement between
employee representatives and the Employer, provided that (i)
retirement benefits were the subject of good faith bargaining between
the employee representatives and the Employer; and (ii) the collective
bargaining agreement does not expressly provide that the employee is
eligible for initial or continued participation in the Plan; and
(b) any person employed as an independent contractor.
1.10 Employer. Lenox, Incorporated or its successor(s) and any
Affiliated Employer which elects to become a party to the Plan, with the
approval of the Executive Committee of the Board of Directors of Brown-Forman
Corporation, by adopting the Plan for the benefit of its eligible Employees.
Notwithstanding any other provisions of this Section, any business
entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired by the Employer or its
Affiliated Employers that was not participant in the Prior Plan on July 3, 1991,
may adopt this Plan for its employees and become an adopting Employer only after
the Executive Committee of the Board of Directors of Brown-Forman Corporation
approves its participation and the conditions set out in Section 10.01 are met.
Until the requirements of the preceding sentence are satisfied, none of such
entity's employees are eligible to participate in this Plan.
1.11 Fiscal Year. May 1 to April 30, the tax and accounting year of the
Employer.
1.12 Highly Compensated Employee. A highly compensated employee is
determined in accordance with Code section 414(q) and includes highly
compensated active employees and former employees. In making such determination,
the "determination year" shall be the Plan Year, and the "look-back year" shall
be the immediately preceding 12-month period.
A Highly Compensated active employee includes any employee who performs
service for the Employer during the determination year and who, during the
look-back year: (i) received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to section 415(d) of the Code); (ii) received Compensation
from the Employer in excess of $50,000 (as adjusted pursuant to section 415(d)
of the Code) and was a member of the top-paid group for such year; or (iii) was
an officer of the Employer and received Compensation during such year that is
greater than
5
<PAGE> 11
50 percent of the dollar limitation in effect under section 415(b)(1)(A) of the
Code. The term highly compensated employee also includes: (i) employees who are
both described in the preceding sentence if the term "determination Year is
substituted for the term "look-back year" and the employee is one of the 100
employees who received the most compensation from the employer during the
determination year; and (ii) employees who are 5 percent owners at any time
during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of (iii) above
during either a determination year or look-back year, the highest paid officer
for such year shall be treated as a highly compensated employee.
A highly compensated former employee included any employee who
separated from service (or was deemed to have separated) prior to the
determination year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the employee's 55th
birthday.
If an employee is, during a determination year or look-back year, a
family member of either a 5 percent owner who is an active or former employee or
a highly compensated employee who is one of the 10 most highly compensated
employees who is ranked on the basis of Compensation paid by the Employer during
such year, then the family member and the 5 percent owner or top-ten highly
compensated employee shall be aggregated. In such case, the family member and 5
percent owner or top-ten highly compensated employee shall be treated as a
single employee receiving Compensation and plan contributions or benefits equal
to the sum of such Compensation and contributions or benefits of the family
member and 5 percent owner or top-ten highly compensated employee. For purposes
of this section, family member includes the spouse, lineal ascendants and
descendants of the employee or former employee and the spouses of such lineal
ascendants and descendants.
1.13 Hour of Service. Each hour: (i) for which an Employee is paid, or
entitled to payment, for the performance of duties for the Employer during the
applicable computation period; (ii) for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment relationship has
termi nated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty, or leave of absence authorized in
writing by the Employer; (iii) for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same Hour of
Service is credited no more than once to a single Employee, even though it may
fall within more than one of categories (i), (ii) and (iii) of the preceding
sentence.
Notwithstanding the above provisions, for eligibility purposes (i) no
more than five hundred one (501) Hours of Service will be credited to an
Employee for any single continuous period during which the Employee performs no
duties (whether or not such period occurs in a single computation period); (ii)
Hours of Service are not credited for hours for which an Employee is directly or
indirectly paid, or entitled to payment, for a period during which no duties are
performed if such
6
<PAGE> 12
payment is made or due under a plan maintained solely to comply with applicable
worker'scompensation, or unemployment compensation or disability insurance laws;
(iii) Hours of Service are not credited for a payment which solely reimburses an
Employee for medical or medically related expenses incurred by the Employee; and
(iv) Hours of Service are not credited to an Employee for payments made by this
Plan or any other pension or profit sharing plan maintained by the Employer.
To the extent they may be applicable to any Employee, the provisions of
the Department of Labor regulations section 2530.200b-2 are incorporated into
this Section by reference. Hours of Service are credited for employment with any
Affiliated Employer. If the Employer maintains the plan of a predecessor
employer, Hours of Service with the predecessor will count as service with this
Employer.
If the Employer maintains records which accurately reflect actual Hours
of Service credited to a particular Employee, the Hours of Service to be
credited to the Employee are determined from such records. Alternatively, if the
Employer has not maintained such records, the Employee is credited with
(i) ten (10) Hours of Service for each day for which the
Employee is required to be credited with at least one
(1) Hour of Service under this Section;
(ii) forty-five (45) Hours of Service for each week for
which the Employee is required to be credited with at
least one (1) Hour of Service under this Section; or
(iii) hours Worked, as defined in Labor Regulation Section
2530.200b-3(d)(3)(i) in which 870 Hours Worked are
equivalent to 1,000 Hours of Service, and 435 Hours
Worked are equivalent to 500 Hours of Service; or
(iv) hours of Service determined on the basis of periods
of employment which are the payroll periods
applicable to the Employee. An Employee is credited
with Hours of Service, determined in accordance with
the following table, for each payroll period in which
the Employee actually has at least one (1) Hour of
Service:
<TABLE>
<CAPTION>
PAYROLL PERIOD HOURS OF SERVICE CREDITED
-------------- -------------------------
<S> <C>
weekly 45
semi-monthly 95
monthly 190
</TABLE>
An Employee on leave of absence for service on active duty in the Armed
Forces of the United States shall receive upon return to the service of the
Employer, in addition to credit for Hours
7
<PAGE> 13
of Service to which the Employee is entitled under this Section, such other
credit as may be prescribed by Federal laws relating to military and veterans'
reemployment rights.
For purposes of this Section, any reference to "Employer" shall be
deemed to include not only the Employer defined in Section 1.10, but also any
Affiliated Employer (as defined in Section 1.03) of which group the Employer is
a member.
1.14 Leased Employee. Any person (other than an employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with section
414(n)(6) of the Code) on a substantially full time basis for a period of at
least one year, and such services are of a type historically performed by
employees in the business field of the recipient employer. Contributions or
benefits provided a leased employee by the leasing organization which are
attributable to services performed for the recipient employer shall be treated
as provided by the recipient.
A leased employee shall not be considered an employee of the recipient
if: (i) such employee is covered by a money purchase pension plan providing: (1)
a non-integrated employer contribution rate of at least 10 percent of
compensation, as defined in section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable from
the employee's gross income under section 125, 402(a)(8), 402(h) or 403(b) of
the Code. (2) immediate participation, and (3) full and immediate vesting; and
(ii) leased employees do not constitute more than 20 percent of the recipient's
non-highly compensated workforce.
1.15 Month of Service. For vesting and contribution purposes, a
calendar month during any part of which an Employee completes an Hour of
Service. However, an Employee is credited with a Month of Service for each month
during the twelve-month computation period in which the Employee does not incur
a Period of Severance.
1.16 Normal Retirement Age. A Participant's 65th birthday.
1.17 Period of Severance. For vesting purposes, a continuous period of
time during which the individual is not employed by the Employer. Such period
begins on the "Severance from Service Date", which is the date the individual
retires, quits, or is discharged, or if earlier, the twelve (12) month
anniversary of the date on which the individual was otherwise first absent from
work for any reason other than quit, retirement, discharge, or death, such as
vacation, holiday, sickness, disability, authorized leave of absence, or layoff.
The Period of Severance ends on the date the individual again performs an Hour
of Service for the Employer. A Period of Severance of less than 12 consecutive
months shall not be taken into account.
In the case of an individual who is absent from work for maternity or
paternity reasons, the twelve (12) consecutive month period beginning on the
first anniversary of the first date of the absence does not constitute a Period
of Severance. For such individual, the Period of Severance
8
<PAGE> 14
begins on the second (2nd) twelve (12) month anniversary of the first day the
individual was absent from work. The period between the first and second (2nd)
anniversaries of the first (1st) day of absence from work is neither a period of
service nor a Period of Severance. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an absence (1) by reason of
the pregnancy of the individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the individual in
connection with the adoption of a child by the individual, or (4) for purposes
of caring for a child for a period beginning immediately following the child's
birth or placement.
1.18 Plan Year. January 1 to December 31, the accounting year of the
Plan.
1.19 Spouse (Surviving Spouse). The spouse or surviving spouse of the
Participant on the date of determination, provided that a former spouse is
treated as the Spouse or Surviving Spouse to the extent provided under a
Qualified Domestic Relations Order.
1.20 Total and Permanent Disability. The inability of a Participant to
continue to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which is expected to result
in death or be of long continued or indefinite duration. The permanence and
degree of the impairment shall be supported by medical evidence satisfactory to
the Plan Administrator.
Total and Permanent Disability excludes any disability which:
(a) is contracted, suffered, or incurred while the Participant
is engaged in a criminal enterprise;
(b) results from an intentional self-inflicted injury; or
(c) occurs while in service in the Armed Forces and which
prevents the Participant from returning to employment with the
Employer, and for which the Participant receives a military pension.
1.21 Year of Service. For purposes of determining eligibility to
participate, a Year of Service is a 12 consecutive month period (computation
period) during which an Employee completes at least 1000 Hours of Service. To
determine Years of Service and Breaks in Service the computation period shall
begin on the date the Employee first performs an Hour of Service for the
Employer (employment commencement date) and anniversaries thereof.
For purposes of determining vesting and contributions, a Year of
Service is equal to twelve (12) Months of Service, beginning on the date the
Employee first performs an Hour of Service, whether or not the Months of Service
are completed consecutively. To determine the number of whole years of an
individual's period of service, nonsuccessive periods of service are aggregated
and less than whole year periods of service (whether or not consecutive) are
aggregated on the basis that
9
<PAGE> 15
twelve (12) Months of Service (thirty days are deemed to be a month in the case
of the aggregation of fractional months) or three hundred sixty-five (365) days
of service equal a whole Year of Service. For purposes of vesting, after
calculating the Participant's period of service as provided in this section, the
Plan may disregard any remaining less than whole year, twelve (12) month, or
three hundred sixty-five (365) day period of service. An Employee will receive
credit for the aggregate of all Years of Service commencing with the Employee's
first day of employment and ending on the date a Break in Service begins.
Service with Dansk International Designs, Ltd. and Gorham, Inc. during
the time a qualified plan was maintained is recognized.
10
<PAGE> 16
ARTICLE II - PARTICIPATION
2.01 Eligibility. Upon filing an application with the Employer, an
Employee becomes a Participant as of the first day of the month coinciding with
or next following the date the Employee completes a Year of Service with the
Employer.
Participants in the Prior Plan (as of the Effective Date of this Plan)
are not excluded from this Plan because of the requirements of this Section.
2.02 Reemployment of Participant. A Participant who terminates
employment with the Employer and who is subsequently reemployed by the Employer
resumes participation under the Plan immediately upon reemployment.
2.03 Reemployment of Non-Participant. If an Employee who is not a
Participant has a Break in Service before satisfying the Plan's eligibility
requirements, the Employee receives no credit for pre-break service and must
satisfy current Plan eligibility requirements.
If an Employee terminates employment after meeting the Plan's
requirement for eligibility but before becoming a Participant, and does not
incur a Break in Service, the Employee shall commence participation under the
Plan immediately upon reemployment.
2.04 Transferred Employees. An Employee transferred to the Employer who
becomes a Participant in this Plan is credited with service for eligibility and
vesting purposes for the Participant's Years of Service with the Employer and
nonparticipating Affiliated Employers. Such Employee is credited with service
for contribution purposes only for Years of Service with the Employer. A
transferred Employee is permitted to make Elective Contributions to this Plan
only while participating in accordance with Section 2.01. This section, however,
is subject to and limited by the provisions of Sections 1.10 and 10.01.
2.05 Employment Status Change. A Participant who is no longer a member
of an eligible class of Employees but is still employed by the Employer is not
eligible for contributions under the Plan, but for all other purposes is treated
as a Participant during any such periods of employment. The employee's interest
in the Plan continues to vest for each Year of Service completed while an
employee, until the account is forfeited or distributed pursuant to the terms of
the Plan. Additionally, the employee's account balance in the Plan continues to
share in the earnings or losses of the Trust.
Such employee will participate immediately upon returning to the class
of Employees.
Should an employee who was not a member of the eligible class of
Employees become an Employee, the employee becomes a Participant immediately if
the employee satisfies the eligibility requirements of the Plan and would
otherwise have become a Participant.
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<PAGE> 17
2.06 Participation Following Normal Retirement Age. A Participant who
continues to be employed beyond Normal Retirement Age continues to be a
Participant under the Plan.
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<PAGE> 18
ARTICLE III - VESTING
3.01 Elective Account and Voluntary Account Fully Vested. A
Participant's Elective Contribution Account and Voluntary Contribution Account
are fully vested at all times.
3.02 Vesting of Other Accounts. A Participant's Employer Matching
Contribution Account, CORE Account, and Profit Sharing Account are fully vested
upon the first of the following events to occur:
(a) The Participant's attaining Normal Retirement Age.
(b) The Participant's Total and Permanent Disability;
(c) The Participant's death.
3.03 Period of Service for Vesting Purposes. Effective for the 1992
Plan Year, service for vesting purposes is taken into account on the basis of
Elapsed Time. The determination of service for vesting purposes for those
employees with respect to whom the method of crediting service changes will be
made pursuant to I.R.C. ss. 1.410(a)-7(f) and (g).
For purposes of crediting vesting service, whether service with a
business entity (including but not limited to new entrepreneurial ventures, new
divisions, or Affiliated Employers) created or acquired by the Employer or its
Affiliated Employers that was not a participant in the Prior Plan on July 3,
1991, shall be deemed to be service with the Employer will be determined by the
Executive Committee of the Board of Directors of Brown-Forman Corporation.
3.04 Vesting Schedule/Employer Matching Contribution Account. The
vested portion of a Participant's Employer Matching Contribution Account prior
to the occurrence of an event stated in Section 3.02 is a percentage of such
Account determined on the basis of Years of Service according to the following
schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 1 year 0%
1 year but less than 2 25%
2 years but less than 3 50%
3 years but less than 4 75%
4 years or more 100%
</TABLE>
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<PAGE> 19
3.05 Vesting Schedule/CORE Account. The vested portion of a
Participant's CORE Account prior to the occurrence of an event stated in Section
3.02 is a percentage of such Account determined on the basis of Years of Service
according to the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 5 years 0%
5 years or more 100%
</TABLE>
3.06 Vesting Schedule/Profit Sharing Account. The vested portion of a
Participant's Profit Sharing Account prior to the occurrence of an event stated
in Section 3.02 is a percentage of such Account determined on the basis of Years
of Service according to the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 3 years 0%
3 years but less than 4 20%
4 years but less than 5 40%
5 years or more 100%
</TABLE>
3.07 Effect of Break in Service on Vesting.
(a) Reemployment Before Five Consecutive Breaks in Service. If
a terminated Participant is reemployed by the Employer before incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), both pre-break and post-break Years of Service will count in
vesting the Participant's Account balance.
(b) Reemployment of Vested Participant After Five Consecutive
Breaks in Service. If a Participant terminates employment with any
vested benefit and is reemployed after incurring five consecutive
Breaks in Service (only a single Break in Service applies, if completed
prior to the first day of the first Plan Year in 1985), all post-break
service will be disregarded in determining the vested percentage of
such Participant's Account which accrued prior to the break. However,
all Years of Service (both pre-break and post-break) will count for
purposes of vesting the Participant's Account which accrues after the
break.
(c) Reemployment of Non-Vested Participant After Five
Consecutive Breaks in Service. If a Participant terminates employment
with no vested benefit whatsoever and is reemployed after incurring
five consecutive Breaks in Service (only a single Break in Service
applies, if completed prior to the first day of the first Plan Year in
1985), all service after the break is disregarded in determining the
vested percentage of the Participant's Account that
14
<PAGE> 20
accrued prior to the break. Further, such Participant's pre-break
service counts for purposes of determining the vested percentage of the
Participant's Account which accrues after the break only if upon
reemployment the number of consecutive Breaks in Service is less than
the aggregate number of pre-break Years of Service.
For purposes of this subsection (c), in computing a
Participant's aggregate Years of Service completed prior to any Break
in Service, Years of Service which were disregarded by reason of any
prior Break in Service shall likewise be disregarded.
Service earned prior to the first day of the first Plan Year
in 1985 is disregarded if the minimum participation and minimum vesting
rules then in effect did not require service to be taken into account.
(d) Separate Accounts. If necessary, separate Accounts will be
maintained for amounts derived from Employer contributions made before
and after a Break in Service. Both Accounts will be adjusted by
earnings and losses of the Trust.
3.08 Date of Termination of Employment. The date a Participant
terminates employment other than by attaining Normal Retirement Age, Total and
Permanent Disability or death shall be the actual date of termination; provided,
however, if a Participant fails to resume employment with the Employer within
the terms of an authorized leave of absence, that Participant shall be deemed to
have terminated employment as of the date that Participant's authorized leave of
absence commenced.
3.09 Vesting and Nonforfeitability of Account Upon Plan Termination.
Upon termination, partial termination or complete discontinuance of Employer
contributions under the Plan, the rights of all affected Participants to
benefits accrued to the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the amounts credited to
the Participants' Accounts, are nonforfeitable. The Plan Administrator shall
compute and direct the Trustee to segregate such Accounts and the Accounts of
any other persons having an interest in the Trust.
3.10 Amendment of Vesting Schedule. No amendment to the Plan shall be
effective to the extent that, in the case of an Employee who is a Participant on
the later of the effective date or the adoption date of such amendment, it has
the effect of reducing such Participant's vested accrued benefit as calculated
without regard to the amendment. If the Plan's vesting schedule is amended or
the Plan is amended in any way that directly or indirectly affects the
computation of a Participant's vested percentage, or if the Plan is deemed
amended by an automatic change to or from a Top Heavy vesting schedule, each
Participant with at least 3 Years of Service as of the end of the election
period may elect to have such Participant's vested percentage computed under the
Plan without regard to such amendment or change. However, for Plan Years
beginning before January 1, 1989, or with respect to Employees who do not
complete one Hour of Service in a Plan Year beginning after December 31, 1988,
"5 years" shall be substituted for "3 years" in the preceding sentence.
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<PAGE> 21
The election period shall commence with the date the amendment is
adopted or deemed to be made and shall end on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant receives written notice
of the amendment from the Employer or Plan
Administrator.
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<PAGE> 22
ARTICLE IV - TIME AND MANNER OF PAYMENT
4.01 Time of Initial Payment of Retirement Benefits.
(a) In the event of termination of employment for any
reason, and upon Participant's filing of the necessary forms,
documentation, and application for benefits, initial payment of
Participant's benefits will begin as soon as administratively
feasible;
However, unless the Participant elects in writing a later
commencement date, the pay ment of benefits shall begin not later than
the sixtieth (60th) day after the close of the Plan Year in which the
latest of the following occurs: (1) the Participant reaches age
sixty-five (65) or Normal Retirement Age, (2) the tenth (10th)
anniversary of commencing participation in the Plan, or (3)
termination of employment with the Employer.
(b) Under no circumstances will distribution of benefits
begin later than April 1 of the calendar year following the year in
which the Participant attains age 70-1/2 (the "required beginning
date").
4.02 Consent To Payment Of Benefits. Notwithstanding Section 4.01,
if the value of the Participant's vested benefit derived from Employer and
Employee contributions has ever exceeded $3,500, and the benefit is immediately
distributable, the Participant and the Participant's Spouse (or, where either
has died, the survivor) must consent to the distribution of benefits. The
consent must be obtained in writing within the 90 day period ending on the
Annuity Starting Date (the first day of the first period for which an amount is
payable as an annuity or any other form).
Spousal consent shall not be required if distribution is in the form
of a Qualified Joint and Survivor Annuity. Further, no consent shall be
required if a distribution is required to satisfy Code section 401(a)(9) or
415. In addition, upon termination of the Plan if the Plan does not offer the
option of a commercial annuity, the Participant's account balance may, without
the Participant's consent, be distributed to the Participant or transferred to
another defined contribution plan (other than an employee stock ownership plan
under Code section 4975(e)(7)) within the same controlled group.
An account balance is immediately distributable if any part of it
could be distributed to the Participant (or Surviving Spouse) before the
Participant attains (or would have attained) the later of Normal Retirement Age
or age 62. Absent the required consent to receive benefits in excess of $3,500,
distribution of benefits shall begin no sooner than the later of age 62 or
Normal Retirement Age.
If the value of the Participant's vested benefit derived from Employer
and Employee contributions has never exceeded $3,500, the Plan Administrator
shall distribute the value of the entire vested portion of such account balance
in accordance with Section 4.01 without the need for
17
<PAGE> 23
consent of the Participant or Spouse. For purposes of this Section, if the
value of a Participant's vested account balance is zero, the Participant shall
be deemed to have received a distribution of such vested account balance.
4.03 Manner of Payment of Retirement Benefits. Distribution of a
Participant's benefits will be made to the Participant or Beneficiary by one of
the following methods:
(a) Automatic Form of Payment of Retirement Benefits.
Unless the Participant elects otherwise as provided below,
distribution of a Participant's benefits will be made to the
Participant by one of the following methods, as applicable:
(i) Joint and Survivor Annuity. A Participant
who is married on the Annuity Starting Date shall receive the
value of the benefits in the form of a Joint and Survivor
Annuity. The Joint and Survivor Annuity shall be the
actuarial equivalent of a single life annuity. Such Joint and
Survivor benefits following the Participant's death shall
continue to the Spouse during the Spouse's lifetime at a rate
equal to fifty percent (50%) of the rate at which such
benefits were payable to the Participant.
(ii) Single Life Annuity. A Participant who is
not married on the Annuity Starting Date shall receive
benefits in the form of a Single Life Annuity.
(b) Optional Form of Payment of Retirement Benefits. If
a Participant duly elects pursuant to Section 4.04 to waive the Joint
and Survivor Annuity or Single Life Annuity, as applicable,
distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods, as elected
by the Participant:
(i) By lump-sum payment in cash.
(ii) Payments may be made over a period not
extending beyond the life expectancy of the Participant or
the joint life expectancies of the Participant and the
Participant's Beneficiary.
4.04 Election to Waive Joint and Survivor Annuity and Single Life
Annuity.
(a) Election and Spousal Consent. An election to waive
the Joint and Survivor Annuity must be made by the Participant in
writing during the Election Period and be consented to by the
Participant's Spouse. Such election shall designate a Beneficiary or a
form of benefits that may not be changed without spousal consent
(unless the original consent acknowledged the Spouse's right to limit
consent to a specific Beneficiary or form of benefits and the Spouse
voluntarily chose to relinquish one or both of such rights). Such
Spouse's consent shall be irrevocable and must acknowledge the effect
of such election and be witnessed by a Plan representative or a notary
public. Such consent shall not be required if it is established to the
satisfaction of the Plan Administrator that the required consent
18
<PAGE> 24
cannot be obtained because there is no Spouse, or the Spouse cannot be
located, or other circumstances that may be prescribed by Regulations.
The election made by the Participant and consented to by the Spouse
may be revoked by the Participant in writing without the consent of
the Spouse at any time during the Election Period. The number of
revocations shall not be limited. Any new election must comply with
the requirements of this Section. A former Spouse's waiver shall not
be binding on a new Spouse.
(b) Election Period. For purposes of this Section, the
Election Period to waive the Joint and Survivor Annuity shall be the
ninety (90) day period ending on the Annuity Starting Date.
(c) Notice Period. With regard to the election, the Plan
Administrator shall provide the Participant a written explanation no
less than 30 and no more than 90 days before the Annuity Starting Date
containing:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and Survivor Annuity,
and
(iii) the rights of the Participant's Spouse, and
(iv) the right of the Participant to revoke such
election and the effect of such revocation.
(v) the relative values of the various optional
forms of benefits under the Plan.
(d) Election to Waive Single Life Annuity. An unmarried
Participant may elect to waive the Single Life Annuity form of payment
by complying with the provisions of this Section as if electing to
waive the Joint and Survivor Annuity, but without the spousal consent
requirements.
4.05 Payment Upon Death of Participant. Other than an annuity
payable pursuant to Section 4.03, if a Participant dies before having received
the entire vested balance of that Participant's benefits and has a Surviving
Spouse, such remaining vested balance, plus the proceeds of any insurance on
the life of the Participant held in the Participant's Accounts shall be paid to
or for the benefit of the Participant's Spouse in the form of a Pre-Retirement
Survivor Annuity, unless the Participant has elected to waive the annuity
pursuant to Section 4.06. Payment of such annuity shall commence within a
reasonable time after the Participant's death unless the Spouse elects a later
commencement date. However, payment must commence on or before the later of (i)
the last day of the calendar year following the year of the Participant's
death, or (ii) the last day of the year in which the Participant would have
attained age 70-1/2.
19
<PAGE> 25
If a Participant's death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, the Participant's death benefits shall be paid
to the Beneficiary in a lump sum payment in cash.
4.06 Election to Waive Pre-Retirement Survivor Annuity. Any
election to waive the Pre- Retirement Survivor Annuity before the Participant's
death must be made by the Participant in writing during the Election Period and
shall require the Spouse's irrevocable consent in the same manner provided for
in Section 4.04. Further, the Spouse's consent must acknowledge the specific
nonspouse Beneficiary or the alternative form of death benefit to be paid in
lieu of the Pre-Retirement Survivor Annuity (unless the consent of the Spouse
acknowledges that the Spouse has the right to limit consent only to a specific
Beneficiary or a specific form of benefit and that the Spouse voluntarily
elects to relinquish one or both of such rights.)
(a) The Election Period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in
which the Participant attains age thirty-five (35) and end on the date
of the Participant's death. In the event a vested Participant
separates from service prior to the beginning of the Election Period,
the Election Period shall begin on the date of such separation from
service.
Pre-age 35 waiver: A Participant who will not yet attain age 35 as of
the end of any current Plan Year may make a special qualified election
to waive the Pre-Retirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall
not be valid unless the Participant receives a written explanation of
the Pre-Retirement Survivor Annuity in such terms as are described
below. Pre-Retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the
participant attains age 35. Any new waiver on or after such date shall
be subject to the full requirements of this Section.
(b) With regard to the election, the Plan Administrator
shall provide each Participant within the "applicable period", with
respect to such Participant (and consistent with regulations), a
written explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to Section 4.04. The
term "applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(i) The period beginning with the first day of
the Plan Year in which the Participant attains age thirty-two
(32) and ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age thirty-five
(35);
(ii) A reasonable period ending after the
individual becomes a Participant. For this purpose, in the
case of an individual who becomes a Participant after age
thirty-two (32), the explanation must be provided by the end
of the three-year period beginning with the first day of the
first Plan Year for which the individual is a Participant;
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<PAGE> 26
(iii) A reasonable period ending after the Plan
no longer fully subsidizes the Pre-Retirement Survivor
Annuity with respect to the Participant;
(iv) A reasonable period ending after Code
section 401(a)(11) applies to the Participant; or
(v) A reasonable period after separation from
service in the case of a Participant who separates before
attaining age thirty-five (35). For this purpose, the Plan
Administrator must provide the explanation at the time of
separation or within one year after separation.
4.07 Calculation of Distributions.
(a) Minimum Amounts to be Distributed. Notwithstanding
any provisions to the contrary, all distributions required under this
Article IV shall comply with Code section 401(a)(9) and the proposed
regulations thereunder, including the minimum distribution incidental
benefit requirement of regulation 1.401(a)(9)-2.
(b) Determination Of Amount To Be Distributed Each Year. If
the Participant's interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after
the required beginning date:
(i) If a Participant's benefit is to be
distributed over (1) a period not extending beyond the
life expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the
Participant's designated Beneficiary or (2) a period not
extending beyond the life expectancy of the designated
Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first
distribution calendar year, must at least equal the quotient
obtained by dividing the Participant's benefit by the
applicable life expectancy.
(ii) For calendar years beginning before January
1, 1989, if the Participant's Spouse is not the designated
Beneficiary, the method of distribution selected must assure
that at least 50% of the present value of the amount
available for distribution is paid within the life expectancy
of the Participant.
(iii) For calendar years beginning after December
31, 1988, the amount to be distributed each year shall not be
less than the quotient obtained by dividing the Participant's
benefit by the lesser of (1) the applicable life expectancy
or (2) if the Participant's Spouse is not the designated
Beneficiary, the applicable divisor determined from the table
set forth in Q&A-4 of section 1.401(a)(9)-2 of the proposed
regulations. Distributions after the death of the Participant
shall be distributed using the applicable life expectancy in
subsection (i) above as the relevant divisor without regard
to proposed regulations section 1.401(a)(9)-2.
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<PAGE> 27
(iv) The minimum distribution required for the
Participant's first distribution calendar year must be made
on or before the Participant's required beginning date. The
minimum distribution for other calendar years, including the
minimum distribution for the distribution calendar year in
which the employee's required beginning date occurs, must be
made on or before December 31 of that distribution calendar
year.
(v) If the participant's benefit is distributed
in the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in accordance
with the requirements of section 401(a)(9) of the Code and
the proposed regulations thereunder.
(c) Calculation of Life Expectancy. A determination of
life expectancy and joint and last survivor life expectancy will be
made by use of the expected return multiples in Section 1.72-9 of the
regulations under the Code. Unless otherwise elected by the
Participant or Spouse by the time distributions are required to begin,
life expectancies will be recalculated annually. Such election shall
be irrevocable. The life expectancy of a non-Spouse Beneficiary may
not be recalculated.
4.08 Forfeiture of Non-vested Benefits.
(a) Forfeiture Upon Five Year Break in Service. Upon
termination of a Participant whose benefits are at least partially
vested, the non-vested portion of such benefits shall be transferred
to an account holding potential forfeitures. This account shall
continue to be adjusted by earnings and losses of the Trust; provided,
however, in the case of any Participant who has incurred five (5) or
more consecutive Breaks in Service (Five Year Break in Service) prior
to the resumption of employment with the Employer, the non-vested
portion of such terminated Participant's benefits, and all regular
periodic adjustments thereto, shall be deemed forfeited and shall be
used to reduce the Employer's contribution for the Plan Year within
which the fifth Break in Service occurs. Upon such forfeiture, such
terminated Partici pant's Account shall be closed and if the vested
Account balance has not been paid to the Participant, the vested
portion of such Account shall be transferred to a separate Fully
Vested Account for such terminated Participant's benefit; provided,
however, at such time as the terminated Participant resumes employment
with the Employer, an additional separate Account shall be established
for the Participant's benefit as if the Participant were a new
Participant, which Account shall be maintained separate and distinct
from the Participant's Fully Vested Account, until such Account
becomes fully vested at which time the Accounts may be merged.
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<PAGE> 28
(b) Forfeiture Prior to Five Year Break in Service. Upon
termination of employment of a non-vested Participant, or upon
distribution of the vested portion of a terminated Participant's
benefits before the Accounting Date of the second Plan Year following
termination of employment, the non-vested portion of such terminated
Participant's benefits shall be deemed forfeited and shall be
allocated as of the Accounting Date of the Plan Year of termination of
a non-vested Participant, or the Plan Year in which distribution to a
vested Participant is made, in accordance with subsection (a) as
though a Five Year Break in Service had occurred. If less than the
entire vested portion of the account balance derived from Employer
contributions is distributed, the part of the nonvested portion that
will be treated as a forfeiture is the total nonvested portion
multiplied by a fraction, the numerator of which is the amount of the
distribution attributable to Employer contributions and the
denominator of which is the total value of the vested Employer derived
account balance.
(c) Restoration of Accounts.
(i) Partially Vested Participant. If a
terminated Participant, who has received a distribution of
the entire vested portion of such Participant's benefits is
reemployed by the Employer prior to a Five Year Break in
Service, and repays to the Plan (in cash and/or kind, as
initially distributed) an amount equal to the full amount of
such distribution (repayment), then that portion of such
terminated Participant's benefits which was forfeited at the
time of distribution shall be reinstated by the Employer (in
cash and/or kind as initially forfeited) and added to such
repayment to constitute the opening balance of such
Participant's Account upon the Participant's reemployment;
provided, however, reinstatement of such Participant's
forfeiture shall occur only where repayment by the
Participant is completed by the earlier of: (1) the last day
of the Plan Year within which the Participant has five
consecutive Breaks in Service or (2) five years after the
Participant is reemployed by the Employer. If a terminated
Participant incurs five consecutive Breaks in Service,
repayment will not be permitted.
(ii) Non-Vested Participant. If a terminated
Participant who had no vested interest in his benefits is
reemployed by the Employer before the Participant's
consecutive Breaks in Service equal or exceed the greater of
(1) five, or (2) the aggregate number of pre-break Years of
Service, that terminated Participant's benefits, if
previously forfeited shall be reinstated (in cash or in kind
as initially forfeited) to constitute the opening balance of
such Participant's Account.
(d) Source of Restoration. Restoration pursuant to
subsection (c) of this Section shall be made from the following
sources in the order described:
(1) From the forfeiture of such terminated
Participant's Account which has not yet been applied pursuant
to subsection (a) above (the account of potential
forfeitures); or if insufficient,
23
<PAGE> 29
(2) From forfeitures applicable as of the
Accounting Date of the Plan Year within which repayment is
completed; or if insufficient,
(3) From the Employer contributions for the
Plan Year within which such repayment is completed; and if
necessary, for the Plan Year next following.
(e) Make-Up Contribution and Time of Restoration.
Restoration of a forfeiture pursuant to this subsection (e) shall in
all events be completed by the Accounting Date of the Plan Year next
following the Plan Year within which the repayment is completed.
4.09 Fully Vested Account. The Fully Vested Account is the account
established for the benefit of a Participant to hold the vested portion of a
Participant's benefits upon forfeiture of the non-vested portion of the
Participant's benefits. Where a Fully Vested Account is not distributed
coincident with the application of the Participant's forfeiture, it shall
continue to be adjusted by earnings and losses of the Trust; provided, however,
it shall no longer be increased by contributions or forfeitures. A Fully Vested
Account shall be subject to the time and manner of payment provisions of
Article IV of the Plan.
4.10 Suspension of Benefits. Payment of benefits attributable to
Employer contributions may be suspended for any period during which a
terminated Participant is reemployed by the Employer.
4.11 Pre-1984 Election. The preceding Sections of this Article IV
notwithstanding, if the Participant has, before January 1, 1984, made an
election to receive benefits in a form acceptable under Code section 401(a) as
in effect prior to the enactment of the Tax Equity and Fiscal Responsibility
Act of 1982, and if the Participant filed such election in a timely manner with
the Plan Administrator, said election shall be effective unless and until
revoked by the Participant. If an election is revoked any subsequent
distributions must meet the requirements of this Article IV.
4.12 Pre-Retirement Distribution. A Participant who has been a
Participant for at least two years and who attains age 59 1/2 may elect to
receive a distribution of the entire amount credited to such Participant's
Accounts, or a portion thereof, excluding amounts from the CORE Account. A
Participant who receives such a distribution shall continue to participate in
the Plan. Any such distribution shall be made in a manner consistent with the
requirements of this Article IV, including all notice and consent requirements.
Any Participant who withdraws elective contributions shall not be permitted to
make elective contributions until six (6) months have elapsed from the date on
which such withdrawal occurs.
4.13 Hardship Distribution.
(a) The Plan Administrator, at the election of the
Participant, shall permit a distribution from the Participant's
Account(s) (except for the CORE Account, any Special Employer
Contributions, and earnings credited to the Participant's Elective
Account after
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<PAGE> 30
December 31, 1988) of an amount necessary to satisfy the Participant's
immediate and heavy financial need where the Participant lacks other
available resources on account of:
(i) accident or illness involving the
Participant or a member of the Participant's immediate family
or household or other dependant,
(ii) tuition and related educational fees for
the next twelve (12) months for post-secondary education of a
member of the Participant's immediate family or other
dependent,
(iii) the cost of buying the principal residence
of the Participant, not including making mortgage payments,
(iv) the cost of preventing an eviction or
mortgage foreclosure on the Participant's principal
residence, or
(v) another circumstance which the Plan
Administrator determines constitutes an immediate and heavy
financial need.
No hardship distribution shall exceed the vested portion of a
Participant's applicable Account determined as of the most recent Accounting
Date. Such a distribution is deemed made as of the first day of the Plan Year,
or if later, the most recent Accounting Date, and the Participant's Account(s)
shall be reduced accordingly. Any distribution shall be made in a manner
consistent with the requirements of this Article IV, including all notice and
consent requirements.
(b) Rules for Hardship Distributions. Distributions
shall be carried out under the following rules:
(i) The Participant shall apply for the
distribution under procedures fixed by the Plan
Administrator.
(ii) The application shall include a signed
statement of the facts causing financial hardship and any
other facts required by the Plan Administrator.
(iii) The distribution shall not exceed the
amount of the financial need.
(iv) The Participant shall obtain all
distributions and nontaxable loans available under all plans
of the Employer.
(v) The Participant's Elective Contributions
under all plans of the Employer for the year immediately
following the year of the hardship distribution shall not
exceed $7,979 (adjusted pursuant to the method provided in
Code section
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<PAGE> 31
415(d)) less the amount of the Participant's Elective
Contributions for the year of the hardship distribution.
4.14 Loans to Participant.
(a) The Trustee may, if the Plan Administrator directs, lend
amounts in accordance with this Section and the Trust Agreement, provided,
however, that Participant loans are not permitted from the Participant's CORE
Account.
Loans may be made to Participants and Beneficiaries under the
following circumstances: (1) loans are made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans are not made
available to Highly Compensated Employees in an amount greater than the amount
made available to other employees; (3) loans bear a reasonable rate of
interest; (4) loans are adequately secured; and (5) loans provide for repayment
over a reasonable period of time.
(b) Any loan granted or renewed on or after the last day of the
first Plan Year beginning after December 31, 1988, shall be made pursuant to a
written Loan Program which shall be contained in a separate document
incorporated herein by reference, and shall include the following:
(1) the identity of the person(s) or position(s)
authorized to administer the loan program;
(2) the procedure for applying for loans;
(3) the basis on which loans will be approved
or denied;
(4) limitations, if any, on types and amounts
of loans;
(5) the procedure for determining a reasonable
interest rate;
(6) the types of collateral which may secure a
loan; and
(7) the events constituting default and the
steps that will be taken to preserve plan
assets.
(c) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by any plan maintained by the
Employer) shall be limited to the lesser of:
(1) $50,000, reduced by the amount of principal repaid
on any prior loan within the 12-month period ending on the date a loan
is made, or
(2) the greater of (a) 1/2 the Participant's vested
Account balance, or (2) $10,000.
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<PAGE> 32
(d) Loans shall provide for level amortization with payments to be
made at least quarterly over a period not to exceed five (5) years.
(e) No distribution shall be made to any Participant or to a
Beneficiary of any Participant unless and until all unpaid loans, including
accrued interest thereon have been liquidated.
(f) Any loan made pursuant to this Section is earmarked as a
Directed Investment in the borrowing Participant's Account, pursuant to Section
7.10.
(g) Any loan where the vested interest of the Participant is used
to secure the loan shall require the written consent of the Participant's
Spouse. Such consent must be obtained within the 90 day period ending on the
date the loan is made. Such consent shall be binding with respect to the
consenting Spouse or any subsequent Spouse with respect to that loan. Any
security interest held by the Plan by reason of an outstanding loan shall be
taken into account in determining the amount of the death benefit or
Pre-Retirement Survivor Annuity. However, no spousal consent is required under
this paragraph if the total vested benefit subject to security is $3,500 or
less.
4.15 Limitation for Qualified Domestic Relations Order. All rights
and benefits, including elections, provided to a Participant in this Plan shall
be subject to the rights afforded to any Alternate Payee under a Qualified
Domestic Relations Order as those terms are defined in Code section 414(p).
Upon receipt of a Qualified Domestic Relations Order which orders plan benefits
for a Participant's Spouse, the Trustee may immediately pay such benefits in
accordance with the Qualified Domestic Relations Order regardless of the fact
that the Participant may not have reached "the earliest retirement age" as
defined in Code section 414(p). Attorneys fees and expenses directly related to
the determination of qualification of a domestic relations order and the
preparation and administration of such Qualified Domestic Relations Order may
be charged against and paid from the Accounts of the Participant named in the
order.
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<PAGE> 33
ARTICLE V - CONTRIBUTIONS BY THE EMPLOYER
5.01 Nonelective Contribution by Employer. For the Plan Year
beginning January 1, 1992 and each Plan Year thereafter, the Employer shall
contribute to the Trust a Nonelective Contribution on behalf of such
Participant who is employed on the last day of the Plan Year. The amount of the
nonelective contribution is equal to three percent (3%) of the Participant's
Compensation; provided, however, that the nonelective contribution for the 1992
Plan Year is equal to three percent (3%) of the Participant's Compensation from
May 1, 1992, through December 31, 1992; and provided further that the
nonelective contribution for the 1992 Plan Year for those Participants who were
formerly Participants in the Lenox, Incorporated Employees Savings and
Investment Plan and became Participants of this Plan during the 1992 Plan Year
shall be equitably adjusted as determined by the Plan Administrator on a
uniform, nondiscriminatory basis. The nonelective contributions made pursuant
to this Section are credited to the Participant's Company Retirement (CORE)
Account in accordance with Section 7.01.
5.02 Elective Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust the amount of the total salary reduction Election
Requests of all Participants made pursuant to Article VI (Elective
Contribution). The contributions made pursuant to this Section shall be
credited to each Participant's Elective Account in accordance with Section
7.02.
5.03 Matching Contribution by Employer. Each Plan Year the Employer
shall contribute to the Trust a Matching Contribution on behalf of each
Participant receiving an Elective Contribution for the Plan Year. Through March
31, 1994, the amount of the Matching Contribution shall be equal to 25% of the
Participant's Compensation deferred. Effective April 1, 1994, the amount of the
Matching Contribution shall be equal to 35% of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the remainder of a Participant's
Compensation deferred. Effective April 1, 1995, the amount of the Matching
Contribution shall be equal to 45% of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the remainder of a Participant's
Compensation deferred. Effective April 1, 1996, the amount of the Matching
Contribution shall be equal to fifty (50%) percent of a Participant's
Compensation deferred and 25% of the remainder of a Participant's Compensation
deferred. However, in applying the foregoing matching percentages, only
Participant Elective Contributions up to 15% of Compensation shall be
considered. The Matching Contribution shall be credited to the Employer
Matching Contribution Account of eligible Participants in accordance with
Section 7.03.
5.04 Deduction of Employer Contributions. Notwithstanding the
foregoing Sections of Article V, to the extent that any deduction for an
Employer contribution is disallowed, such contribution (to the extent
disallowed) may at the option of the Employer be returned to the Employer
provided the return is accomplished within one (1) year after the disallowance
of the deduction.
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5.05 Limits on Elective and Matching Contributions. For each Plan
Year, the Plan shall satisfy the nondiscrimination tests of Code sections
401(a)(4), 401(k)(3) and 401(m) in accordance with Regulation 1.401(k)-1 and
proposed Regulation 1.401(m)-1 and -2. The Code and Regulation sections are
incorporated by this reference.
Neither the Actual Deferral Percentage ("ADP") nor the Actual
Contribution Percentage ("ACP") of the Highly Compensated Employees may exceed
the greater of the following:
(a) 1.25 times the ADP or ACP of all other eligible
Employees, or
(b) 2 percentage points higher than the ADP or ACP of all
other eligible Employees, up to 2 times such ADP or ACP.
For Plan Years beginning after December 31, 1988, to prevent the
multiple use of the tests in this subsection (b), if a Highly Compensated
Participant is eligible to make elective deferrals pursuant to any cash or
deferred arrangement maintained by the Employer or an Affiliated Employer, or
to make Employee contributions or receive matching contributions under this or
any other plan maintained by the Employer or an Affiliated Employer, such
Participant's Actual Contribution Percentage shall be reduced pursuant to
Treasury regulation 1.401(m)-2. The provisions of regulations 1.401(m)-1(b) and
1.401(m)-2 are incorporated by reference.
The Actual Deferral Percentage for each Participant is calculated by
dividing the Participant's Elective Contributions for a Plan Year by the
Participant's Compensation for such Plan Year. The ADP for each group ((i)
Highly Compensated Employees and (ii) non-Highly Compensated Employees) is the
average of the ADPs of each eligible Participant in the group, calculated to
the nearest one-hundredth of one percent. Elective Contributions allocated to
non-Highly Compensated Participants shall not include Excess Deferrals
(determined pursuant to Section 6.01.)
The Actual Contribution Percentage for each Participant is calculated
by dividing the Participant's Matching Contributions and Voluntary
Contributions (including Excess Contributions recharacterized as Voluntary
Contributions) for the Plan Year by the Participant's Compensation for such
Plan Year. The ACP for each group ((i) Highly Compensated Employees and (ii)
non-Highly Compensated Employees) is the average of the ACPs of each eligible
Participant in the group calculated to the nearest one-hundredth of one
percent.
For purposes of this Section, Compensation shall include salary
reduction contributions made under this Plan or to a cafeteria plan.
For purposes of determining the ADP and ACP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the Elective Contributions, Matching Contributions, Voluntary
Contributions and Compensation of such Participant shall include the Elective
Contributions, Matching Contribution, Voluntary Contribution and Compensation
of "family members" (as defined in Code section 414(q)(6)), and the family
group
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<PAGE> 35
shall be treated as one Highly Compensated Participant. Family members shall be
disregarded for purposes of determining the ADP and ACP of the group of
non-Highly Compensated Participants.
If a Highly Compensated Participant is a Participant under two or more
plans of the Employer or an Affiliated Employer (other than an employee stock
ownership plan as defined in Code section 4975(e)(7)) to which Elective
Contributions, Matching Contributions or Voluntary Contributions are made, such
contributions on behalf of such Highly Compensated Participant shall be
aggregated in determining the ADP and ACP of such Participant. For Plan Years
beginning after December 31, 1988, if the plans have different plan years, all
plans ending within the same calendar year shall be treated as a single plan.
If this Plan satisfies the requirements of Code sections 401(k),
401(m), 401(a)(4), or 410(b) only if aggregated with one or more other plans,
or if one or more other plans satisfy such requirements only if aggregated with
this Plan, then the ADP and ACP of employees shall be determined as if all such
plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated to satisfy Code section 401(k) and 401(m) only if they
have the same Plan Year.
5.06 Special Employer Contributions. Within 12 months after the
end of the Plan Year, the Employer may make a discretionary Special Employer
Contribution to the Trust which shall be allocated to the Elective Accounts of
eligible Participants to the extent necessary to satisfy one of the
nondiscrimination tests specified in the Section 5.05.
The Employer may, in its discretion, allocate Special Employer
Contributions under one of the following methods:
(a) To each eligible Participant or group of eligible
Participants in the ratio each such eligible Participant's Compensation bears
to the Compensation of all such eligible Participants.
(b) As a level dollar amount to each eligible
Participant or group of eligible Participants.
(c) To the lowest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next lowest paid eligible Participant or group
of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
(d) To the highest paid eligible Participant or group of
eligible Participants, up to the lesser of the amount permitted by law or the
amount necessary to pass the nondiscrimination test. If this amount is not
sufficient to pass the nondiscrimination test, a similar Special Employer
Contribution may be made for the next highest paid eligible Participant or
group of eligible Participants. This process may be repeated until the
nondiscrimination test is satisfied.
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<PAGE> 36
Special Employer Contributions made pursuant to this Section are fully
vested and treated like Elective Contributions, except for purposes of matching
under Section 5.03. If Special Employer Contributions are made for purposes of
satisfying one of the nondiscrimination tests outlined in Section 5.05, a
separate accounting shall be maintained within the applicable Elective
Contribution Accounts to prevent such Special Employer Contributions from being
taken into consideration for purposes of determining whether any other
contributions satisfy the remaining nondiscrimination tests.
5.07 Correction of Excess Elective Contributions. If the amount of
Elective Contributions allocated to the group of Highly Compensated
Participants exceeds the nondiscrimination tests specified in Section 5.05, the
Plan Administrator shall distribute to the Highly Compensated Participant
having the highest ADP such Participant's excess amounts ("Excess
Contributions") and income allocable thereto (determined under applicable
regulations) until the nondiscrimination tests are satisfied, or until such
Participant's ADP equals the ADP of the Highly Compensated Participant having
the second highest ADP. This process shall continue until the nondiscrimination
tests are satisfied. The amount of Excess Contributions for a Highly
Compensated Participant is then equal to the total of elective and other
contributions taken into account for the ADP test, minus the product of the
employee's ADP (as determined after application of this Section) and the
employee's compensation used in determining that ratio. The amount of Excess
Contributions to be distributed or recharacterized shall be reduced by any
previous distribution of Excess Deferrals (pursuant to Section 6.01) for the
employee's taxable year ending in the same Plan Year.
Excess Contributions shall within two and one-half months after the
Plan Year end be: (i) distributed to the Participant, and/or (ii)
recharacterized as an amount distributed to the Participant and contributed to
the Plan as a Voluntary Contribution. Distribution may be postponed but not
later than the close of the Plan Year following the Plan Year in which the
Excess Contribution was allocable; however, if the Excess Contributions are not
corrected within two and one-half months after the Plan Year end, a 10% excise
tax will be imposed on the Employer on such amounts. Recharacterization may be
combined with distribution to correct Excess Contributions. The Employer shall
designate the distribution/recharacterization as Excess Contributions.
The income allocable to Excess Contributions includes income for the
Plan Year for which the Excess Contributions were made.
Distribution and/or recharacterization shall be made first from
unmatched Elective Contributions, and then simultaneously from matched Elective
Contributions and Matching Contributions which relate to such Elective
Contributions. However, any such Matching Contributions which are not vested
shall be forfeited in lieu of distribution.
For purposes of applying the Top Heavy rules, recharacterized Excess
Contributions shall continue to be treated as Elective Contributions. Amounts
recharacterized shall continue to be subject to the nonforfeitability
requirements and distribution restrictions that apply to Elective
Contributions.
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<PAGE> 37
Correction of Excess Contributions of a Highly Compensated Participant
whose ADP is determined under the family aggregation rules shall be made in
accordance with Regulation 1.401(k)- 1(f)(5)(ii).
5.08 Correction of Excess Employer Matching Contributions and
Voluntary Contributions. If the amount of Matching Contributions or Voluntary
Contributions allocated to the group of Highly Compensated Participants exceeds
the nondiscrimination tests specified in Section 5.05, the Plan Administrator
shall distribute to the Highly Compensated Participant having the highest ACP
such Participant's excess amounts ("Excess Aggregate Contributions") and income
allocable thereto (determined under applicable regulations) until the
nondiscrimination tests are satisfied, or until such Participant's ACP equals
the ACP of the Highly Compensated Participant having the second highest ACP.
This process shall continue until the nondiscrimination tests are satisfied.
The amount of Excess Aggregate Contributions for a Highly Compensated Employee
is then equal to the total of voluntary, matching and other contributions taken
into account for the ACP test, minus the product of the Employee's ACP (as
determined after application of this Section) and the Employee's Compensation
used in determining that ratio.
Excess Aggregate Contributions shall be forfeited or distributed
within two and one-half months after the Plan Year end. Forfeiture/distribution
may be postponed but not later than the close of the Plan Year following the
Plan Year in which the excess amount was allocable; however, if the Excess
Aggregate Contributions are not corrected within two and one-half months after
the Plan Year end, a 10% excise tax will be imposed on the Employer on such
amounts. The Employer shall designate the forfeiture/distribution as Excess
Aggregate Contributions. The order of forfeiture/distribution shall be as
follows:
(a) Matching Contributions distributed and/or forfeited
pursuant to Section 5.07.
(b) Voluntary Contributions, including recharacterized
amounts;
(c) remaining Matching Contributions.
The income allocable to Excess Aggregate Contributions includes income
for the Plan Year for which the Excess Aggregate Contributions were made.
The determination of Excess Aggregate Contributions for any Plan Year
shall be made after first determining the amount of any Excess Contributions to
be recharacterized as Voluntary Contributions for the Plan Year of the Plan
subject to Code section 401(k) ending with or within the Plan Year of this
Plan. Correction of Excess Aggregate Contributions of a Highly Compensated
Participant whose ACP is determined under the family aggregation rules shall be
made in accordance with Regulation 1.401(m)-1(e)(2)(iii).
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<PAGE> 38
5.09 Return of Contribution. In the case of a contribution which is
made by the Employer by a mistake of fact, such contribution may be returned to
the Employer within one (1) year after the payment of the contribution. In the
case of a contribution for which a deduction is disallowed under Internal
Revenue Code Section 404, such contribution may be returned to the Employer
within one (1) year following the disallowance or as permitted or required by
the Code or by ERISA.
5.10 Plan and Trust Conditioned on Approval and Qualification. The
Employer has established the Plan and Trust conditioned on their being
qualified by the Internal Revenue Service pursuant to Code sections 401 and 501
and other applicable sections. If the Internal Revenue Service rules that such
Plan is not qualified, the Employer reserves the right to recover contributions
which were made prior to a final ruling from the Internal Revenue Service with
respect to the initial determination as to qualification of the Plan and Trust.
Any contribution of the Employer shall be returned to the Employer within one
(1) year after the date of the final ruling with respect to the denial of
initial qualification of the Plan and Trust.
5.11 Funding Policy. The Employer shall establish a funding policy
for the Plan and a method to carry out Plan objectives which shall satisfy the
requirements of Title I of the Employee Retirement Income Security Act of 1974.
All actions taken with respect to such funding policy and method and the
reasons therefore shall be recorded by the Employer and communicated to the
Trustee.
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ARTICLE VI - PARTICIPANT CONTRIBUTIONS
6.01 Amount of Elective Contribution. Each Participant may elect
to defer his or her Compensation and have the Employer make an Elective
Contribution to the Trust on behalf of the Participant. Elective Contributions
may be an amount between two percent (2%) and fifteen percent (15%) (in
increments of 1%) of the Participant's Compensation for the Plan Year in
question, but shall not exceed a dollar amount as adjusted pursuant to the
method provided in Code section 415(d) for the Participant's taxable year. The
Plan Administrator may fix lower maximums for Highly Compensated Employees to
satisfy the nondiscrimination tests of Section 5.05.
If the dollar limitation provided above is exceeded, the excess amount
("Excess Deferral"), plus any income and minus any loss attributable to such
amount, shall be distributed to the Participant by April 15 of the year
following the year in which the excess amount was contributed, and in no event
later than the last day of the Plan Year following the Plan Year in which the
excess arose. The amount distributed shall not exceed the Participant's salary
reduction contribution under the Plan for the year. A Participant's Excess
Deferral shall be reduced (but not below zero) by any previous distribution or
recharacterization of Excess Contributions pursuant to Section 5.07 for the
Plan Year beginning within the Participant's taxable year.
6.02 Election Request. Elective Contributions for Participants
shall be such amounts as the Participant elects to have contributed on the
Participant's behalf pursuant to a salary reduction Election Request completed
by the Participant and filed with the Employer. Under no circumstances may an
Election Request be adopted retroactively.
6.03 Change of Rate. Participants may change the rate of the
Elective Contribution (in accordance with the Election Request form) by
notifying the Employer and the Plan Administrator at least fifteen (15) days
prior to the date such changes in contribution are to take effect, or at any
other time mutually agreeable between the Employer and the Participant,
provided that all Participants under similar circumstances are treated alike.
6.04 Distributions from Elective Account. Amounts held in a
Participant's Elective Contribution Account may be distributed only upon:
(i) the Participant's retirement, death, Total and
Permanent Disability, separation from service, or attainment of age 59
1/2;
(ii) the termination of the Plan without the existence or
establishment of another defined contribution plan (other than an
employee stock ownership plan);
(iii) the sale by the Employer to an unrelated entity of
substantially all of the assets (within the meaning of Code section
409(d)(2)) used in a trade or business of such
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<PAGE> 40
corporation if the Participant continues employment with the
corporation acquiring such assets;
(iv) the sale by the Employer to an unrelated entity of
its interest in a subsidiary (within the meaning of Code section
409(d)(3)), with respect to a Participant who continues employment
with such subsidiary;
(v) the Participant's financial hardship, pursuant to
Section 4.13; or
(vi) pursuant to Sections 6.01 and 5.07.
6.05 Voluntary Contributions. Voluntary contributions are permitted
to the extent such contributions are excess contributions recharacterized as
voluntary contributions in accordance with Section 5.07.
6.06 Withdrawal from Voluntary Contribution Account. Any withdrawal
from the Participant's Voluntary Contribution Account is subject to the
distribution rules provided in Section 6.04.
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<PAGE> 41
ARTICLE VII - ALLOCATION TO INDIVIDUAL PARTICIPANTS
7.01 Allocation of Nonelective Employer Contribution. Each Plan
Year the Nonelective Employer Contribution shall be allocated to the CORE
Accounts of all eligible Participants employed on the last day of the Plan Year
in the same manner as the contribution is determined pursuant to Section 5.01.
7.02 Allocation of Elective Contributions. Each Plan Year the
Employer shall allocate the Elective Contribution made on behalf of a
Participant subject to such Participant's Election Request to the Elective
Contribution Account of such Participant in the same manner as the contribution
is determined pursuant to Section 6.01.
7.03 Allocation of Matching Contribution. Each Plan Year Employer
Matching Contributions shall be allocated to the Employer Matching Contribution
Account of each eligible Participant receiving an Elective Contribution in the
same manner as the Matching Contribution is determined pursuant to Section
5.03.
Participants shall be eligible to receive a Matching Contribution only
if they are active Participants on the last day of the calendar quarter to
which the contribution relates.
7.04 Allocation of Forfeitures. As of each Accounting Date, any
amounts which became forfeitures shall first be made available to reinstate
previously forfeited account balances of reemployed Participants, if any. The
remaining forfeitures shall be used to reduce the Employer's matching
contribution for the current Plan Year.
7.05 Amendment of Allocation Eligibility. Notwithstanding anything
to the contrary, for Plan Years beginning after December 31, 1989, if this is a
Plan that would otherwise fail to meet the requirements of Code sections
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations thereunder because
Employer contributions have not been allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules shall
apply:
(a) The group of Participants eligible to share in the
Employer's contribution for the Plan Year shall be expanded to include
the minimum number of Participants who would not otherwise be eligible
as are necessary to satisfy the applicable test specified above. The
specific Participants who shall become eligible under the terms of
this paragraph shall be those who are actively employed on the last
day of the Plan Year and, when compared to similarly situated
Participants, have completed the greatest number of Hours of Service
in the Plan Year.
(b) If after application of paragraph (a) above, the
applicable test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and forfeitures for
the Plan Year shall be further expanded to include the minimum number
of
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<PAGE> 42
Participants who are not actively employed on the last day of the Plan
Year as are necessary to satisfy the applicable test. The specific
Participants who shall become eligible to share shall be those
Participants, when compared to similarly situated Participants, who
have completed the greatest number of Hours of Service in the Plan
Year before terminating employment.
(c) Nothing in this Section shall permit the reduction
of a Participant's accrued benefit. Any adjustment to the allocations
pursuant to this paragraph shall be considered a retroactive amendment
adopted by the last day of the Plan Year.
7.06 Maximum Additions to Participant's Account. Notwithstanding
any Plan provisions to the contrary, the maximum "Annual Additions" credited to
any Participant's Accounts and the "Annual Additions" to the account of the
same Employee as a Participant in any other defined contribution plan of the
Employer shall equal the lesser of: (1) thirty thousand dollars ($30,000), or,
if greater, one-fourth of the dollar limitation in effect under Code section
415(b)(1)(A)), or (2) twenty-five percent (25%) of the Participant's
compensation.
"Annual Additions" with respect to any Participant shall mean the sum
credited to a Participant's Accounts for any Limitation Year of: (1) Employer
contributions; (2) Employee contributions; (3) forfeitures; (4) amounts
allocated, after March 31, 1984, to an individual medical account (as defined
in Code section 415(1)(2)) which is part of a pension or annuity plan
maintained by the Employer, and (5) amounts derived from contributions paid or
accrued after December 31, 1985, in taxable years ending after such date, which
are attributable to post-retirement medical benefits allocated to the account
of a key employee (as defined in Code section 419(A)(d)(3)) under a welfare
benefit plan of the Employer. Annual Additions shall not include the transfer
of funds from one qualified plan to another, rollover contributions, repayment
of a loan made from the plan, repayment of distributions after cash-outs, and
Employee contributions to a SEP which are excludible from gross income.
The "Limitation Year" is the Plan Year, or such other twelve (12)
consecutive month period as designated by resolution of the Employer; however,
in the absence of such resolution, the Limitation Year shall be the Plan Year.
If as a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Compensation, or other facts and circumstances which
the Commissioner finds justify the availability of the rules of this Section,
the Annual Additions to a Participant under this Plan would cause the maximum
Annual Additions to such Participant's Accounts to be exceeded, the Plan
Administrator shall:
(a) Return any elective contributions and/or any
voluntary contributions credited for the Limitation Year to the extent
the return would reduce the excess amount in the Participant's
Accounts;
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(b) Hold any remaining excess after the return of
elective and/or voluntary contributions in the Participant's Account
to be used to reduce Employer contributions in the next Limitation
Year and succeeding years if necessary;
(c) If an excess amount still exists and the Participant
is not covered by the Plan at the end of a Limitation Year, the excess
amount will be held in a suspense account and applied to reduce
Employer contributions for all remaining Participant's in the next
Limitation Year (and succeeding years if necessary) before any
Employer or Employee contributions may be made to the Plan for that
Limitation Year; or
(d) Reduce Employer Matching Contributions to the Plan
for such Limitation Year by the amount of the suspense account
allocated and reallocated during such Limitation Year.
Such suspense account may or may not be adjusted by investment gains
or losses. Upon termination of the Trust any amounts held in such suspense
account shall not be distributed but shall be returned to the Employer to the
extent they cannot be allocated to Participants because of the limitations
under Code section 415.
For purposes of this Section, "compensation" for any Employee shall
mean a Participant's earned income, wages, salaries, fees for professional
services and other amounts for personal services rendered in the course of
employment with the Employer (including, but not limited to, commissions paid
salespersons, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips and bonuses) paid during the Limitation
Year, but excluding the following:
(a) Employer contributions to a plan of deferred
compensation which are not includible in the Participant's gross
income in the year in which contributed;
(b) any distributions from a plan of deferred
compensation (except from an unfunded nonqualified plan when
includible in gross income);
(c) Employer contributions under a simplified employee
pension plan to the extent such contributions are deductible by the
employee;
(d) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferrable or is no longer subject
to a substantial risk of forfeiture;
(e) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
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<PAGE> 44
(f) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity described in
Code section 403(b) (whether or not the amounts are actually
excludible from the employee's gross income.)
For Limitation Years beginning after December 31, 1988, compensation
shall be limited to $200,000 as adjusted in the same manner as permitted under
Code section 415(d).
7.07 Overall Limit. In addition to the foregoing if any Participant
is (or has been) a Par ticipant under any defined benefit plan of the Employer,
the sum of the Defined Benefit and Defined Contribution Fractions (defined
below) for any Limitation Year shall not exceed 1.0.
(a) Defined Benefit Fraction. The Defined Benefit
Fraction for any Limitation Year is a fraction, the numerator of which
is the Participant's projected annual benefit under the Plan at Normal
Retirement Age (determined at the close of the Limitation Year), and
the denominator of which is the lesser of (a) 1.25 multiplied by the
dollar limitation provided under Code section 415(b)(1)(A) for such
Limitation Year, as adjusted, or (b) 1.4 multiplied by the amount
which may be taken into account under Code section 415(b)(1)(B) for
such Limitation Year.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined benefit plans
maintained by the employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning before
January 1, 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate satisfied
the requirements of Code section 415 for all Limitation Years
beginning before January 1, 1987.
(b) Defined Contribution Fraction. The Defined Contribution
Fraction is a fraction, the numerator of which is the sum of Annual
Additions to a Participant's account made under all defined
contribution plans of the Employer (whether or not terminated) for the
current and all prior Limitation Years (including the annual additions
attributable to the participant's nondeductible employee contributions
to the participant's plans, whether or not terminated, maintained by
the employer, and the annual additions attributable to all welfare
benefit funds, as defined in section 419(e) of the Code, and
individual medical accounts, as defined in section 415(1)(2) of the
Code maintained by the employer); and the denominator of which is the
sum of the lesser of the following amounts determined for the current
Limitation Year and all prior years of service with the Employer
(regardless of whether a defined contribution plan was maintained by
the Employer): (a) 1.25 multiplied by the dollar limitation determined
under Code section 415(b) and (d) in effect under Code section
415(c)(1)(A), or (b) 35 percent of the Participant's compensation for
such year.
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<PAGE> 45
If the employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31, 1986, in
one or more defined contribution plans maintained by the employer
which were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. the adjustment is calculated using the fractions as they
would be computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but using the section
415 limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
Employee contributions as Annual Additions.
For purposes of this Section, all defined benefit plans of the
Employer, whether or not terminated, are to be treated as one defined benefit
plan and all defined contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution plan.
The extent to which the contribution made to the Participant's Account
under this Plan shall be reduced as compared with the extent to which the
annual benefit under any other defined benefit plans or defined contribution
plans shall be reduced in order to achieve compliance with the limitations of
Internal Revenue Code Section 415 shall be determined by the Plan Administrator
in such a manner so as to maximize the aggregate benefits payable to such
Participant. If such reduction is under this Plan, the Plan Administrator shall
advise affected Participants of any additional limitation on their annual
contribution or benefits required by this paragraph.
7.08 Date of Allocation to Accounts. For all purposes of this Plan,
allocations to Participants' Accounts shall be deemed to have been made on the
Accounting Date to which they are related, although they may actually be
determined on some later date.
7.09 Expenses of Plan. All necessary expenses of administering this
Plan, including Trustee's fees, attorney's fees, or consulting fees, and any
other necessary expenses that may arise in connection with this Plan shall be
paid by the Trustee from the income or corpus of the Trust unless they are paid
by the Employer.
7.10 Participant Direction of Investment.
(a) A Participant has the right to direct the Trustee
with respect to the investment or re-investment of the assets comprising the
Participant's individual accounts. The Trustee will accept direction from each
Participant on a written election form (or other written agreement), as a part
of this Plan containing such conditions, limitations and other provisions the
parties deem appropriate. The Trustee or, with the Trustee's consent, the Plan
Administrator, may establish
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<PAGE> 46
written procedures, incorporated specifically as part of this Plan, relating to
Participant direction of investment under this Section 7.10.
(b) The Trustee will maintain a segregated investment
Account to the extent a Participant's Account is subject to Participant
self-direction. Each such segregated investment Account shall be adjusted with
the earnings, losses and expenses attributable to said Account.
(c) The Employer and the Trustee intend that this Plan
qualify as an ERISA 404(c) Plan, and as such, the Plan's fiduciaries are
relieved of fiduciary responsibility or liability for any losses resulting from
a Participant's direction of the investment of any part of the Participant's
directed Accounts.
7.11 Periodic Adjustments to Account. The Account(s) held in trust
for the benefit of a Participant shall be adjusted in an equitable and
reasonable manner, generally to be determined as follows unless circumstances
require otherwise in fairness:
(a) Regular Periodic Adjustments. As of each Accounting
Date, before allocation of contributions and forfeitures, any increase
or decrease in the fair market value of the Trust since the
immediately preceding Accounting Date shall be computed by the
Trustee, and such increase or decrease shall be credited to or
deducted from the nonsegregated accounts of all Participants in the
proportion that the balance of each Participant's Accounts bears to
the total current balance of all Participant's Accounts. An equitable
adjustment shall be made to the Account(s) of any Participant
receiving distributions during the Plan Year.
(b) Determination of Increase or Decrease. For the
purposes of subsection (a) of this Section, the increase or decrease
in the fair market value of the Trust shall be the difference between
the following:
(i) The fair market value of the Trust on the
current Accounting Date as of which the calculation is made,
excluding the Employer's contribution and all voluntary
contributions of Participants for the current Accounting
Date, less
(ii) The fair market value of the Trust on the
immediately preceding Accounting Date, including the
Employer's contribution and all voluntary contributions of
Participants as of such Accounting Date, but not including
any amount falling due and paid from the Trust during such
Plan Year.
(c) Account Valuation for Distribution Purposes. For
purposes of benefit distribution, a Participant's Account shall be
valued as of the Accounting Date coincident with or immediately
preceding the date of distribution; (but in the case of a
Participant's Voluntary Contribution Account shall also include the
amount of any voluntary contributions made by the Participant after
such Accounting Date): provided, however, if the Plan Administrator
directs payment of a Participant's Accounts in any manner other than a
single payment to be
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<PAGE> 47
made prior to the next regular periodic adjustment of Accounts such
Participant's Accounts shall continue to receive regular periodic
adjustments as aforesaid, but shall no longer be increased by the
allocation of Employer contributions.
(d) Single Payment and Interim Valuation. In the event
that, for whatever reason, distribution of a Participant's Account is
to be made in a single payment, such Account may, at the option of the
Plan Administrator, be adjusted for the purposes of such distribution
in order to account for any substantial changes in the value of the
Trust assets since such Account's most recent regular periodic
adjustment. In such event, the Plan Administrator shall restate the
value of the Trust assets in order to determine the percentage of
increase or decrease in the fair market value of all net Trust assets
(deducting any advance contributions and any voluntary contributions
of Participants for the Plan Year in question) as of the end of the
month (hereinafter referred to as the Interim Valuation Date) next
preceding the date of distribution of the Account. The Participant's
Account, as of the Accounting Date immediately preceding such Interim
Valuation Date, shall, for the purpose of distribution only, be
adjusted to reflect such increase or decrease, as the case may be, by
multiplying such Account by the percentage determined as aforesaid.
Such interim valuation percentage once determined shall be applied to
the Accounts of any other Participants who are to receive a
distribution of their Account in a single payment following such
Interim Valuation Date but prior to the next regular periodic
adjustment of Accounts, or the next Interim Valuation Date, whichever
is earlier.
(e) Self-Directed Accounts. Participants segregated
accounts shall be adjusted with their separate increase or decrease.
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<PAGE> 48
ARTICLE VIII - TOP HEAVY PROVISIONS
8.01 When Provisions Effective. The following Top Heavy provisions
shall become effective in any Plan Year in which the Plan is determined to be a
Top Heavy Plan, and will supersede any conflicting Plan provisions.
8.02 Determination of Top Heavy. The Plan will be considered a Top
Heavy Plan for the Plan Year if as of the Determination Date (the last day of
the preceding Plan Year, or in the first Plan Year the last day of the Plan
Year) the sum of the present value of accrued benefits of Key Employees and/or
the total of the account balances of Key Employees under this Plan and all plans
of an "Aggregation Group" (as defined below), exceeds 60% of the sum of the
present value of accrued benefits and the total account balances of all
Participants under this Plan and/or all plans of an Aggregation Group. However,
this Plan shall not be considered Top Heavy if it is part of an Aggregation
Group that is not Top Heavy.
The determination of account balances and/or accrued benefits to be
used in the calculation of the Top Heavy ratio and the extent to which
distributions, rollovers and transfers are taken into account will be made in
accordance with Section 416(g) of the Code and the regulations thereunder.
The accrued benefits and/or account balance of a Participant (1) who is
not a Key Employee but was a Key Employee in a prior year, or (2) has not
performed any services for any Employer maintaining the Plan during the 5-year
period ending on the Determination Date, shall be disregarded.
"Aggregation Group" means either a Required Aggregation Group or a
Permissive Aggregation Group as defined below:
(a) Required Aggregation Group means: (1) each plan of
the Employer in which a Key Employee is a Participant, and (2) each
other plan of the Employer which enables any plan described in (1)
above to meet the requirements of Section 401(a)(4) or 410 of the Code.
A Required Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(b) Permissive Aggregation Group means any plans of the
Employer not required to be included in a Required Aggregation Group
but which may be combined and treated as part of such group if such
group would continue to meet the requirements of Section 401(a)(4) and
410 of the Code. In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be considered
a Top Heavy plan if the Permissive Aggregation Group is Top Heavy.
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<PAGE> 49
Key Employee means an employee as defined in Code section 416(i) and
the regulations thereunder. For purposes of determining who is a Key Employee,
"compensation" shall mean compensation as defined in Code section 415(c)(3), but
including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludible from the employee's gross income under Code
section 125, 402(a)(8), 402(h) or 403(b).
8.03 Top Heavy Vesting Schedule. If the Plan becomes Top Heavy, a
Participant's vested interest in such Participant's CORE Account shall be
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Percentage
Years of Service of Account
---------------- -----------------
<S> <C>
Less than 3 years 0%
3 years or more 100%
</TABLE>
8.04 Compensation Limitation. For Plan Years beginning prior to
January 1, 1989 in which the Plan is a Top Heavy Plan, Compensation shall be
limited to $200,000 for purposes of this Article.
8.05 Minimum Benefits. The provisions of Article VII
notwithstanding, a minimum contribution must be provided by the Employer
contribution and/or forfeitures to the account of each non-Key Participant equal
to the lesser of (1) 3% of Compensation, or (2) if the Employer has no defined
benefit plan which designates this Plan to satisfy Code section 401(a)(4) or
410, the largest percentage of Employer contribution and/or forfeitures
allocated to the Account of a Key Employee. Such minimum contribution must be
allocated to the account of all non-Key Participants who are employed by the
Employer on the Accounting Date, regardless of the number of Hours of Service
credited during the Plan Year to which the contribution relates, regardless of
whether or not the Participant makes mandatory contributions for the Plan Year
to which the contribution relates, and regardless of the Participant's level of
Compensation.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group, the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.06 Impact on Maximum Benefits. For any Plan Year in which the
Plan is a Top Heavy Plan but not a Super Top Heavy Plan, Section 7.07 shall be
read by substituting the number 1.00 for the number 1.25 wherever it appears
therein, unless the Plan meets the following additional minimum benefit
requirements:
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<PAGE> 50
(i) If a Key Employee is a Participant in both this Plan
and a defined benefit plan included in a Required Aggregation Group
which is Top Heavy, the minimum allocation shall be provided for each
non-Key Employee who is a Participant only in this Plan by substituting
four percent (4%) for three percent (3%) in Section 8.05;
(ii) If a Key Employee is a Participant in both this Plan
and a defined benefit plan included in a Required Aggregation Group
which is Top Heavy, the minimum allocation shall be provided for each
non-Key Employee who is a Participant in both this Plan and such a
defined benefit plan by substituting seven and one-half percent (7
1/2%) for three percent (3%) in Section 8.05.
If the Employer maintains one or more other qualified defined
contribution plans, and if the Plans are a part of the Required or Permissive
Aggregation Group the minimum benefit for Non-Key Employees may be provided in
any one of the Plans, or the minimum benefit requirement may be satisfied by
aggregating the contributions made in all of the aggregated defined contribution
plans of the Employer.
8.07 Determination of Super Top Heavy. The Plan is Super Top Heavy
if as of the Determination Date the sum of the account balances and/or present
value of accrued benefits of Key Employees under this Plan and all Plans of an
Aggregation Group does not exceed 90% of the sum of the account balances and/or
present value of accrued benefits of all Participants under this Plan and all
Plans of an Aggregation Group.
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<PAGE> 51
ARTICLE IX - PORTABILITY OF ACCOUNT
9.01 Transfers to Another Qualified Plan. If a Participant shall be
entitled to receive benefits under this Plan, and the Participant shall be
subsequently employed by another Employer which has a plan qualified pursuant to
Internal Revenue Code section 401(a) as now in effect or hereafter amended, the
Trustee, at the direction of the Plan Administrator, may transfer the
Participant's vested interest in that Participant's Account under this Plan
directly to the trustee of the plan of the Participant's new employer if the
following are satisfied: (1) the trustee of the other plan shall be authorized
to accept the benefits under this Plan; (2) the Participant's transferred
Account shall not be forfeitable or reduce in any way the obligation of the new
Employer; and (3) the Participant's transferred Account shall be maintained in a
separate account in the other plan. The Trustee may transfer a Participant's
benefits under this Plan to another plan of the Employer, subject to the above
requirements.
9.02 Eligible Rollover Distributions. This section applies to
distributions made on or after January 1, 1993. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a distributee's election
under this section, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan specified by
the distributee in a direct rollover. The following definitions are applicable
under this section:
(a) Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible rollover
distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is
required under section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An eligible retirement plan
is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
(c) Distributee. A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former
46
<PAGE> 52
employee's spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse or
former spouse.
(d) Direct Rollover. A direct rollover is a payment by
the plan to the eligible retirement plan specified by the distributee.
9.03 Transfers to this Plan. With the consent of the Plan
Administrator, the Trustee of this Plan is authorized to accept the following
assets upon the terms and conditions set forth above from a trustee of another
qualified plan or from a former Participant of another qualified plan: (i)
amounts transferred directly from a trustee of another qualified plan, or (ii)
lump sum distributions received by a former Participant of another qualified
plan which are eligible for tax free rollover and are rolled into this Plan
within 60 days of receipt by such Participant. The Trustee is not authorized to
receive rollovers from conduit Individual Retirement Accounts.
The Trustee may not accept assets coming directly or indirectly from
(1) any defined benefit plan, (2) any defined contribution plan which is subject
to the funding standards of Section 412 of the Code, or (3) any other plan which
offered an annuity in any form to its Participants, unless the acceptance of
such assets does not require any additional optional form of benefit to be
provided under this Plan. Such transfers from other qualified plans shall be
segregated in a fully vested and nonforfeitable Participant Rollover Account.
Amounts attributable to elective contributions (as defined in
Regulation 1.401(k)-1(g)(4)), including amounts treated as elective
contributions, which are transferred to this Plan from another plan in a
plan-to-plan transfer shall continue to be subject to the distribution
limitations provided in regulation 1.401(k)-1(d).
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<PAGE> 53
ARTICLE X - PARTICIPATING EMPLOYERS
10.01 Adoption by Other Employers. With the consent of Brown-Forman
Corporation, any Affiliated Employer may adopt this Plan and all of its
provisions, participate in the Plan, and be known as a participating Employer,
by a properly executed document evidencing the intent and will of Brown-Forman
Corporation.
The aforementioned document may contain such specific changes and
variation in Plan terms and provisions applicable to such participant Employer
and its Employees as may be acceptable to the Plan Administrator. However, the
sole, exclusive right of termination of or of any other amendment to the Plan,
of whatever kind or extent, is reserved by Brown-Forman Corporation. The
aforementioned document becomes, as to such participant Employer and its
Employees, a part of this Plan as then amended or thereafter amended. It is not
necessary for the participating Employer to sign or execute the original or
then-amended Plan document. The coverage date for any such participating
Employer is the date stated in the aforementioned document. From and after the
effective date of coverage, the participating Employer shall assume all the
rights, obligations, and liabilities of an Employer under the Plan. The
administrative powers of and control by Brown- Forman Corporation, as provided
in the Plan, including the sole right to terminate or amend, and to appoint and
remove the Plan Administrator, are not diminished by reason of the participation
of any participating Employer in the Plan.
10.02 Withdrawal from the Plan. Any participating Employer, by
action of its governing authority, may withdraw from the Plan after giving 90
days advance notice to the Board of Directors of Brown-Forman Corporation,
provided the Board of Directors consents to such withdrawal.
10.03 Action of a Single Employer. The term "Employer" refers to all
Affiliated Employers that adopt this Plan with the consent of Brown-Forman
Corporation; however, whenever action is taken by an Affiliated Employer to
commence or terminate participation or to alter the Plan terms or provisions as
they apply to its Employees, such action applies only to said Affiliated
Employer and does not affect this Plan document with respect to any other
participating Employer.
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<PAGE> 54
ARTICLE XI - PLAN ADMINISTRATOR
11.01 Appointment of Plan Administrator. The Employer will appoint
one (1) or more persons or the Employer as the Plan Administrator who shall
serve without compensation from the Trust. The Plan Administrator is a named
fiduciary for purposes of the Employee Retirement Income Security Act of 1974.
The Employer shall notify the Trustee of the name or names of the Plan
Administrator and or any changes in Plan Administrator. The Plan Administrator
shall serve until resignation or dismissal by the Employer and vacancies shall
be filled in the same manner as the original appointments. The Board of
Directors of the Employer may dismiss the Plan Administrator at any time with or
without cause.
11.02 Duties of Plan Administrator. The Plan Administrator shall
have the duty, full discretionary authority and full discretionary control to
manage the operation and administration of the Plan, including, but not limited
to, the duty and authority to:
(a) Records. Keep records regarding Participants' service
with the Employer and resultant benefits under the Plan;
(b) Reports to Governmental Authorities. Make periodic
reports to the Internal Revenue Service and Department of Labor as
required by law;
(c) Notices. Provide proper notification to Participants
as required by law;
(d) Administration of Benefits. Construe and interpret
the Plan, including supplying any omissions in accordance with the
intent of the Plan, decide all questions of eligibility, determine the
amount, manner and time of payment of any benefits hereunder, authorize
the payment of benefits, and issue directions to the Trustee (and/or
insurance company, if applicable) regarding the payment of such
benefits;
(e) Plan Information. Prepare and distribute, in such
manner as the Plan Administrator determines to be appropriate,
information explaining the Plan; and receive from the Employer and from
Participants information necessary for the proper administration of the
Plan;
(f) Reports to Employer. Furnish the Employer upon
request, such annual reports with respect to the administration of the
Plan as are reasonable and appropriate;
(g) Financial Reports. Receive, review and keep on file
(as it may deem convenient or proper) reports of the financial
condition, and of the receipts and disbursements, of the Trust Fund
from the Trustee;
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<PAGE> 55
(h) Designation of Agents. Appoint, employ or designate
individuals to assist in the administration of the Plan and any other
agents it deems advisable, including legal and actuarial counsel;
(i) Adjustments. Make equitable and practical adjustments
necessary to correct mistakes of fact or other errors;
(j) Interim Valuations. Direct an interim valuation as
set forth in the Plan; and
(k) Generally. Exercise other powers and duties the
Employer may delegate to it.
11.03 Decisions of Plan Administrator and Indemnification. Every
decision and action of the Plan Administrator shall be valid if concurred in by
a majority of the persons then in office, which concurrence may be had without a
formal meeting. The Plan Administrator shall keep a permanent record of its
meetings and actions. The Plan Administrator shall not be jointly or severally
liable to any person for any actions or omissions of actions in connection with
the duties of the Plan Administrator, except to the extent that the Plan
Administrator does not exercise the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. From the assets of the Trust,
the Trustee or the Employer shall indemnify the Plan Administrator against any
and all claims, losses, damages, expenses and liabilities arising from any act
of commission or omission if the act is judicially determined not to be a breach
of fiduciary responsibility by the Plan Administrator. The indemnification shall
include attorney's fees and all other costs and expenses reasonably incurred by
the Plan Administrator in defense of any action brought against said Plan
Administrator arising from such act of commission or omission.
11.04 Instructions to Trustee. The Trustee may request instructions
in writing from the Plan Administrator on other matters and may rely and act
upon them.
11.05 Claims Procedure. The Plan Administrator shall establish a
claims procedure for the benefit of Participants and their Beneficiaries which
shall:
(a) provide adequate notice in writing to any Participant
or Beneficiary whose claim for benefits under the Plan has been denied,
setting forth the specific reasons for such denial, written in a manner
calculated to be understood by the Participants, and
(b) afford any Participant or Beneficiary whose claim for
benefits has been denied a reasonable opportunity for a full and fair
review by the appropriate named fiduciary.
11.06 Delegating Responsibility. The Plan Administrator may delegate
in writing all or any part of its responsibilities under this document to the
Trustee and in the same manner, revoke any
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<PAGE> 56
such delegation of responsibility. Any action of the Trustee in the exercise of
such delegated responsibilities shall have the same force and effect for all
purposes as if such action had been taken by the Plan Administrator. The Trustee
shall have the right, in its sole discretion, by written instru ment delivered
to the Plan Administrator, to reject and to refuse to exercise any such
delegated authority.
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<PAGE> 57
ARTICLE XII - MISCELLANEOUS
12.01 Right to Terminate. This Plan shall be terminated upon the
adoption of an appropriate resolution by the Employer and the delivery of a copy
thereof to the Trustee.
12.02 Plan Voluntary on Part of Employer. It is the intention of the
Employer that this Plan shall be continued and its contributions made in each
year in accordance with the provisions of this Plan. However, this Plan is
entirely voluntary on the part of the Employer. The Employer does not guarantee
or promise to pay, or cause to be paid any of the benefits provided in this
Plan. Each Participant, retired Participant, disabled Participant, terminated
Participant, Beneficiary, or any other person who shall claim the right to any
payment or benefit under this Plan, shall be entitled only to look to the Trust
for such payment or benefit and shall not have any right, claim or demand
therefor against the Employer. The Employer specifically reserves the right, in
its sole and uncontrolled discretion to modify or suspend this Plan from time to
time in whole or in part or to terminate this Plan at any time.
12.03 Benefits Not Subject to Creditors' Claim. To the fullest
extent permitted by law, none of the benefits under the Plan are subject to the
claims of creditors of Participants, or of retired Participants, or of disabled
Participants or their Beneficiaries, and will not be subject to assignment,
alienation, attachment, garnishment or any other legal process, either
voluntarily or involuntarily. Neither a Participant, a retired Participant, a
disabled Participant nor the Participant's Beneficiaries may assign, sell,
borrow on, or otherwise encumber any of such person's beneficial interest in the
Plan and Trust Fund, nor shall any such benefits be in any manner liable for or
subject to the deeds, contracts, liabilities, engagements, or torts of any
Participant, retired Participant, disabled Participant, or Beneficiary.
The preceding sentence shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to be a
Qualified Domestic Relations Order, or any domestic relations order entered
before January 1, 1985.
12.04 Trust Agreement. The Employer has entered into a Trust
Agreement and said Trust Agreement is made a part hereof. The Trust and any
income therefrom received by the Trustee shall be received, held in trust, and
disbursed by the Trustee in accordance with written instructions from the Plan
Administrator.
12.05 Assets for Exclusive Benefits to Participants. Except as
provided in Article V, it shall not be possible (within the taxable year or
thereafter) for any part of the corpus or income to be used for purposes other
than for the exclusive benefit of the Participants or their Beneficiaries at any
time prior to the satisfaction of all liabilities with respect to Participants
and their Beneficiaries under the Trust.
52
<PAGE> 58
12.06 Nonguarantee of Employment. The Plan shall not be deemed to
constitute a contract between the Employer and Participant or to be a
consideration or inducement for the employment of any Participant or Employee.
Nothing contained in this Plan shall be deemed to give any Participant or
Employee the right to be retained in the service of the Employer or to interfere
with the right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge may have upon that Employee
or Participant as a Participant in this Plan.
12.07 Amendment. The Employer shall have the right at any time by an
instrument in writing duly executed, to modify, alter or amend this Plan in
whole or in part, provided that no such amendment shall entitle the Employer to
receive, directly or indirectly, any part of the corpus or income of the Trust,
including any forfeitures thereto. No amendment shall be made which in effect
will take away any rights accrued to any Participant up to the time of such
amendment, or eliminate an optional form of distribution.
If this Plan replaces a defined contribution plan which provided for
Early Retirement Benefits, the provisions of the prior plan relating to Early
Retirement shall govern for any Participant who was a Participant of the prior
plan and who satisfied the requirements for Early Retirement in the prior plan
as of the date of adoption of this Plan.
12.08 Acts by Trustee. The Employer shall not be responsible for any
of the acts of the Trustee.
12.09 Laws of New Jersey. The provisions of this Plan shall be
construed, administered, and enforced in accordance with the laws of New Jersey,
to the extent such laws are not superseded by Federal law.
12.10 Distribution to Minor or Incompetent Beneficiary. In making
distribution to or for the benefit of any minor or incompetent Beneficiary, the
Plan Administrator shall direct the Trustee to make such distribution to a legal
or natural guardian or other person who shall have full authority and discretion
to expend such distribution for the use and benefit of such minor or
incompetent, and the receipt of such distribution by the guardian, relative or
other person shall be a complete discharge to the Plan Administrator and the
Trustee, without any responsibility on its part to see to the application
thereof.
12.11 Construction. The masculine pronoun wherever used shall
include the feminine. Whenever words are used herein in the singular, they shall
be construed as though they were used in the plural, in any case where they
would so apply.
12.12 Merger or Consolidation. In the event of a merger,
consolidation or transfer of assets and/or liabilities to any other Plan, each
Participant shall be entitled to a benefit immediately after the merger,
consolidation, or transfer (if the Plan then terminated) which is equal to or
greater than the benefit the Participant would have been entitled to receive
immediately before such transaction if the Plan had then terminated.
53
<PAGE> 59
12.13 Discretionary Action. The Plan Administrator may exercise full
discretionary authority or discretionary control in connection with the
management of this Plan unless otherwise prohibited by validly promulgated
rules, regulations, and terms of the Internal Revenue Code or the Employee
Retirement Income and Security Act, as amended. The Plan Administrator's
discretionary power includes, but is not limited to, construing and interpreting
this Plan, construing disputed or doubtful terms, supplying omissions in
accordance with the intent of the Plan, deciding questions of eligibility for
participation, determining the amount, timing and payment of benefits under the
terms of the Plan, reviewing benefit eligibility determinations, and authorizing
the payment of benefits. Whenever the Administrator acts pursuant to the terms
of this Plan, such action will be taken in a uniform and nondiscriminatory
manner. Any construction of the Plan or Trust adopted by the Administrator in
good faith, and any discretionary action exercised by the Administrator in good
faith, shall be binding upon Employees, Participants, and Beneficiaries.
12.14 Lost Beneficiaries; Escheat. When a benefit is payable to a
terminated Participant, and when the Plan Administrator is unable to find the
Participant or the Beneficiary to whom the payment is due, the benefit shall be
forfeited and shall be treated as any other forfeiture under the Plan. Upon
termination of the Plan or in the event a claim is made by the Participant or
Beneficiary for the forfeited benefit, the Plan Administrator shall direct the
Trustee to establish a savings account in the name of the Participant in the
amount of the forfeiture. Said savings account shall be at a savings and loan
institution or other banking institution in the same geographic location as the
Trustee of the Trust and the establishment of said account shall be a complete
and full discharge of the Trustee and Plan Administrator for any liability to
the Participant for said benefit and the account shall be governed by applicable
state law including, but not by way of limitation, the appropriate rules of
escheat.
12.15 Action by the Employer. Any action by the Employer under this
Plan may be by the Board of Directors of Brown-Forman Corporation, or by any
person or persons duly authorized by such Board to take such action.
54
<PAGE> 60
ARTICLE XIII - SIGNATURES
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by
an officer duly authorized this 22nd day of December, 1994.
LENOX, INCORPORATED
By: /s/ Milton B. Gillis
-----------------------------------------
MILTON B. GILLIS, Vice-President
Senior Vice President
55
<PAGE> 61
FIRST AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The Lenox Retail Savings and Investment Plan effective July 1, 1992 was
adopted by Brown-Forman Corporation.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective October 1, 1995, Section 5.01 of Article V is
amended by adding the following provision:
Effective October 1, 1995, the Nonelective Contribution shall
be discontinued for hourly-paid Participants; provided,
however, that the Employer shall contribute to the Trust and
allocate to the CORE Accounts of those hourly paid
Participants who are employed on the last day of the Plan Year
a Nonelective Contribution equal to three percent (3%) of the
hourly paid Participant's Compensation earned through
September 30, 1995.
2. Effective October 1, 1995, Section 5.03 of Article V is
amended in its entirety as follows:
5.03 Matching Contribution by Employer. Each Plan
Year the Employer shall contribute to the Trust a Matching
Contribution on behalf of each Participant receiving an
Elective Contribution for the Plan Year. Through March 31,
1994, the amount of the Matching Contribution shall be equal
to 25% of the Participant's Compensation deferred. Effective
April 1, 1994, the amount of the Matching Contribution shall
be equal to 35% of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the remainder
of a Participant's Compensation deferred. Effective April 1,
1995, the amount of the Matching Contribution shall be equal
to 45% of the first two (2%) percent of a Participant's
Compensation deferred and 25% of the remainder of a
Participant's Compensation deferred. Effective April 1, 1996,
the amount of the Matching Contribution shall be equal to
fifty (50%) percent of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the remainder
of
1
<PAGE> 62
a Participant's Compensation deferred. However, in applying
the foregoing matching percentages, only Participant Elective
Contributions up to 15% of Compensation shall be considered
and, effective October 1, 1995, only Participant Elective
Contributions up to 10% of Compensation shall be considered.
The Matching Contribution shall be credited to the Employer
Matching Contribution Account of eligible Participants in
accordance with Section 7.03.
In all other respects, the Lenox Retail Savings and Investment Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this First Amendment to the
Lenox Retail Savings and Investment Plan to be executed by its duly authorized
officer this 25th day of September, 1995, effective as set forth herein.
LENOX, INCORPORATED
By: /s/ Milton B. Gillis
-----------------------------------------
MILTON B. GILLIS, Vice-President
2
<PAGE> 63
CORRECTIVE
FIRST AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The Lenox Retail Savings and Investment Plan effective July 1, 1992 was
adopted by Brown- Forman Corporation.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective October 1, 1995, Section 5.01 of Article V is
amended by adding the following provision:
Effective October 1, 1995, the Nonelective Contribution shall
be discontinued for hourly-paid Participants; provided,
however, that the Employer shall contribute to the Trust and
allocate to the CORE Accounts of those hourly paid
Participants who are employed on the last day of the Plan Year
a Nonelective Contribution equal to three percent (3%) of the
hourly paid Participant's Compensation earned through
September 30, 1995.
The changes set forth in the preceding paragraph shall not
apply to Employees of the Lenox Williamsport location.
2. Effective October 1, 1995, Section 5.03 of Article V is
amended in its entirety as follows:
5.03 Matching Contribution by Employer. Each Plan
Year the Employer shall contribute to the Trust a Matching
Contribution on behalf of each Participant receiving an
Elective Contribution for the Plan Year. Through March 31,
1994, the amount of the Matching Contribution shall be equal
to 25% of the Participant's Compensation deferred. Effective
April 1, 1994, the amount of the Matching Contribution shall
be equal to 35% of the first two (2%) percent of a
Participant's Compensation deferred and 25% of the remainder
of a Participant's Compensation deferred. Effective April 1,
1995, the amount of the Matching Contribution shall be equal
to 45% of the
1
<PAGE> 64
first two (2%) percent of a Participant's Compensation
deferred and 25% of the remainder of a Participant's
Compensation deferred. Effective April 1, 1996, the amount of
the Matching Contribution shall be equal to fifty (50%)
percent of the first two (2%) percent of a Participant's
Compensation deferred and 25% of the remainder of a
Participant's Compensation deferred. However, in applying the
foregoing matching percentages, only Participant Elective
Contributions up to 15% of Compensation shall be considered;
and, effective October 1, 1995, in applying the foregoing
matching percentages for all Employees except those at the
Lenox Williamsport location, only Participant Elective
Contributions up to 10% of Compensation shall be considered.
The Matching Contribution shall be credited to the Employer
Matching Contribution Account of eligible Participants in
accordance with Section 7.03.
In all other respects, the Lenox Retail Savings and Investment Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Corrective First
Amendment to the Lenox Retail Savings and Investment Plan to be executed by its
duly authorized officer this 20th day of December, 1995, effective as set forth
herein.
LENOX, INCORPORATED
By: /s/ Milton B. Gillis
-----------------------------------------
MILTON B. GILLIS, Vice-President
2
<PAGE> 65
SECOND AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The restated Lenox Retail Savings and Investment Plan was adopted by
Lenox, Incorporated effective July 1, 1992.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 5.06, Special Employer Contributions, of Article V is
amended by adding the following additional sentence to the final paragraph of
the section:
Further, the contributions shall satisfy the nondiscrimination
requirements in accordance with Regulation 1.401(k)-1(b)(5)
and Regulation 1.401(m)-1(b)(5), incorporated herein by
reference.
2. Section 5.07, Correction of Excess Elective Contributions, of
Article V is amended to delete all references to recharacterization of excess
contributions as voluntary contributions as the Plan does not allow such
voluntary contributions after December 31, 1995.
3. Section 6.01, Amount of Elective Contribution, is amended by
adding the following paragraph:
A Participant's elective contributions for his or her taxable
year under the Plan and all other plans, contracts and
arrangements of an employer will not exceed the amount of the
Section 402(g) limitation in effect for the calendar year with
or within which such taxable year begins. The Section 402(g)
limitation is the greater of $7,000.00 or the adjusted amount
determined by the Secretary of the Treasury.
4. Section 6.05, Voluntary Contributions, is amended in its
entirety to read as follows:
1
<PAGE> 66
6.05 Voluntary Contributions. For the Plan Year
beginning January 1, 1996, voluntary contributions are no
longer permitted. Any voluntary contributions made prior to
that date shall be maintained in the Participant's Voluntary
Contributions Account.
5. Section 7.05, Amendment of Allocation Eligibility, is amended
in its entirety as follows: 7.05 Amendment of Allocation Eligibility.
[Reserved.]
In all other respects, the Lenox, Incorporated Employee Savings and
Investment Plan as initially adopted and subsequently amended shall remain in
full force and effect.
IN WITNESS WHEREOF, the Employer has caused this Second Amendment to
the Lenox Retail Savings and Investment Plan to be executed by its duly
authorized officer this 11th day of July, 1996, effective July 1, 1992 unless
otherwise set forth herein.
LENOX, INCORPORATED
By: /s/ Milton B. Gillis
-----------------------------------------
MILTON B. GILLIS, Vice President
2
<PAGE> 67
THIRD AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The Lenox Retail Savings and Investment Plan effective July 1, 1992,
was adopted by Brown- Forman Corporation.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended effective
August 30, 1996, to include employees of Hartmann Luggage Company retail
merchandising outlets, excepting those employees at the plant location in
Lebanon, Tennessee.
2. Section 4.03(a)(i), Joint and Survivor Annuity, of Article IV
is amended by adding the following paragraph:
Notwithstanding the foregoing, a Joint and Survivor
Annuity will not be provided unless the Participant and Spouse
have been married the entire 1-year period ending on the
earlier of (1) the Annuity Starting Date, or (2) the
Participant's death. However, if a Participant marries within
one year before the Annuity Starting Date and such marriage
continues for at least a one year period ending on or before
the Participant's death, then the Participant and such Spouse
must be treated as having been married for one year prior to
the Annuity Starting Date, provided that the said Participant
notifies the Plan Administrator when the said Participant has
been married for one year.
3. Section 4.05, Pre-Retirement Survivor Annuity Payment Upon
Death of Participant, of Article IV is amended by adding the following
paragraph:
Notwithstanding the foregoing, a Pre-Retirement
Survivor Annuity will not be provided unless the Participant
and Spouse have
1
<PAGE> 68
been married the entire one-year period ending on the earlier
of (1) the Annuity Starting Date, or (2) the Participant's
Death.
4. Section 5.01, Nonelective Contribution of Employer, of Article
V is amended by adding the following additional paragraph, effective August 30,
1996:
The Employer shall contribute to the Trust a
Nonelective Contribution on behalf of those Participants who
are salaried Employees of Hartmann Luggage Company retail
merchandising outlets employed on the last day of the Plan
Year in an amount equal to 3% of Participant's Compensation,
provided that the nonelective contribution for the 1996 Plan
Year for those Participants who were formerly Participants in
the Lenox, Incorporated Employee Savings and Investment Plan
and/or the Lenox, Incorporated Retirement Plan and became
Participants of this Plan during the Plan Year shall be
equitably adjusted as determined by the Plan Administrator on
a uniform nondiscriminatory basis.
In all other respects, the Lenox Retail Savings and Investment Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Third Amendment to the
Lenox Retails Savings and Investment Plan to be executed by its duly authorized
officer this 13th day of March, 1997, effective January 1, 1997 unless otherwise
set forth herein.
LENOX, INCORPORATED
By: /s/ Russell C. Buzby
-----------------------------------------
RUSSELL C. BUZBY,
Senior Vice President
2
<PAGE> 69
FOURTH AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The Lenox Retail Savings and Investment Plan effective July 1, 1992,
was adopted by Brown- Forman Corporation.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Section 1.09, Employee, of Article I is amended effective
October 1, 1997, to exclude all employees of Hartmann Luggage Company.
2. Section 5.01, Nonelective Contribution of Employer, of Article
V is amended effective October 1, 1997, to delete the Nonelective Contribution
on behalf of those Participants who are salaried Employees of Hartmann Luggage
Company retail merchandising outlets, said Employees no longer being eligible to
participate in this Plan as of that date, having been transferred to the
Hartmann Luggage Company Savings and Investment Plan.
In all other respects, the Lenox Retail Savings and Investment Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Fourth Amendment to
the Lenox Retails Savings and Investment Plan to be executed by its duly
authorized officer this 8th day of September, 1997, effective October 1, 1997.
LENOX, INCORPORATED
By: /s/ Milton B. Gillis
---------------------
MILTON B. GILLIS,
Vice President
1
<PAGE> 70
FIFTH AMENDMENT
LENOX RETAIL SAVINGS AND INVESTMENT PLAN
The Lenox Retail Savings and Investment Plan was adopted by
Brown-Forman Corporation effective July 1, 1992.
The Plan provides in Article XII that the Plan may be amended by an
instrument in writing duly executed.
It is advisable to amend the Plan in certain respects.
IT IS THEREFORE AGREED:
1. Effective for Plan Years beginning on or after January 1,
1999, Article IV, Time and Manner of Payment, is amended to increase the
involuntary cashout limit from $3,500 to $5,000. The $3,500 dollar limit is
amended to read $5,000 wherever that $3,500 dollar limit appears in Article IV
of this Plan.
2. Effective October 20, 1998, Article III is amended by adding
Section 3.11 as follows:
3.11 Former Employees of Kirk Stieff Retail
Store. A Participant employed at the Kirk Stieff Retail Store
on October 20, 1998, and whose employment terminated on or
after October 20, 1998, as a direct result of the closing of
the Kirk Stieff Retail Store, is fully vested and has a
nonforfeitable right to the Participant's Account(s) under the
Plan.
3. Effective April 1, 1999, Section 4.03 of Article IV is amended
in its entirety as follows:
4.03 Manner of Payment of Retirement Benefits.
Distribution of a Participant's benefits will be made to the
Participant or Beneficiary by one of the following methods:
(a) Automatic Form of Payment of
Retirement Benefits. Unless the Participant elects otherwise
as provided below, distribution of a Participant's benefits
will be made to the Participant by one of the following
methods, as applicable:
<PAGE> 71
(i) Joint and Survivor
Annuity. A Participant who is married on the Annuity
Starting Date shall receive the value of the benefits
in the form of a Joint and Survivor Annuity. The
Joint and Survivor Annuity shall be the actuarial
equivalent of a single life annuity. Such Joint and
Survivor benefits following the Participant's death
shall continue to the Spouse during the Spouse's
lifetime at a rate equal to fifty percent (50%) of
the rate at which such benefits were payable to the
Participant.
(ii) Single Life Annuity. A
Participant who is not married on the Annuity
Starting Date shall receive benefits in the form of a
Single Life Annuity.
(b) Optional Form of Payment of
Retirement Benefits. If a Participant duly elects pursuant to
Section 4.04 to waive the Joint and Survivor Annuity or Single
Life Annuity, as applicable, distribution of a Participant's
benefits will be made to the Participant or Beneficiary by one
of the following methods, as elected by the Participant:
(i) By lump-sum payment in
cash; provided, however, that payment of all or any
portion of the Participant's account balance invested
in the Brown-Forman Stock Fund may be made in one
lump-sum payment in cash or in kind, with in kind
distribution in the form of Brown-Forman Corporation
Class B shares.
(ii) Payments may be made in
cash over a period not extending beyond the life
expectancy of the Participant or the joint life
expectancies of the Participant and the Participant's
Beneficiary.
4. Effective April 1, 1999, Section 4.05 of Article IV is amended
by deleting the second paragraph and replacing it as follows:
If a Participant's death benefit is not paid in the form of a
Pre- Retirement Survivor Annuity, the Participant's death
benefits shall be paid to the Beneficiary in a lump sum
payment in cash; provided, however, that payment of all or any
portion of the Participant's account balance invested in the
Brown-Forman Stock Fund may be made in one lump-sum payment in
cash or in kind, with in kind distribution in the form of
Brown-Forman Corporation Class B shares.
2
<PAGE> 72
5. Effective April 1, 1999, Section 7.10, Participant Direction
of Investment, of Article VII is amended by adding subsection (d) as follows:
(d) The Employer and the Trustee have
established the Brown-Forman Stock Fund, composed of employer
securities in the form of Brown-Forman Corporation Class B shares, as
an additional investment option under the Plan. A Participant may
direct the investment of his/her account balance into said Stock Fund
under the terms and conditions as agreed upon between the Trustee and
the Plan Administrator.
In all other respects, the Lenox Retail Savings and Investment Plan as
initially adopted and subsequently amended shall remain in full force and
effect.
IN WITNESS WHEREOF, the Employer has caused this Fifth Amendment to the
Lenox Retails Savings and Investment Plan to be executed by its duly authorized
officer this 25th day of February, 1999, effective as set forth herein.
LENOX, INCORPORATED
By: /s/ James D. Wilson
-----------------------------------------
James D. Wilson
OFFICER
3
<PAGE> 1
EXHIBIT 5
[Letterhead of Ogden Newell & Welch]
March 17, 1999
Brown-Forman Corporation
850 Dixie Highway
Louisville, Kentucky 40210
Re: Brown-Forman Corporation
Registration Statement on Form S-8
Dear Sirs:
We are acting as counsel for Brown-Forman Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of certain securities which are described
herein (the "Securities") which are to be issued by the Company in connection
with the following qualified retirement savings plans maintained by the Company
and/or its subsidiaries: the Brown-Forman Corporation Savings Plan, the
Brown-Forman Corporation Savings Plan for Collectively Bargained Employees, the
Fetzer Vineyards Profit Sharing Plan, the Hartmann Employee Savings and
Investment Plan, the Lenox Savings Plan for Collectively Bargained Employees,
the Lenox, Incorporated Employee Savings and Investment Plan, and the Lenox
Retail Savings and Investment Plan (the "Plans"), and pursuant to the Company's
and the Plans' Registration Statement on Form S-8 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the "Commission").
The Securities constitute (a) participatory interests in the Plans
which are deemed "securities" under section 2(a)(1) of the Securities Act of
1933 (the "Plan Interests") and (b) the shares of Class B common stock of the
Company (the "Stock") to be acquired by Plan participants through Plan
participation.
In rendering this opinion, we have examined instruments, documents, and
records which we deemed relevant and necessary for the basis of our opinion
hereinafter expressed. In such examination, we have assumed the following: (a)
the authenticity of original documents and the genuineness of all signatures;
(b) the conformity to the originals of all documents submitted to us as copies;
and (c) the truth, accuracy and completeness of the information, representations
and warranties contained in the documents.
It is our opinion that:
(a) the Plan Interests will be legally and validly issued and
non-assessable; and
<PAGE> 2
(b) the Stock to be acquired pursuant to the Plans will have been duly
authorized and, subject to the effectiveness of the Registration Statement and
compliance with applicable state securities laws, will be legally and validly
issued, fully paid and non-assessable.
Insofar as this opinion relates to securities to be issued in the
future, we have assumed that all applicable laws, rules and regulations in
effect at the time of such issuance shall be the same as such laws, rules and
regulations are in effect as of the date hereof.
It should be noted that nothing in this opinion is intended to apply to
any disposition of the Securities which any participant in the Plan may propose
to make.
This opinion is furnished to you in connection with the filing of the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose, except as expressly provided in the preceding
paragraph, without our express written consent, and no party other than you is
entitled to rely upon it. This opinion is rendered to you as of the date hereof,
and we undertake no obligation to advise you of any change, whether legal or
factual.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any filing made by the Company under
the securities or "Blue Sky" laws of any state or jurisdiction.
Very truly yours,
/s/ Ogden Newell & Welch
-----------------------------
OGDEN NEWELL & WELCH
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 of Brown-Forman Corporation, the Brown-Forman Corporation Savings Plan,
the Brown-Forman Corporation Savings Plan for Collectively Bargained Employees,
the Fetzer Vineyards Profit Sharing Plan, the Hartmann Employee Savings and
Investment Plan, the Lenox Savings Plan for Collectively Bargained Employees,
the Lenox, Incorporated Employee Savings and Investment Plan, and the Lenox
Retail Savings and Investment Plan, of our report dated May 27, 1998 relating to
our audits of the consolidated financial statements and financial statement
schedule of Brown-Forman Corporation as of April 30, 1998, 1997, and 1996, and
for the years ended April 30, 1998, 1997, and 1996, which report is included in
the Company's Annual Report on Form 10-K filed July 17, 1998.
/s/ PricewaterhouseCoopers LLP
Louisville, Kentucky
March 17, 1999
<PAGE> 1
EXHIBIT 24(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, as of the 1st day of March, 1999, the
undersigned each constitutes and appoints Steven B. Ratoff, Michael B. Crutcher,
and Nelea A. Absher, and each of them, his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities:
(a) to sign and file with the Securities and Exchange Commission one or more
Registration Statements under the Securities Act of 1933, as amended, on Form
S-8 or such other form as such attorneys-in-fact, or any of them, may deem
necessary or desirable, and any and all related amendments, exhibits, or
appendices (including post-effective amendments) in connection with the (1)
Brown-Forman Corporation Savings Plan, (2) Brown-Forman Savings Plan for
Collectively Bargained Employees, (3) Fetzer Vineyards Profit Sharing Plan, (4)
Hartmann Employee Savings and Investment Plan, (5) Lenox Savings Plan For
Collectively Bargained Employees, (6) Lenox, Incorporated Employee Savings and
Investment Plan, and (7) Lenox Retail Savings and Investment Plan (collectively,
the "Plans") and the underlying shares of Class B common stock of Brown-Forman
Corporation to be acquired pursuant to the Plans; and
(b) to prepare, execute, and file with the appropriate securities commissions in
states or other jurisdictions any forms or filings (including any amendments or
exhibits) necessary or useful in complying with state or foreign securities laws
in connection with the interests of the participants in the Plans, or the
investment fund under the Plans providing for investments in shares of
Brown-Forman Corporation Class B Common Stock, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done to
the end that such Registration Statement(s) shall comply with the Securities Act
of 1933, as amended, and the applicable rules and regulations adopted or issued
pursuant thereto, as fully and to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his or her
substitute(s), may lawfully do or cause to be done by virtue of this power of
attorney.
This power of attorney may be signed in one or more counterparts, which
counterparts together shall constitute one instrument.
BROWN-FORMAN CORPORATION
By: /s/ Owsley Brown II
-----------------------------------
Owsley Brown II
Chairman & Chief Executive Officer
<PAGE> 2
/s/ Jerry E. Abramson /s/ Barry D. Bramley
- ---------------------------- ---------------------------
Jerry E. Abramson Barry D. Bramley
Director Director
/s/ Geo. Garvin Brown III /s/ Owsley Brown II
- ---------------------------- ---------------------------
Geo. Garvin Brown III Owsley Brown II
Director Director
/s/ Donald G. Calder /s/ Owsley Brown Frazier
- ---------------------------- ---------------------------
Donald G. Calder Owsley Brown Frazier
Director Director
/s/ Richard P. Mayer /s/ Stephen E. O'Neil
- ---------------------------- ---------------------------
Richard P. Mayer Stephen E. O'Neil
Director Director
/s/ William M. Street /s/ Dace Brown Stubbs
- ---------------------------- ---------------------------
William M. Street Dace Brown Stubbs
Director Director
/s/ James S. Welch
- ----------------------------
James S. Welch
Director
<PAGE> 1
EXHIBIT 24(b)
RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS OF
BROWN-FORMAN CORPORATION ACTING BY UNANIMOUS WRITTEN CONSENT
EFFECTIVE AS OF FEBRUARY 25, 1999
WHEREAS, the Securities Act of 1933 requires the filing of a
registration statement on Form S-8 (the "Registration Statement") by
the Company and the Plans relating to the contemplated amendments to
the Plans;
NOW, THEREFORE, BE IT RESOLVED, that the appropriate officers of the
Company, with the assistance of its accountants and counsel, are hereby
authorized to prepare, execute, and file the Registration Statement
with the Securities and Exchange Commission on behalf of the Company
and the Plans; and
FURTHER RESOLVED, that Michael B. Crutcher, Senior Vice President,
General Counsel, and Secretary of the Company, be and hereby is
appointed and designated as a person duly authorized to receive
communications and notices from the Securities and Exchange Commission
with respect to any documents relating to the Registration Statement;
and
FURTHER RESOLVED, that the Company, the Plans, and each director and
officer who may be required to execute any filings or documents
relating to the Registration Statement and any amendments thereof or
appendices thereto be, and hereby is, authorized to execute a power of
attorney appointing Steven B. Ratoff, Michael B. Crutcher, and Nelea A.
Absher, and each of them, his true and lawful attorneys and agents:
(a) to execute in his name, and on behalf of the Company and the
Plans, any and all documents relating to the Plans, and to file
the same with the Securities and Exchange Commission; and
(b) to execute in his name, and on behalf of the Company and the
Plans, any and all documents relating to the Plans, and to file
the same with any state or foreign securities commissions; and
I, Nelea A. Absher, being duly elected and acting Assistant Vice President and
Assistant Secretary of Brown-Forman Corporation, do hereby certify that the
above is a true and correct copy of resolutions adopted by the Board of
Directors of said corporation, and that said resolutions are still in full force
and effect.
In testimony whereof, witness my hand this 17th day of March, 1999.
/s/ Nelea A. Absher
----------------------------------
Nelea A. Absher
Assistant Vice President
and Assistant Secretary
Brown-Forman Corporation
