EXHIBIT 4
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THE CIT GROUP, INC.
SAVINGS INCENTIVE PLAN
As Amended and Restated
Effective as of January 1, 2001
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THE CIT GROUP, INC.
SAVINGS INCENTIVE PLAN
TABLE OF CONTENTS
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Article Page
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I Purpose ............................................................. 2
II Definitions ......................................................... 3
III Participation ....................................................... 8
IV Employer Contributions .............................................. 9
V Member Contributions ................................................ 11
VI Limitations on Contributions ........................................ 12
VII Investment of Contributions and Valuation of Accounts ............... 16
VIII Distributions ....................................................... 18
IX Designation of Beneficiaries ........................................ 22
X In-Service Withdrawals .............................................. 23
XI Loans ............................................................... 25
XII Administration of the Plan .......................................... 27
XIII Termination of Employer Participation ............................... 30
XIV Amendment or Termination of the Plan and Trust ...................... 31
XV General Limitations and Provisions .................................. 33
XVI Top Heavy Provisions ................................................ 35
MEMORANDUM TO PLAN SECTIONS 2.41 AND 3.1 ............................ 38
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ARTICLE I
PURPOSE
THE CIT GROUP, INC. (the "Company") adopted The CIT Group, Inc. Savings
Incentive Plan (the "Plan"), initially effective as of April 1, 1990. The
purpose of the Plan is to provide retirement benefits to eligible employees and
their beneficiaries, all as set forth herein and in the trust adopted as a part
of this Plan.
Prior to April 1, 1990, the Company was a participating company in the
Employees' Savings Incentive Plan of Manufacturers Hanover Trust Company and
Certain Affiliated Companies (the "Prior Plan"). The Company ceased being a
participating company in the Prior Plan on March 31, 1990. Effective April 1,
1990, the Company adopted the Plan and provided for the transfer of assets and
liabilities from the Prior Plan to the Plan with respect to employees of the
Company who were members of the Prior Plan.
The Plan is intended to qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the Trust established
thereunder is intended to meet the requirements of Code Section 501(a). The Plan
contains a cash or deferred arrangement intended to meet the requirements of
Code Sections 401(k) and 401(m). The IRS has determined that the Plan and its
Trust meet the requirements for qualification and tax-exemption under Sections
401(a), 401(k), 401(m) and 501(a) of the Code. The Plan was amended and restated
effective January 1, 1994 and again effective January 1, 1999 to conform to the
requirements of the Uniformed Services Employment and Reemployment Rights Act of
1994, the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of
1997 and other applicable laws and to reflect certain administrative and
conforming amendments.
Subsequent to the purchase of Newcourt Credit Group Inc., the Plan was
amended and restated to reflect the merger of the Newcourt Credit Group Inc.
Savings and Investment Plan into The CIT Group, Inc. effective January 1, 2001.
The Plan, and its Trust, are intended to continue to qualify as a plan and trust
which meet the requirements for qualification and tax-exemption under Sections
401(a), 401(k), 401(m) and 501(a) of the Code, or any other applicable
provisions of law including, without limitation, the Employee Retirement Income
Security Act of 1974, as now in effect or hereafter amended. Accordingly,
notwithstanding the general effective date of this restatement, the following
Plan sections, as amended, shall be effective as indicated below.
Section Effective Date
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16.1 and 16.3 April 1, 1992
2.16, 2.18, 2.20, 2.21 and 8.7 January 1, 1993
8.8 August 1, 1993
2.42 and 15.9 December 12, 1994
2.14, 2.30, 2.34, 6.3, 6.4 and 8.4 January 1, 1997
8.5 and 15.4 August 5, 1997
6.5 January 1, 1998
2.21 January 1, 2000
Unless otherwise expressly provided herein, the rights of any person whose
employment terminates or who retires before the effective date of any amendment
to the Plan, including such person's eligibility for benefits and the time and
form in which benefits, if any will be paid, shall be determined solely under
the terms of the Plan in effect on the date of such person's termination of
employment or retirement, unless otherwise required by law, or unless such
person is thereafter re-employed and again becomes a Member.
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ARTICLE II
DEFINITIONS
When used herein the following terms shall have the following meanings:
2.1 "Account" means the account established and maintained on behalf of a
Member pursuant to Plan Section 3.2, including, as applicable, his Basic Savings
Contribution Account, Matching Contribution Account, Flexible Retirement
Contribution Account, Voluntary Contribution Account, Prior Plan Account, Prior
Plan Employer Account, Prior Plan Profit Sharing Contribution Account and
Rollover Contribution Account.
2.2 "Account Balance" means, as of any Valuation Date, the proportionate
interest of the Member's Account in the Trust Fund and any Investment Fund or
Funds.
2.3 "Affiliate" means any corporation which is included in a controlled
group of corporations (within the meaning of Code Section 414(b)) which includes
the Company, any trade or business (whether or not incorporated) which is under
common control with the Company (within the meaning of Code Section 414(c)), any
organization included in the same affiliated service group (within the meaning
of Code Section 414(m)) as the Company, and any other entity required to be
aggregated with the Company pursuant to the Regulations under Code Section
414(o); except that, for purposes of applying the provisions of Plan Section 6.5
and Article XV with respect to the limitations on contributions, Code Section
415(h) shall apply.
2.4 "Base Salary" means a Member's base salary or wages paid or payable by
the Employer while a Member of the Plan.
2.5 "Basic Savings Contributions" mean those contributions made on behalf
of a Member by the Employer pursuant to Plan Section 5.1 in accordance with the
Member's Compensation Reduction Agreement.
2.6 "Basic Savings Contribution Account" means that portion of a Member's
Account to which Basic Savings Contributions made pursuant to Plan Section 5.1
or previously contributed on the Member's behalf under the Prior Plan or
Newcourt Plan (including Matched Pre-Tax, Unmatched Pre-Tax and Eaton Pre-Tax
Contributions) and investment earnings and losses thereon are credited.
2.7 "Beneficiary" means any person or entity validly designated by a
Member pursuant to Article IX to receive the amount, if any, payable under the
Plan upon the Member's death.
2.8 "Board" means the Board of Directors of the Company or a duly
authorized committee thereof.
2.9 "Break in Service" means a 12 consecutive month period, beginning on
an Employee's Severance Date and any ending on the next succeeding anniversary
of such date, during which he does not perform an Hour of Service for the
Employer or any Affiliate; provided, however, that an Employee who is absent on
a maternity or paternity absence or an authorized absence pursuant to the Family
& Medical Leave Act of 1993 (the "FMLA"), as determined by the Committee in
accordance with this Plan Section 2.9 and the Code and Regulations, shall not
incur a Break in Service until the second anniversary of the first day of such
absence. For purposes of this Plan Section 2.9, a maternity or paternity absence
means an absence from work by reason of the Employee's pregnancy, the birth of
the Employee's child or the placement of a child with the Employee in connection
with the adoption of the child by such Employee, or for purposes of caring for a
child for the period immediately following such birth or placement.
2.10 "Code" means the Internal Revenue Code of 1986, as now in effect or
as hereafter amended. All citations to sections of the Code are to such sections
as they may from time to time be amended or renumbered.
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2.11 "Committee" means the Employee Benefit Plans Committee provided for
in Article XII. For purposes of ERISA, the members of the Committee shall be the
named fiduciaries of the Plan (with respect to the matters for which they are
hereby made responsible under the Plan) and the Committee shall be the
administrator of the Plan.
2.12 "Company" means The CIT Group, Inc., or any successor thereto.
2.13 "Company Stock" means common shares of The CIT Group, Inc.
2.14 "Compensation" means for each Plan Year a Member's Base Salary plus
certain annual bonuses, certain annual sales incentives and commissions,
including the amount of the Basic Savings Contributions made on his behalf for
such Plan Year, and any salary reduction contributions made pursuant to Code
Section 125, but excluding overtime pay, reimbursement of expenses, directors'
fees, severance pay, deferred compensation and any amount in excess of $170,000
(adjusted for cost-of-living in accordance with Code Section 401(a)(17)).
2.15 "Compensation Reduction Agreement" means an agreement between a
Member and the Employer, in the form prescribed by the Committee, pursuant to
which the Member elects to reduce his Compensation and the Employer agrees to
contribute such amount to the Plan on the Member's behalf as a Basic Savings
Contribution. The initial election shall be effective for payroll periods
commencing as soon as practicable on and after the date authorization is made
and the date on which participation begins and shall remain effective until
canceled or amended.
2.16 "Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
2.17 "Disability" means a Member's inability to perform his customary
duties with the Employer as would constitute disability for receiving disability
benefits under the Employer's Long-Term Disability Plan, as determined by the
Committee in accordance with procedures uniformly applicable to all Members.
2.18 "Distributee" means an Employee or former Employee. In addition, the
Employee's or former Employee's Surviving Spouse and the Employee's or former
Employee's Spouse or former Spouse who is the alternate payee under a qualified
domestic relations order are Distributees with regard to the interest of the
Spouse or former Spouse.
2.19 "Effective Date" of this amended and restated Plan means January 1,
2001.
2.20 "Eligible Retirement Plan" means an individual retirement account
described in Code Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section 403(a) or a
qualified trust described in Code Section 401(a), that accepts the Distributee's
Eligible Rollover Distribution. However, in the case of an Eligible Rollover
Distribution to the Surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
2.21 "Eligible Rollover Distribution" means 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: (i) 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; (ii) any
distribution to the extent such distribution is required under Code Section
401(a)(9); (iii) the portion of any distribution that is not includible in gross
income of the Distributee and (iv) after December 31, 1999, any hardship
distribution from a plan described in Code Section 401(k).
2.22 "Eligible Termination" means an Employee's involuntary termination of
employment with an Employer or an Affiliate due to (i) the permanent and
complete closing of a location, (ii) a reduction in force, (iii) corporate
down-sizing or (iv) a job elimination, but does not include the transfer of an
Employee's employment to any Affiliate. An Employee's termination of employment
with an Employer or an Affiliate for any reason not specifically stated in the
previous sentence, including, but not limited to, resignation, Retirement,
termination during an early retirement window, discharge for cause, death,
Disability or failure to return from an
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approved leave of absence (including leaves of absence for medical reasons),
shall not constitute an Eligible Termination. An Eligible Termination also shall
not include an Employee's termination of employment with an Employer or an
Affiliate as a result of a court decree, sale (whether, in whole or in part, of
stock or assets), merger or other combination, spinoff, reorganization or
liquidation, dissolution or other winding up involving any Employer or
Affiliate.
2.23 "Employee" means any salaried employee of the Employer, excluding any
individual who (i) is a nonresident alien, (ii) is included in a unit of
employees covered by a collective bargaining agreement which does not provide
for his participation in the Plan, (iii) is employed on a temporary or hourly
basis, (iv) is a Leased Employee, (v) is an employee of an Affiliate which is
not an Employer, (vi) serves only as a director of the Board or (vii) renders
service as an independent contractor or an employee of an independent
contractor.
2.24 "Employer" means the Company or any Affiliate which, with the consent
of the Board, adopts the Plan and Trust by appropriate action and makes
participation under the Plan available to its Employees in the manner and to the
extent permitted by the Board. Any Employer which adopts the Plan shall be
deemed thereby to appoint the Company, the Committee and the Trustee its
exclusive agents to exercise on its behalf all of the power and authority
conferred by the Plan or by the Trust, and shall make its allocable
contributions to the Plan. The authority of the Company, the Committee and the
Trustee to act as such agents shall continue until the Plan is terminated as to
such Employer and the relevant Trust assets have been distributed by the Trustee
as provided in Article XIV.
2.25 "Employment Commencement Date" means the date on which an individual
first performs an Hour of Service for the Employer or any Affiliate.
2.26 "ERISA" means the Employee Retirement Income Security Act of 1974, as
now in effect or as hereafter amended.
2.27 "Flexible Retirement Contributions" mean those contributions made on
behalf of a Member by the Employer pursuant to Plan Section 4.2.
2.28 "Flexible Retirement Contribution Account" means that portion of a
Member's Account to which Flexible Retirement Contributions, made pursuant to
Plan Section 4.2 or previously contributed on a Member's behalf under the Prior
Plan and investment earnings and losses thereon are credited.
2.29 "Former Member" means (i) a Member who has terminated his employment,
whether or not he has received a distribution of his Account Balance, (ii) a
Member who has incurred a Disability and who has qualified for and is receiving
benefits under the Employer's Long-Term Disability Plan, whether or not the
Member has received a distribution of his Account Balance, or (iii) an
"alternate payee" within the meaning of Code Section 414(p)(8) under a
"qualified domestic relations order" within the meaning of Code Section
414(p)(1).
2.30 "Highly Compensated Employee" means an Employee who during the
relevant period is a "highly compensated employee" as defined in Code Section
414(q) and includes an Employee who for the preceding Plan Year, had
compensation as defined in Code Section 415(c)(3) in excess of $85,000 (or such
other amount authorized by the Secretary of the Treasury) and was in the
top-paid group for such preceding year.
2.31 "Hour of Service" means each hour for which an individual is directly
or indirectly paid or entitled to payment by the Employer or any Affiliate for
the performance of service (or is treated as performing service under Plan
Section 2.41) including any back pay, irrespective of mitigation of any damages.
2.32 "Investment Fund" means each segregated, commingled fund as may be
established and maintained for the investment of Plan assets in accordance with
Plan Section 7.2.
2.33 "IRS" means the United States Internal Revenue Service.
2.34 "Leased Employee" means any person (other than an employee of an
Employer) who, pursuant to an agreement between the Employer and any other
person (the "leasing organization"), has performed services for the Employer (or
for the Employer and any Affiliate) on a substantially full-time basis for
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a period of at least one year, and performs services under the primary direction
or control of the Employer. Contributions or benefits provided to a Leased
Employee by the leasing organization which are attributable to services
performed for the Employer shall be treated as if provided by the Employer.
2.35 "Matching Contributions" means those contributions made by the
Employer on behalf of a Member pursuant to Plan Section 4.1.
2.36 "Matching Contribution Account" means that portion of a Member's
Account to which Matching Contributions, made pursuant to Plan Section 4.1 or
previously contributed on a Member's behalf under the Prior Plan or Newcourt
Plan, and investment earnings and losses thereon are credited.
2.37 "Member" means any Employee who participates in the Plan as provided
in Article III.
2.38 "Newcourt Plan" means the Newcourt Credit Group Inc. Savings and
Investment Plan.
2.39 "Non-Highly Compensated Employee" means an Employee who is not a
Highly Compensated Employee.
2.40 "Normal Retirement Date" means the Member's 65th birthday.
2.41 "Period of Service" means the period of an individual's employment
(whether or not as an Employee) with the Employer or any Affiliate beginning on
his Employment Commencement Date and ending on his Severance Date (calculated in
complete years and fractions thereof). All Periods of Service, whether or not
successive, shall be aggregated and shall include the period of service credited
to a Member under the Prior Plan on March 31, 1990. To the extent and for the
purposes determined by the Committee, under rules uniformly applicable to all
Employees similarly situated and in accordance with the Regulations (including
Department of Labor Regulations Sections 2530.200b-2(b) and (c) and FMLA
Regulations Sections 825.214 through 825.216), Periods of Service shall include
(i) periods of vacation, (ii) periods of absence authorized by the Employer
pursuant to the FMLA or for sickness, temporary disability or personal reasons
and (iii) qualified military service as required under Code Section 414(u). If a
Member without any Vested interest in his Matching Contribution Account and his
Flexible Retirement Contribution Account incurs a Break in Service, his Period
of Service prior to his Break in Service shall not be counted if the number of
his consecutive one-year Breaks in Service equals or exceeds the greater of 5 or
the number of years of his Period of Service prior to such Break in Service
(excluding any portion of his Period of Service previously disregarded under the
Break in Service provisions of the Plan). If a Member who is at least partially
vested incurs a Break in Service, his Period of Service prior to his Break in
Service shall not be counted until he has completed a one-year Period of Service
subsequent to his Break in Service.
2.42 "Plan" means The CIT Group, Inc. Savings Incentive Plan, as the same
may be amended from time to time.
2.43 "Plan Year" means the calendar year.
2.44 "Prior Plan" means the Employees' Savings Incentive Plan of
Manufacturers Hanover Trust Company and Certain Affiliated Companies, as in
effect on March 31, 1990.
2.45 "Prior Plan Account" means that portion of a Member's Account to
which deferred allocations, forfeiture allocations, performance incentive plan
allocations and optional allocations made on the Member's behalf under the Prior
Plan or Newcourt Plan (including the Newcourt Stock Bonus Account, Newcourt
Matching Account, Newcourt Snap-On Matching Account, Newcourt Prior Plan
Matching Account and the Newcourt PP & GF Prior Matching Account) and investment
earnings and losses thereon are credited.
2.46 "Prior Plan Employer Account" means that portion of a Member's
Account to which allocations were made on the Member's behalf under the Newcourt
Plan (including a Member's Uniform Points Contribution Account, Eaton Employer
Account and Newcourt Prior Plan Account) and investment earnings and losses
thereon which shall at all times be 100% vested and which shall at all times be
subject to a qualified joint and survivor annuity.
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2.47 "Prior Plan Profit Sharing Contribution Account" means a Member's
Profit Sharing Contribution Account under the Newcourt Plan and investment
earnings and losses thereon which shall at all times be 100% vested.
2.48 "Reemployment Commencement Date" means the date on which an
individual performs an Hour of Service for the Employer or any Affiliate after
terminating his employment.
2.49 "Regulations" means the applicable regulations issued under the Code,
ERISA or other applicable law, by the IRS, the Department of Labor or any other
governmental authority.
2.50 "Retirement" means a Member's termination of employment on or after
his Normal Retirement Date or, if applicable, the Member's retirement on an
early retirement date under the Retirement Plan.
2.51 "Retirement Plan" means The CIT Group, Inc. Retirement Plan.
2.52 "Rollover Contributions" mean those contributions made by an Employee
or a Member pursuant to Plan Section 5.4.
2.53 "Rollover Contribution Account" means that portion of a Member's
Account to which Rollover Contributions made pursuant to Plan Section 5.4 or
previously contributed by the Member under the Prior Plan or Newcourt Plan and
investment earnings and losses thereon are credited.
2.54 "Severance Date" means the earlier of (i) the date an Employee
terminates his employment by reason of his resignation, discharge, Retirement or
death or (ii) the first anniversary of an Employee's absence (with or without
pay) for any other reason; provided, however, that an Employee's Severance Date
shall be disregarded if his Reemployment Commencement Date occurs no later than
12 months after the earlier of (i) the date he terminated his employment by
reason of his discharge, resignation or Retirement or (ii) the inception of his
absence for any other reason, if during his period of absence, he resigns,
retires, is discharged or dies.
2.55 "Spouse" or "Surviving Spouse" means the individual to whom a Member
or Former Member is legally married (as determined by the Committee) on the
earlier of (i) the date of the Member's death or (ii) the date benefit payments
commence under the Plan.
2.56 "Trust" or "Trust Fund" means the trust established by the Company as
part of the Plan.
2.57 "Trust Agreement" means the agreement entered into between the
Company and the Trustee to carry out the purposes of the Plan, as the same may
be amended from time to time.
2.58 "Trustee" means the trustee or trustees of the Trust.
2.59 "Valuation Date" means the last day of each month and such additional
or other date or dates as the Committee may determine from time to time.
2.60 "Vested" means the nonforfeitable portion of a Member's Account
determined pursuant to Plan Sections 4.5 and 5.7.
2.61 "Voluntary Contributions" means those contributions made by a Member
pursuant to Plan Section 5.2.
2.62 "Voluntary Contribution Account" means that portion of a Member's
Account to which Voluntary Contributions made pursuant to Plan Section 5.2 or
previously contributed by a Member under the Prior Plan or the Newcourt Plan
(including a Member's Matched After-Tax Account, Unmatched After-Tax Account and
Eaton After-Tax Account) and investment earnings and losses thereon are
credited. If applicable, a Pre-1987 Voluntary Contribution Subaccount and a
Pre-1987 Voluntary Contribution Earnings Subaccount shall be maintained under a
Member's Voluntary Contribution Account.
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ARTICLE III
PARTICIPATION
3.1 Eligibility To Participate.
(a) Each Employee who was a Member of the Plan on December 31, 2000
shall continue to be a Member. Each other Employee shall become a Member of the
Plan immediately upon his Employment Commencement Date and, subject to Section
3.1(b) below, shall automatically have his Compensation reduced in accordance
with Section 5.1 and such amount shall be contributed to the Member's Basic
Savings Contribution Account as an elective deferral on the Member's behalf.
(b) An Employee who is eligible to participate in the Plan in
accordance with (a) above may elect not to participate in the Plan. The election
not to participate must be communicated to the Company at least thirty (30) days
after the Employment Commencement Date in a manner prescribed by the Committee.
(c) If a Member who incurs a Severance Date but does not incur a
Break in Service again becomes an Employee, he shall resume participation in the
Plan as of his Severance Date. If a Member who incurs a Break in Service again
becomes an Employee, he shall resume participation in the Plan on his
Reemployment Commencement Date.
3.2 Establishment of Accounts.
(a) The Committee shall establish and maintain or cause to be
established and maintained in respect of each Member an Account showing his
interest under the Plan and in the Trust Fund (including separate accounts
showing his respective interests, if any, in each of the Investment Funds) with
respect to (i) amounts transferred from the Prior Plan which are credited to his
Account and (ii) Matching Contributions, Basic Savings Contributions, Flexible
Retirement Contributions, Voluntary Contributions and Rollover Contributions
credited to his Account, and all other relevant data pertaining thereto. Each
Member shall be furnished with a written statement of his Account and the value
of each such separate interest at least quarterly and upon any distribution to
him. In maintaining the Accounts under the Plan or causing them to be
maintained, the Committee may conclusively rely on the valuations of the Trust
Fund in accordance with the Plan and the terms of the Trust.
(b) The establishment and maintenance of, or allocations and credits
to, the Account of any Member shall not vest in any Member any right, title or
interest in and to any Plan assets or benefits except at the time or times and
upon the terms and conditions and to the extent expressly set forth in the Plan
and in accordance with the terms of the Trust.
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ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 Matching Contributions. A Member shall be immediately eligible for
Matching Contributions. Subject to Article VI, the Employer shall contribute to
the Plan for each payroll period during the Plan Year on behalf of each Member
an amount equal to 100% of the Basic Savings Contributions which were made on
behalf of each such Member for such payroll period, up to a maximum of 5% of the
Member's Compensation for the Plan Year. Matching Contributions will not be made
on behalf of a Member if such Member does not elect to make Basic Savings
Contributions.
4.2 Flexible Retirement Contributions. Subject to Article VI, the Employer
shall contribute to the Plan on behalf of each Member who was hired before
November 1, 1999, participated in the Retirement Plan as of October 31, 2000 and
elected not to participate in the Retirement Plan cash balance program, an
amount equal to a maximum of 3% of each such Member's Base Salary for such Plan
Year provided that the Member (i) is employed on the last day of the Plan Year,
(ii) incurs a Severance Date prior to the last day of the Plan Year on account
of death, Disability or Retirement or (iii) terminated employment with an
Employer prior to the last day of the Plan Year but continued employment with an
Affiliate. The allocation of Flexible Retirement Contributions shall be made as
of the last day of the Plan Year to the Flexible Retirement Contribution Account
of each eligible Member. A Member may invest his Flexible Retirement
Contribution Account earned through December 31, 2000 or contributions made
after January 1, 2001, if applicable, in any of the CIT Savings Plan Core Funds.
4.3 Payment of Contributions.
(a) The Employer shall make payment of its Matching Contributions
for each payroll period directly to the Trustee as soon as practicable after the
close of the month in which such payroll period ends but in no event later than
the time required under applicable Department of Labor Regulations.
(b) The Employer shall make payment of its Flexible Retirement
Contributions directly to the Trustee with respect to any Plan Year on or before
the last date prescribed by law for the filing of its federal income tax return,
including any extension of time for such filing, for the fiscal year which ends
within or concurrently with the Plan Year for which such Flexible Retirement
Contributions were made.
(c) Neither the Trustee nor the Committee shall be under any duty to
inquire into the correctness of the amounts contributed and paid over to the
Trustee hereunder, nor shall the Trustee or the Committee be under any duty to
enforce payment of any contributions to be made hereunder by any Employer.
4.4 Vesting.
(a) At all times a Member shall be 100% Vested in amounts credited
to his Prior Plan Account, Prior Plan Employer Account and Prior Plan Profit
Sharing Contribution Account.
(b) Amounts credited to a Member's Matching Contribution Account
shall vest in accordance with the following:
Period of Service Nonforfeitable Interest
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Less than 2 years 0%
2 but less than 3 years 25%
3 but less than 4 years 50%
4 but less than 5 years 75%
5 or more years 100%
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(c) Amounts credited to a Member's Flexible Retirement Contribution
Account shall vest in accordance with the following:
Period of Service Nonforfeitable Interest
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Less than 5 years 0%
5 or more years 100%
(d) Notwithstanding the foregoing, in the event a Member (or Former
Member whose employment is transferred to an Affiliate) incurs an Eligible
Termination, amounts credited to such Member's Matching Contribution Account and
Flexible Retirement Contribution Account shall vest in accordance with the
following, unless more rapidly Vested under (a) and (b) above:
Period of Service Nonforfeitable Interest
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Less than 4 years 0%
4 or more years 100%
(e) Notwithstanding the foregoing, a Member whose Employment
Commencement Date was on or before December 31, 1985 shall be 100% Vested in
amounts credited to his Matching Contribution Account and Flexible Retirement
Contribution Account on January 1, 1994.
(f) Notwithstanding the foregoing, a Member shall be 100% Vested in
the value of his Matching Contribution Account and Flexible Retirement
Contribution Account upon attaining his Normal Retirement Date or upon his
Retirement, death or Disability.
4.5 Forfeitures.
(a) If a Member's Severance Date occurs before he is 100% Vested in
his Matching Contribution Account and Flexible Retirement Contribution Account,
the non-Vested portion of his Account shall be forfeited as of the date he
incurs a Break in Service. If such a Member again becomes an Employee and had
received a distribution of his Vested Account Balance, any amount forfeited
shall be recredited to his Account only if he repays to the Plan the full amount
of the distribution attributable to his Matching Contributions and Flexible
Retirement Contributions (whichever may be applicable) before the earlier of (i)
the 5th anniversary of the date of his reemployment or (ii) the date he incurs
five (5) consecutive one year Breaks in Service following the date of
distribution; provided, however, that if such Member had not received a
distribution of his Vested Account Balance, any amount forfeited shall be
immediately recredited to his Account as of his Employment Commencement Date.
(b) Any amounts forfeited in accordance with the foregoing shall
first be applied to recredit previously forfeited amounts to the Accounts of
Members. As permitted by applicable law, any forfeited amounts remaining, may,
in the sole discretion of the Committee, be applied to reduce the amount of
contributions made by the Employer, to offset Plan expenses or in any other
manner which the Committee, in its discretion, deems appropriate and in the best
interests of the Plan.
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ARTICLE V
MEMBER CONTRIBUTIONS
5.1 Basic Savings Contributions. Subject to Article VI, and in accordance
with procedures established by the Committee, a Member shall contribute 2% of
his Compensation unless he waives such contributions in a manner designated by
the Committee. Subject to Plan Section 5.2 and Article VI, a Member may
authorize additional Basic Savings Contributions in a manner prescribed by the
Committee, in any whole percentage up to 16% of his Compensation.
5.2 Voluntary Contributions.
(a) Subject to Article VI, and in accordance with procedures
established by the Committee, a Member may elect to make Voluntary Contributions
to the Plan by payroll deduction, in a manner prescribed by the Committee, in an
amount up to 16% of his Compensation for the Plan Year in any whole percentage;
provided, however, in no event may the sum of a Member's Basic Savings
Contributions and Voluntary Contributions exceed a total of 16%.
(b) Subject to Article VI, a Member may also make Voluntary
Contributions by direct cash payment in an amount not less than $400, provided
the aggregate amount of a Member's Voluntary Contributions made by payroll
deduction and/or cash payment does not exceed 16% of the Member's Compensation
for the Plan Year.
5.3 Changes To Basic Savings and/or Voluntary Contributions. Subject to
Article VI, and in accordance with procedures established by the Committee, a
Member may increase or decrease his Basic Savings Contribution or Voluntary
Contribution rate or suspend such contributions entirely.
5.4 Rollover Contributions. In accordance with uniform and
nondiscriminatory procedures applicable to all Employees, an Employee (whether
or not a Member) may make a Rollover Contribution of cash, or such other
property as the Committee may specifically approve in advance, of the taxable
portion of a "qualifying rollover distribution" which the Employee received from
another qualified plan and which is contributed to the Plan in compliance with
the requirements for the Employee's making a federal income tax-free "rollover"
under the Code. The Committee shall obtain such evidence, assurances, opinions
and certifications as it deems necessary to establish to its satisfaction that
the amounts to be contributed constitute a qualifying rollover distribution and
will not affect the qualification of the Plan or the tax-exempt status of the
Trust under Code Sections 401(a) and 501(a). Any Rollover Contribution which is
found by the IRS as not being qualified for tax-free rollover treatment shall be
returned to the Member. Any expense incident to or liability incurred by the
Plan or any fiduciary of the Plan because of transfer of such disqualified
assets to the Trustee shall be borne solely by and charged to the individual who
requested the rollover. Such Rollover Contributions shall be credited to the
Rollover Contribution Account which is established and maintained as part of the
Member's Account pursuant to Plan Section 3.2.
5.5 Plan to Plan Transfers. The Committee, in accordance with uniform and
nondiscriminatory procedures applicable to all Employees, may direct the Trustee
to accept a contribution transferred directly to the Trust from the trustee of
another trust qualified under Code Section 401(a) and exempt from tax under Code
Section 501(a) on behalf of an Employee (whether or not otherwise a Member) who
participated in that trust. Prior to the acceptance of such a contribution, the
Committee shall obtain such evidence, assurances, opinions and certifications it
may deem necessary to establish to its satisfaction that the amount to be
contributed will not affect the qualification of the Plan or the tax-exempt
status of the Trust under Code Sections 401(a) and 501(a).
5.6 Payment of Member Contributions. The Committee shall deliver all Basic
Savings Contributions and Voluntary Contributions made by or on behalf of a
Member to the Trustee as soon as practicable during the month in which the
contribution is made, or during the month next following, but in no event later
than the time required under applicable Labor Department Regulations, to be
commingled, managed, invested and reinvested with the other assets of the Plan.
5.7 Vesting of Member Contributions. At all times, a Member shall be 100%
Vested in the value of his Basic Savings Contribution Account, Voluntary
Contribution Account, and Rollover Contribution Account.
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ARTICLE VI
LIMITATIONS ON CONTRIBUTIONS
6.1 Maximum Employer Contributions. In no event shall contributions made
by an Employer in any Plan Year, including for this purpose Basic Savings
Contributions, exceed the amount deductible by the Employer under Code Section
404(a) for such year for federal income tax purposes, subject, however, to any
top-heavy contributions required under Article XVI.
6.2 Maximum Basic Savings Contributions.
(a) Subject to the following provisions of this Article VI, Basic
Savings Contributions made on behalf of a Member in any Plan Year shall not
exceed the dollar limitation under Code Section 402(g) in effect at the
beginning of such Plan Year. In the event that in any Plan Year the aggregate
amount of Basic Savings Contributions made on behalf of a Member exceeds this
limitation, the amount of such excess deferrals ("Excess Deferrals"), increased
by any income and decreased by any losses attributable thereto up to the date of
distribution, shall be refunded to the Member no later than April 15 of the
calendar year following the calendar year for which the Basic Savings
Contributions were made. Excess Deferrals which are not returned to a Member by
April 15 shall be treated as Annual Additions for purposes of Plan Section 6.5.
(b) If a Member also participates, in any Plan Year, in any other
plan or plans maintained by the Employer or any Affiliate which are subject to
the limitations set forth in Code Section 402(g), and has made Excess Deferrals
under this Plan when combined with any other plan or plans subject to such
limits, the amount of such Excess Deferrals, increased by any income and
decreased by any losses attributable thereto up to the date of distribution,
shall be refunded to the Member no later than April 15 of the calendar year
following the calendar year for which such Excess Deferrals were made.
6.3 Actual Deferral Percentage Test.
(a) Notwithstanding any other provision of the Plan to the contrary,
the Actual Deferral Percentage (the "ADP") for the Plan Year for Highly
Compensated Employees who are eligible to participate in the Plan shall not
exceed the greater of (i) the ADP for such Plan Year of Non-Highly Compensated
Employees who are eligible to participate in the Plan multiplied by 1.25, or
(ii) the ADP for the Plan Year of Non-Highly Compensated Employees who are
eligible to participate in the Plan multiplied by 2.0, provided that the ADP for
Highly Compensated Employees does not exceed the ADP of the Non-Highly
Compensated Employees by more than 2%.
(b) The "ADP" for a Plan Year means, for each specified group of
Employees, the average of the actual deferral ratios (the "ADRs") (calculated
separately for each Employee in such group) of Basic Savings Contributions
credited to the Member's Account for the Plan Year to the amount of each
Member's compensation for such Plan Year. For purposes of this Plan Section 6.3,
"compensation" means compensation as defined in Code Section 414(s) and the
Regulations thereunder. An Employee's ADR shall be zero if no Basic Savings
Contributions are made on his behalf for such Plan Year. In calculating the ADP
Test for a Plan Year, Basic Savings Contributions shall be taken into account
only if they are allocated to a Member's Account within such Plan Year. For this
purpose, Basic Savings Contributions are considered allocated as of a date
within a Plan Year if the allocation is not contingent on participation or the
performance of services after such date, and the Basic Savings Contribution is
actually paid to the Trust no later than 12 months after the Plan Year to which
the Basic Savings Contributions relate.
(c) The Committee shall determine as of the end of each Plan Year,
and at such other time or times as it shall decide in its discretion, whether
the ADP Test is satisfied for such Plan Year and shall maintain records
sufficient to demonstrate satisfaction of the ADP Test. This determination shall
be made after first determining the amount, if any, of Excess Deferrals as
provided in Plan Section 6.2. In the event the ADP Test is not satisfied, the
Committee shall refund the Excess Contributions in the manner described in (f)
below. For purposes of this Plan Section 6.3, "Excess Contributions" mean, with
respect to any Plan Year and with respect to any Member, the excess of the
amount of Basic Savings Contributions (and any income and losses allocable
thereto) credited to the Accounts of Highly Compensated Employees for such Plan
Year, over the
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maximum amount of Basic Savings Contributions that could be made on behalf of
Highly Compensated Employees without violating the requirements of the ADP Test.
The amount of income and losses allocable to Excess Contributions includes both
income and losses for the Plan Year for which the Excess Contributions were made
and income and losses allocable for the period between the end of such Plan Year
and the date of distribution of such Excess Contributions. Excess Contributions
shall be treated as Annual Additions for purposes of Plan Section 6.5.
(d) The amount of Excess Contributions for a Highly Compensated
Employee will be determined pursuant to Code Section 401(k)(8) in the following
manner. First the ADR of the Highly Compensated Employee with the highest ADR
shall be reduced to the extent necessary to satisfy the ADP Test or cause the
ADR to equal the ADR of the Highly Compensated Employee with the next highest
ADR. This procedure shall be repeated until the ADP Test is satisfied. The
amount of Excess Contributions for a Highly Compensated Employee is then equal
to the total amount of Basic Savings Contributions taken into account for the
ADP Test minus the product of the Highly Compensated Employee's ADR and the
Highly Compensated Employee's compensation. The amount of Excess Contributions
to be refunded shall be reduced by the amount of Excess Deferrals previously
distributed for the taxable year ending in the same Plan Year, and Excess
Deferrals to be distributed for a taxable year shall be reduced by Excess
Contributions previously refunded for the Plan Year beginning in such taxable
year.
(e) For purposes of determining whether the Plan satisfies the ADP
Test, all elective contributions that are made under two or more plans that are
aggregated for purposes of Code Sections 401(a)(4) or 410(b) (other than Code
Section 410(b)(2)(A)(ii)) shall be treated as made under a single plan and, if
two or more plans are permissively aggregated for purposes of Code Section
401(k), the aggregated plans must also satisfy Code Sections 401(a)(4) and
410(b) as though they were a single plan; provided, however, that plans may be
aggregated to satisfy the ADP Test only if they have the same plan year. In
calculating the ADP, a Highly Compensated Employee's ADR shall be determined by
treating all cash or deferred arrangements of the Company or any Affiliate under
which the Highly Compensated Employee is eligible to participate (other than
those that may not be permissively aggregated) as a single arrangement.
(f) If required under (c) above, the Committee shall refund Excess
Contributions for a Plan Year to the Member. The distribution of such Excess
Contributions shall be made to Highly Compensated Employees to the extent
practicable before the 15th day of the third month immediately following the
Plan Year for which such Excess Contributions were made, but in no event later
than the last day of the Plan Year following such Plan Year. Any such
distribution shall be made first to the Highly Compensated Employee with the
largest dollar amount of Basic Savings Contributions.
(g) For purposes of this Plan Section 6.3, the Plan shall use the
prior year testing method. Notwithstanding the foregoing, the Company may elect
to use the current year testing method rather than the prior year provided that
such election must be evidenced by a Plan amendment and once made may not be
changed except as provided by the Secretary of the Treasury.
6.4 Average Contribution Percentage Test.
(a) Notwithstanding any other provision of the Plan to the contrary,
the Average Contribution Percentage (the "ACP") for the Plan Year for Highly
Compensated Employees who are eligible to participate in the Plan shall not
exceed the greater of (i) the ACP for such Plan Year of Non-Highly Compensated
Employees who are eligible to participate in the Plan multiplied by 1.25, or
(ii) the ACP for the Plan Year of Non-Highly Compensated Employees who are
eligible to participate in the Plan multiplied by 2.0, provided that the ACP for
Highly Compensated Employees does not exceed the ACP for Non-Highly Compensated
Employees by more than 2%.
(b) The "ACP" for a Plan Year means, for each specified group of
Employees, the average of the actual contribution ratios (the "ACRs")
(calculated separately for each Employee in such group) of Matching
Contributions and Voluntary Contributions credited to the Member's Account for
the Plan Year to the amount of his compensation for the Plan Year. For purposes
of this Plan Section 6.4, "compensation" means compensation as defined in Code
Section 414(s) and the Regulations thereunder. An Employee's ACR shall be zero
if no Voluntary Contributions or Matching Contributions are made on his behalf
for such Plan Year. In
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calculating the ACP Test for a Plan Year, Voluntary Contributions shall be taken
into account if paid to the Trust during the Plan Year or paid to an agent of
the Plan and transmitted to the Trust within a reasonable period after the end
of the Plan Year. Matching Contributions shall be taken into account for a Plan
Year only if such contributions are made on account of the Member's Basic
Savings Contributions for the Plan Year, allocated to the Member's Account as of
a date within that Plan Year and paid to the Trust by the end of the 12th month
following the close of that Plan Year.
(c) For purposes of determining whether the Plan satisfies the ACP
Test, all employee and employer matching contributions that are made under two
or more plans that are aggregated for purposes of Code Section 401(a)(4) or
410(b) (other than Code Section 410(b)(2)(A)(ii)) shall be treated as made under
a single plan and, if two or more such plans are permissively aggregated for
purposes of Code Section 401(m), the aggregated plans must also satisfy Code
Sections 401(a)(4) and 410(b) as though they were a single plan; provided,
however, that plans may be aggregated to satisfy the ACP Test only if they have
the same plan year.
(d) The Committee shall determine as of the end of each Plan Year,
and at such other time or times as it shall decide in its discretion, whether
the ACP Test is satisfied for such Plan Year and shall maintain records
sufficient to demonstrate satisfaction of the ACP Test. This determination shall
be made after first determining the amount, if any, of Excess Contributions
under Plan Section 6.3. In the event that the ACP Test is not satisfied, the
Committee shall refund or forfeit the Excess Aggregate Contributions in the
manner described in (f) below. For purposes of this Plan Section 6.4, "Excess
Aggregate Contributions" means, with respect to any Plan Year and with respect
to any Member, the excess of the aggregate amount of Matching Contributions and
Voluntary Contributions (and any income and losses allocable thereto) credited
to the Accounts of Highly Compensated Employees for such Plan Year over the
maximum amount of such contributions that could be made without violating the
ACP Test. The amount of each Highly Compensated Employee's Excess Aggregate
Contributions shall be determined by reducing the ACR of each Highly Compensated
Employee whose ACR is in excess of the percentage otherwise permitted under the
ACP Test to the maximum amount permitted thereunder.
(e) If the Committee is required to refund or forfeit Excess
Aggregate Contributions for any Highly Compensated Employee for a Plan Year in
order to satisfy the ACP Test, then such refund or forfeiture shall be made to
the extent practicable before the 15th day of the third month immediately
following the Plan Year for which such Excess Aggregate Contributions were made,
but in no event later than the last day of the Plan Year immediately following
the Plan Year for which such Excess Aggregate Contributions were made. For each
such Member, amounts so refunded or forfeited shall be made by first
distributing Voluntary Contributions credited to the Member's Account (and any
income or losses thereon up to the date of distribution), then by distributing
Vested Matching Contributions credited to the Member's Account (and any income
or losses thereon up to the date of distribution), and finally by forfeiting
non-Vested Matching Contributions credited to the Member's Account (and any
income or losses thereon up to the date of distribution). All such distributions
and forfeitures shall be made first to Highly Compensated Employees with the
largest dollar amount of Voluntary Contributions and Matching Contributions.
(f) For purposes of this Plan Section 6.4, the Plan shall use the
prior year testing method. Notwithstanding the foregoing, the Company may elect
to use the current year testing method rather than the prior year provided that
such election must be evidenced by a Plan amendment and once made may not be
changed except as provided by the Secretary of the Treasury.
6.5 Annual Addition Limitation.
(a) The provisions of this Plan Section 6.5 shall govern
notwithstanding any other provision of the Plan. For purposes of this Plan
Section 6.5, "Annual Addition" means the total amount of Matching Contributions,
Basic Savings Contributions, Voluntary Contributions and Flexible Retirement
Contributions credited to a Member's Account for the Plan Year. "Compensation"
means compensation as defined in Code Section 415(c)(3) and Regulation Section
1.415-2(d) (which is actually paid or includible in the Member's gross income
for the limitation year) and excludes, with respect to Plan Years commencing
prior to January 1, 1998, the following: (i) employer contributions to a plan of
deferred compensation which are not
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included in the employee's gross income for the taxable year in which
contributed or employer contributions under a simplified employee pension plan
to the extent such contributions are deductible by the employee, or any
distributions from a plan of deferred compensation; and (ii) other amounts which
received 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
excludable from gross income of the employee). "Limitation Year" means the Plan
Year.
(b) The maximum Annual Addition which may be credited for a Plan
Year to each Member's Account under this Plan and any other defined contribution
plan or plans maintained by the Employer or any Affiliate in which the Member
also participates, whether or not terminated, (including employee voluntary
contribution accounts under a defined benefit plan, key employee accounts under
a welfare plan described in Code Section 419 and employer contributions
allocated to an individual retirement account) shall not exceed the lesser of
25% of a Member's compensation for the Plan Year or $30,000 (as adjusted from
time to time in accordance with Code Section 415(d) and Regulations). This
limitation shall be administered in compliance with the requirements of Code
Section 415, the provisions of which are incorporated herein by reference.
(c) In the event that the amounts which would otherwise be allocated
to a Member's Account under this Plan must be reduced by reason of the
limitations above, such reduction shall be made in the following order of
priority, but only to the extent necessary:
(i) by first returning Voluntary Contributions credited to the
Member's Account (including any income or losses allocated thereto up to the
date of distribution); and then to
(ii)(A) if the Member is covered by the Plan at the end of the
Plan Year, by reducing Flexible Retirement Contributions for such Member in the
next Plan Year, and each succeeding Plan Year if necessary, or (B) if the Member
is not covered by the Plan at the end of the Plan Year, the excess amount will
be held unallocated in a suspense account and will be applied, as directed by
the Committee, in accordance with the Code and Regulations, to reduce future
Flexible Retirement Contributions for all remaining Members in the next Plan
Year, and each succeeding Plan Year if necessary.
(d) In the event that, in any Plan Year beginning before January 1,
2000 a Member also participates in any defined benefit plan (as defined in Code
Sections 414(j) and 415(k)) maintained by the Employer or any Affiliate, the sum
of the Member's defined benefit fraction (as defined in Code Section 415(e)(2))
and the Member's defined contribution fraction (as defined in Code Section
415(e)(3)) would otherwise exceed 1.0, then the Committee shall, to the extent
required by the Code and Regulations, take such action as is required in order
to reduce the benefit under such defined benefit plan or plans so that the sum
of such fractions with respect to the Member does not exceed 1.0. If this
reduction does not ensure that the limitation under Code Section 415 is not
exceeded, then the Annual Addition to any defined contribution plan or plans,
other than this Plan, shall be reduced in accordance with the provisions of that
plan or plans, but only to the extent necessary to ensure that such limitation
is not exceeded.
(e) Notwithstanding the foregoing provisions of this Plan Section
6.5, in the event that the limitations of this Plan Section 6.5 are exceeded,
the benefits payable and the contributions made under any other plans maintained
by the Company or any Affiliates which are qualified under Code Section 401(a)
(other than the Retirement Plan) shall be reduced prior to reducing a Member's
Annual Additions in accordance with this Plan Section 6.5. If, for any
Limitation Year beginning before January 1, 2000, after reducing the benefits
payable and the contributions made under any other plans (other than the
Retirement Plan) the limitations of this Plan Section 6.5 are exceeded, then the
benefits payable under the Retirement Plan shall be reduced, to the extent
necessary, prior to reducing a Member's Annual Additions in accordance with this
Plan Section 6.5.
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ARTICLE VII
INVESTMENT OF CONTRIBUTIONS AND VALUATION OF ACCOUNTS
7.1 The Trust. All amounts of money, securities or other property received
under the Plan shall be delivered to the Trustee under the Trust, to be managed,
invested, reinvested and distributed for the exclusive benefit of the Members
and their Beneficiaries in accordance with the Plan, the Trust and any agreement
with an insurance company or other financial institution constituting a part of
the Plan and Trust. It is intended that the Plan meet the requirements of ERISA
Section 404(c). In this regard, the Committee shall make available at least
three (3) Investment Funds that provide Members with a broad range of investment
alternatives (within the meaning of Department of Labor Regulation Section
2550.404c-1). The Committee reserves the right, at any time, to establish or
eliminate any Investment Fund or Funds for the investment of Member's Accounts.
7.2 Investments.
(a) In accordance with procedures established by the Committee, each
Member shall designate the Investment Fund or Funds in which the amounts
credited to his Account shall be invested. Each Member, upon making a Rollover
Contribution or plan to plan transfer, shall designate the Investment Fund or
Funds in which his Rollover Contributions shall be invested. In the absence of
the making of an investment direction, a contribution shall be invested in the
Investment Fund selected by the Committee, from time to time.
(b) Any investment direction given by a Member or Former Member
shall be deemed to be a continuing direction until changed by such Member or
Former Member.
(c) In accordance with procedures established by the Committee, a
Member or Former Member may change his investment direction with respect to
future contributions and prior contributions and direct that all or a portion of
his Account be transferred from any one or more Investment Funds to any other
Investment Fund or Funds at such time or times as the Committee may permit.
(d) Company Stock. Each Member (or, in the event of the Member's
death, his or her Beneficiary) is, for purposes of this section, designated a
"named fiduciary" within the meaning of ERISA Section 403(a)(1) and shall have
the right to direct the Trustee as to the manner in which shares of stock
allocated to his or her Account are to be voted on each matter brought before an
annual or special stockholders' meeting of the Company. Before each such meeting
of stockholders, the Committee shall cause to be furnished to each Member (or
Beneficiary) a copy of the proxy solicitation material, together with a form
requesting confidential direction on how such shares of stock amounts shall be
voted on each such matter. Upon timely receipt of such directions, the Trustee
shall on each such matter vote as directed the number of shares (including
fractional shares) of stock allocated to such Member's Account. The instructions
received by the Trustee from the Members shall be held by the Trustee in strict
confidence and shall not be divulged or released to any person including
officers or employees of the Company or an Affiliate. The Committee, in its sole
discretion and in accordance with its fiduciary duties under ERISA, shall give
the Trustee direction to vote shares for which the Trustee has not received
direction.
(e) Dividends, interest and other distributions received with
respect to a particular investment option shall be reinvested in the same
investment option.
(f) A Member shall have such voting and similar rights with respect
to an investment option as shall be provided in the Trust Agreement.
7.3 Valuation.
(a) As of each Valuation Date, the Trust Fund shall be valued at its
fair market value pursuant to the terms of the Trust to reflect the effect of
income received and accrued, realized and unrealized profits and losses, and all
other transactions of the preceding period. Such valuation shall be conclusive
and binding upon all persons having an interest in the Trust Fund.
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<PAGE>
(b) All contributions made on behalf of or allocated to a Member
shall be credited to his Account. As of any Valuation Date, the value of a
Member's Account shall be the value of such Account as of the immediately
preceding Valuation Date, adjusted to reflect changes in the value of the Trust
Fund allocable thereto in accordance with (a) above, plus the amount of
contributions, if any, credited thereto and less any distributions made
therefrom since the immediately preceding Valuation Date.
7.4 Accounting Procedures. The Committee shall have complete discretion to
establish and utilize an accounting system to account for the interests of each
Member. To the extent permitted by the Code and the Regulations, the Committee
may change the accounting system from time to time.
7.5 Payment Of Expenses.
(a) The expenses of administering the Plan, including (i) the fees
and expenses of the Trustee and of any investment manager for the performance of
their duties under the Plan and Trust, (ii) the expenses incurred by the members
of the Committee in the performance of their duties under the Plan (including
reasonable compensation for any legal counsel, certified public accountants,
consultants and agents and cost of services rendered in respect of the Plan),
and (iii) all other proper charges and disbursements of the Trustee or members
of the Committee (including settlements of claims or legal actions approved by
counsel to the Plan) may be paid out of the Trust Fund and allocated to, and
deducted from, the Accounts of Members if the Company does not pay such expenses
directly.
(b) Brokerage fees, transfer taxes and any other expenses incident
to the purchase or sale of securities by the Trustee may be deemed to be part of
the cost of such securities, or deducted in computing the proceeds therefrom, as
the case may be. Taxes, if any, of any and all kinds whatsoever that are levied
or assessed on any assets held or income received by the Trustee shall be
allocated to and deducted from the Accounts of Members.
7.6 Exclusive Benefit Rule. The assets of the Trust shall not inure to the
benefit of any Employer and shall be held for the exclusive purpose of providing
benefits to Members and/or their Beneficiaries and for defraying the reasonable
expenses of administering the Plan as provided in Plan Section 7.5.
Notwithstanding the foregoing, (i) any portion of an Employer's contribution
which is made by virtue of a mistake of fact pursuant to ERISA Section 403(c)(2)
shall be returned to the Employer within one (1) year after payment of the
contribution; (ii) the Employer's contribution is conditioned upon the
deductibility of the contribution for federal income tax purposes under Code
Section 404 and, to the extent any such contribution is disallowed as a
deduction, such contribution (to the extent disallowed) shall be returned to the
Employer within one year of the disallowance; and (iii) the Employer's
contribution is conditioned upon the Plan's initial qualification for favorable
federal income tax treatment under Code Section 401(a) and, in the event the IRS
determines that the Plan does not initially qualify under Code Section 401(a),
any contribution made incident to such initial qualification shall be returned
to the Employer within one year following the date the initial qualification is
denied, but only if the application to the IRS for qualification is made by the
time prescribed by law for filing the Employer's tax return for the taxable year
in which the Plan is adopted or such later date as the IRS may prescribe.
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ARTICLE VIII
DISTRIBUTIONS
8.1 Time of Distribution.
(a) Except as otherwise provided herein, distributions from the Plan
shall only be made upon a Member's Retirement, Disability, death or when he
otherwise incurs a Severance Date.
(b) Subject to Plan Section 8.4, a Member who incurs a Severance
Date on account of his Retirement or Disability shall be entitled to receive a
distribution of the value of his Account Balance as of the last Valuation Date
in the Plan Year in which his Severance Date occurs in accordance with
procedures adopted by the Committee. Subject to Plan Section 8.5, such
distribution shall be made in the method provided in Plan Section 8.2 as soon as
practicable following such Valuation Date in accordance with procedures adopted
by the Committee; provided, however, that with respect to a Member's Flexible
Retirement Contribution Account, the Member may elect instead to receive an
initial distribution representing the value of his Account Balance as of the
Valuation Date immediately following his Severance Date plus a subsequent
distribution representing the value, if any, of his Account Balance as of the
last Valuation Date of the Plan Year in which his Severance Date occurs.
(c) A Member who incurs a Severance Date for any reason other than
Retirement, Disability or death shall be entitled to receive the value of his
Vested Account Balance as of the Valuation Date following his Severance Date.
Subject to Section 8.5, such distribution shall be made in the method provided
in Plan Section 8.2 as soon as practicable following such Valuation Date.
(d) A Member referred to in (b) or (c) above may defer distribution
of his Account Balance until such later date as he may elect, but not later than
his Normal Retirement Date, in which event he shall receive distribution of the
value of his Vested Account Balance in the method provided in Plan Section 8.2
as soon as practicable following the Valuation Date immediately preceding the
date of distribution.
8.2 Method of Distribution. Subject to Plan Sections 8.5 and 8.9,
distribution of the value of a Member's Account Balance shall be made in the
form of one lump sum payment from the Plan.
8.3 Distributions On Death. Upon the death of a Member prior to the time
distribution of his benefit has commenced, distribution of the value of the
Member's Account Balance as of the last Valuation Date in the Plan Year in which
the Member's death occurs shall be made to the Member's Beneficiary in a single
sum payment. Subject to Plan Section 8.5, such distribution shall be made as
soon as practicable following such Valuation Date; provided, however, that in
lieu of a single sum distribution described above, a Member's Beneficiary may
elect to receive the value of the Member's Account Balance in two payments, the
first as of the Valuation Date immediately following the date of death of the
Member, and a final distribution as of the last Valuation Date in the Plan Year
in which the Member's death occurs.
8.4 Limitation On Distributions.
(a) Required Beginning Date. Notwithstanding any other provision of
the Plan and subject to Plan Section 14.5, unless otherwise provided by law and
except as otherwise provided in this Plan Section 8.4(a), all distributions
shall be determined and made in accordance with Code Section 401(a)(9) and the
Regulations thereunder. The entire interest of a Member must be distributed or
begin to be distributed no later than the Member's required beginning date which
is the later of April 1 of the calendar year following the calendar year in
which the Member attains age 70 1/2 or retires except that distributions to a 5%
owner (as defined in Code Section 416) must commence by April 1 of the calendar
year following the calendar year in which the Member attains age 70 1/2.
(i) Any Member attaining age 70 1/2 on or after January 1,
1996 and prior to January 1, 1999, who has not incurred a Severance Date, may,
pursuant to the Code and Regulations, elect, in such manner as the Committee may
prescribe, by April 1 of the calendar year following the year in which the
Member attains age 70 1/2 (or by December 31, 1997 in the case of a Member
attaining age 70 1/2 in 1996) to defer distributions from the Plan until the
calendar year following the calendar year in which the Member retires. If no
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<PAGE>
such election is made the Member will begin receiving distributions by April 1
of the calendar year following the year in which the Member attained age 70 1/2
(or by December 31, 1997 in the case of a Member attaining age 70 1/2 in 1996).
(ii) Any Member attaining age 70 1/2 in years prior to January
1, 1997 who has not incurred a Severance Date, may elect, in such manner as the
Committee may prescribe, to stop distributions and recommence by April 1 of
the calendar year following the year in which the Member retires.
(b) Distribution Periods. If benefits are not paid in a single sum
payment, such benefits shall be paid, in accordance with the Regulations, (i)
over the life of the Member, (ii) over the life of the Member and a designated
Beneficiary, (iii) over a period not extending beyond the life expectancy of the
Member or (iv) over a period not extending beyond the joint life expectancies of
the Member and a designated Beneficiary.
(c) Minimum Distribution Amount. The minimum distribution required
for the Member's first distribution calendar year must be made on or before the
Member's required beginning date in accordance with the requirements of Code
Section 401(a)(9) and Regulations thereunder. The minimum distribution for each
other calendar year, including the minimum distribution for the year in which
the Member's required beginning date occurs, must be made on or before December
31 of the distribution calendar year.
(d) Distributions Beginning Before Death. If distribution of a
Member's benefit has commenced prior to a Member's death, and such Member dies
before his entire benefit is distributed to him, distribution of the remaining
portion of the Member's benefit to his Beneficiary shall be made at least as
rapidly as under the method of distribution in effect as of the date of the
Member's death.
(e) Distributions Beginning After Death. If a Member dies before
distribution of his benefit has commenced, distribution of his entire interest
shall be completed by December 31 of the calendar year which contains the 5th
anniversary of the date of such Member's death; provided, however, at the
Beneficiary's irrevocable election, duly filed with the Committee before the
applicable commencement date set forth in the following sentence, any
distribution to a Beneficiary may be made over a period not extending beyond the
life expectancy of the Beneficiary. Such distribution shall commence no later
than December 31 of the calendar year immediately following the calendar year in
which the Member dies or, in the event such Beneficiary is the Member's
Surviving Spouse, the Surviving Spouse may elect to defer receipt of such
distribution until (i) the date on which the Member would have attained his
Normal Retirement Date, or (ii) in the case of a Member who was an Employee on
or after his Normal Retirement Date, December 31 of the calendar year in which
such Member would have attained age 70 1/2, if later (or, in either case, on any
later date prescribed by the Regulations). If such Member's Surviving Spouse
dies after the Member, but before distributions to such Surviving Spouse
commence, this Subsection (e) shall be applied to require payment of any further
benefits as if such Surviving Spouse were the Member.
(f) Commencement of Benefits. Notwithstanding the foregoing and
subject to Plan Section 14.5, unless the Member elects a later date, payment of
benefits under the Plan shall commence no later than the 60th day after the
latest of the last day of the Plan Year in which the Member (i) attains his
Normal Retirement Date, (ii) attains his 10th anniversary of Plan membership or
(iii) terminates his employment.
(g) Life Expectancy. Life expectancy and joint and last survivor
expectancy are computed using the expected return multiples in Tables V and VI
of Treasury Regulation Section 1.72-9. The life expectancy of a Member and his
Spouse (except in the case of a Straight Life Annuity), for purposes of this
Plan Section 8.4, shall be recalculated annually in accordance with the
Regulations.
(h) 5% Owner. A Member is treated as a 5% owner if such Member is a
5% owner as defined in Code Section 416 at any time during the Plan Year ending
with or within the calendar year in which such owner attains age 70 1/2. Once
distributions have begun to a 5% owner, they must continue to be distributed,
even if the Member ceases to be a 5% owner in a subsequent year.
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8.5 Cash Outs. Notwithstanding any other provision of the Plan, to the
extent required by the Code and the Regulations, if the value of a Member's
Account Balance at the time of distribution does not exceed $5,000, such amount
shall be distributed, without any consent, immediately in one lump sum payment
in full settlement of the Plan's liability therefor. However, after benefit
payments have commenced to the Member and the Account Balance is reduced to
$5,000 or less, no such lump sum payment shall be made without the consent of
the Member and, if the Member is married at the time such payment would
otherwise commence, the consent of the Member and his Spouse or, if the Member
has died, his Surviving Spouse. If the value of a Member's Account Balance
exceeds $5,000, no distribution shall be made to such Member prior to the date
he attains his Normal Retirement Date without his written consent and, if he is
married, his Spouse's written consent, and if the Member has died, his Surviving
Spouse's consent. In the absence of receipt of such consent by the Committee,
distribution to such Member shall be made as soon as practicable after he
attains his Normal Retirement Date.
8.6 Lump Sum Distribution. Distribution shall be made in cash. Amounts
representing investment in Company Stock shall be made in cash unless the Member
elects otherwise in which case payment shall be made in shares of Company Stock;
provided, however, that any fractional shares of Company Stock shall be paid in
cash.
8.7 Direct Rollover. Notwithstanding any provision of the Plan to the
contrary, a Distributee may elect, at the time and in the manner prescribed by
the Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
8.8 Qualified Domestic Relations Order. To the extent permitted under Code
Section 414(p), if provided for under the alternate payee's Qualified Domestic
Relations Order, such alternate payee shall be entitled to an immediate
distribution of the portion of the Member's Account Balance segregated for the
benefit of the alternate payee.
8.9 Distributions Subject to a Qualified Joint and Survivor Annuity. For
purposes of this Section, a Member's Flexible Retirement Contribution Account
and a Member's Prior Plan Employer Account shall be distributed pursuant to a
Qualified Joint and Survivor Annuity.
(a) A "Qualified Joint and Survivor Annuity" means a benefit
providing an annuity, in an amount that may be provided with the value of the
Member's Vested Flexible Retirement Contribution Account or Prior Plan Employer
Account, for the life of the Member, ending with the payment due on the last day
of the month coincident with or preceding the date of his death, and, if the
Member dies leaving a Surviving Spouse, a survivor annuity for the life of the
Surviving Spouse equal to 50% of the annuity payable for the life of the Member,
commencing on the last day of the month following the date of the Member's death
and ending with the payment due on the last day of the month concurrent with or
preceding the date of the Surviving Spouse's death.
(b) Waiver. A married Member or Former Member may, with the written
and notarized consent of his Spouse (unless the Committee makes a written
determination in accordance with the Code and Regulations that no such consent
is required), elect in writing to (i) receive distribution in a lump sum payment
in lieu of a Qualified Joint and Survivor Annuity within the 90-day period
ending on the annuity starting date and (ii) in the event of the Member's death,
waive the Preretirement Survivor Annuity within the period beginning on the
earlier of the first day of the Plan Year in which the Member attains age 35 or
the Member's Severance Date and ending on the Member's death. Any election made
pursuant to this Section may be revoked by a Member, without spousal consent, at
any time within which such election could have been made. Such an election or
revocation must be made in accordance with procedures developed by the Committee
in accordance with the Code and the Regulations; provided, however, that the
Committee must provide the Member such information which clearly indicates that
the Member has a right to at least 30 days to consider whether to waive the
Qualified Joint and Survivor Annuity or Preretirement Survivor Annuity and
consent to a form of distribution other than a Qualified Joint and Survivor
Annuity or Preretirement Survivor Annuity. Notwithstanding any provisions of
this Section to the contrary, any waiver of a Qualified Joint and Survivor
Annuity or Preretirement Survivor Annuity shall not be effective unless: (i) the
Member's Spouse consents in
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<PAGE>
writing to the election; (ii) the election designates a specific alternate
beneficiary which may not be changed without spousal consent (or the spouse
permits designations by the Member without any further spousal consent); (iii)
the Spouse's consent acknowledges the effect of the election; and (iv) the
Spouse's consent is witnessed by a notary public. Additionally, a Member's
waiver of the Qualified Joint and Survivor Annuity will not be effective unless
the election designates a form of benefit payment which may not be changed
without spousal consent (or the Spouse expressly permits designations by the
Member without further spousal consent). No consent shall be valid unless the
Member has received notice as set forth below.
(c) Notice. The Committee shall furnish, or cause to be furnished,
to each married Member written explanations of the Qualified Joint and Survivor
Annuity or Preretirement Survivor Annuity, as applicable, at least 30 days, but
in no event more than 90 days, prior to the annuity starting date under
procedures developed by the Committee in accordance with the Code and
Regulations. The explanation shall specify: (i) the terms and conditions of a
Qualified Joint and Survivor Annuity or Preretirement Survivor Annuity; (ii) the
Member's right to make and the effect of an election to waive the Qualified
Joint and Survivor Annuity form of benefit or Preretirement Survivor Annuity
form of benefit; (iii) the rights of the Member's Spouse; (iv) the right to
make, and the effect of, a revocation of a previous election to waive the
Qualified Joint and Survivor Annuity or Preretirement Survivor Annuity; and (v)
the relative values of the various optional forms of benefit under the Plan.
(d) Annuity Starting Date. For purposes of this Section, the
"annuity starting date" means the first day of the first period for which an
amount is payable as an annuity or any other form.
(e) Revocation. The annuity starting date for a distribution in a
form other than a Qualified Joint and Survivor Annuity may be less than 30 days
after receipt of the written explanation provided: (i) the Member has been
provided with information that clearly indicates that the Member has at least 30
days to consider whether to waive the Qualified Joint and Survivor Annuity and
elect (with spousal consent) a form of distribution other than a Qualified Joint
and Survivor Annuity; (ii) the Member is permitted to revoke any affirmative
distribution election at least until the annuity starting date or, if later, any
time prior to the expiration of the seven-day period that begins the day after
the explanation of the Qualified Joint and Survivor Annuity is provided to the
Member; and (iii) the annuity starting date is a date after the date that the
written explanation was provided to the Member.
(f) Notwithstanding any other provisions of this Section to the
contrary, if a Member waives the Qualified Joint and Survivor Annuity, payment
of benefits to the Member may commence upon the expiration of the seven-day
period that begins the day after the explanation of the Qualified Joint and
Survivor Annuity is furnished by the Committee to the Member.
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<PAGE>
ARTICLE IX
DESIGNATION OF BENEFICIARIES
9.1 Designation of Beneficiary. In accordance with procedures established
by the Committee, each Member shall file with the Committee a written
designation of one or more persons or entities as the Beneficiary who shall be
entitled to receive the amount, if any, payable under the Plan upon his death.
Subject to Article VIII, a Member may from time to time revoke or change his
Beneficiary designation without the consent of any prior Beneficiary by filing a
new designation with the Committee. Notwithstanding the foregoing, if the Member
is married, his Spouse must consent in writing to the designation of a
Beneficiary other than the Member's Spouse (unless the Committee makes a written
determination in accordance with the Code and the Regulations that no such
consent is required). The last such designation received by the Committee shall
be controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Member's death, and in no event shall it be effective as of a date prior to such
receipt.
9.2 Lack of Designated Beneficiary. In the absence of a valid Beneficiary
designation in effect at the time of a Member's death, or if no validly
designated Beneficiary survives the Member or if each surviving validly
designated Beneficiary is legally impaired or prohibited from taking, then the
Member's Beneficiary shall be his Surviving Spouse, if any, or if the Member has
no Surviving Spouse, then his estate. If the Committee is in doubt as to the
right of any person to receive such amount, it may direct the Trustee to retain
such amount, without liability for any interest thereon, until the rights
thereto are determined, or the Committee may direct the Trustee to pay such
amount into any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Plan and the Trust therefor.
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<PAGE>
ARTICLE X
IN-SERVICE WITHDRAWALS
10.1 Withdrawals Before Age 59 1/2 (Other than Hardship)
(a) In accordance with procedures established by the Committee, a
Member may withdraw all or a specified portion of the value of his Voluntary
Contribution Account and Rollover Contribution Account from such Investment Fund
or Funds as the Member may specify by filing the appropriate forms with the
Committee. A Former Member shall not be eligible to make any such withdrawal.
(b) A Member must withdraw the full balance available from each
category below prior to withdrawing any amount in a subsequent category:
Category Contribution Type
-------- -----------------
1. Pre-1987 Voluntary Contribution Subaccount
2. Post-1986 Voluntary Contribution Account and related
earnings
3. Pre-1987 Voluntary Contribution Earnings Subaccount
4. Rollover Contribution Account and related earnings
10.2 Withdrawals On or After Age 59 1/2 (Other than Hardship). A Member
who has attained age 59 1/2 may request a withdrawal under this Section only if
taken from the categories listed below in the order provided below. An active
Member must withdraw the full balance available from each category prior to
withdrawing any amount in a subsequent category.
Category Contribution Type
-------- -----------------
1. Pre-1987 Voluntary Contribution Subaccount
2. Post-1986 Voluntary Contribution Account and related
earnings
3. Pre-1987 Voluntary Contribution Earnings Subaccount
4. Rollover Contribution Account and related earnings
5. Prior Plan Account and related earnings
6. Vested portion of a Member's Matching Contribution
Account and related earnings
7. Basic Savings Contribution Account and related earnings
8. Prior Plan Employer Account and all related earnings
10.3 Hardship Withdrawals.
(a) In accordance with procedures established by the Committee, a
Member who has made all permissible withdrawals (other than hardship
withdrawals) and has obtained all loans currently available under the Plan and
all other plans maintained by the Employer and any Affiliate in which the Member
also participates, may request a hardship withdrawal from the Plan by filing the
appropriate forms with the Committee. Such forms shall include the Member's
written representation that the amount of the hardship withdrawal does not
exceed the amount necessary to satisfy a heavy and immediate financial need of
the Member (as described in (b) below), including the amount necessary to pay
federal, state or local taxes or penalties reasonably anticipated to result from
the hardship withdrawal. A Former Member shall not be eligible to make any such
withdrawal.
(b) Hardship withdrawals shall be available only if the withdrawal
is made on account of an immediate and heavy financial need of the Member
resulting from:
(i) Expenses for medical care described in Code Section 213(d)
previously incurred by the Member, his Spouse or any dependents of the Member
(as defined in Code Section 152) or necessary for such persons to obtain such
medical care.
(ii) Costs directly related to the purchase (excluding
mortgage payments) of the principal residence of the Member.
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(iii) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the Member or his Spouse,
children or dependents (as defined in Code Section 152).
(iv) Payments necessary to prevent the Member's eviction from
his principal residence or the foreclosure on the mortgage of the Member's
principal residence.
(v) Such other events as may be prescribed by the IRS.
(c) Any Member who makes a hardship withdrawal shall not be
permitted to make Basic Savings Contributions or Voluntary Contributions to the
Plan for the 12-month period immediately following the date on which the
hardship withdrawal is received. In addition, the maximum amount of Basic
Savings Contributions (as provided in Plan Section 6.2) made on behalf of such
Member for the first Plan Year in which the Member resumes making Basic Savings
Contributions shall be reduced by the amount of Basic Savings Contributions made
on such Member's behalf for the Plan Year in which the hardship withdrawal was
made.
(d) A Member must withdraw the full balance available from each
category below prior to withdrawing any amount in a subsequent category:
Category Contribution Type
-------- -----------------
1. Pre-1987 Voluntary Contribution Subaccount
2. Post-1986 Voluntary Contribution Account and related
earnings
3. Pre-1987 Voluntary Contribution Earnings Subaccount
4. Rollover Contribution Account and related earnings
5. Prior Plan Account and related earnings
6. Vested portion of a Member's Matching Contribution
Account and related earnings
7. Basic Savings Contribution Account and related earnings
10.4 Termination of Employment. In the event a Member who has requested a
withdrawal incurs a Severance Date prior to receiving such withdrawal, the
withdrawal request shall be null and void and the provisions of Article VIII
shall apply.
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<PAGE>
ARTICLE XI
LOANS
11.1 Permitted Loans. Subject to the following provisions of this Article
XI, a Member may make application to borrow from his Vested Account Balance
(excluding amounts credited to his Flexible Retirement Contribution Account) for
any reason by filing the appropriate form with the Committee. A Former Member
shall not be permitted to borrow from his Vested Account Balance. Determination
of whether a loan shall be approved shall be made under procedures developed by
the Committee and applied in a uniform and nondiscriminatory manner.
11.2 Required Consent. To the extent required by the Code and Regulations,
no loan from a Member's Prior Plan Employer Account shall be made to any Member
unless the Committee receives the written consent of the Member and, if the
Member is married, the written and notarized consent of the Member's Spouse, to
the loan and to any potential reduction in the Member's Account Balance
resulting from such loan, and authorizing payroll deductions for the repayment
of the loan.
11.3 Limitations On Loans.
(a) The maximum amount available for loan under the Plan (when added
to the outstanding balance of all other loans from the Plan to the Member) may
not exceed the lesser of (i) $50,000 reduced by the excess, if any, of (A) the
highest outstanding loan balance owed by the Member during the one-year period
ending on the day preceding the date of the loan over (B) the outstanding
balance of all other loans from the Plan to the Member on the date of the loan,
or (ii) 50% of his Vested Account Balance.
(b) At any time a Member may not have more than one outstanding loan
from the Plan. For Plan Years prior to January 1, 2001, if a Member has more
than one outstanding loan, such Member shall continue repayments on all
outstanding loans and shall not be permitted to take another loan until all
outstanding loans are repaid in full.
(c) The amount available for a loan shall be determined as of the
Valuation Date immediately preceding the date on which the Member applies for a
loan.
(d) Member must withdraw the full balance available from each
category prior to withdrawing any amount in a subsequent category.
Category Contribution Type
-------- -----------------
1. Rollover Contribution Account and related earnings
2. Prior Plan Account and related earnings
3. Vested portion of a Member's Matching Contribution
Account and related earnings
4. Basic Savings Contribution Account and related earnings
5. Pre-1987 Voluntary Contribution Subaccount
6. Post-1986 Voluntary Contribution Account and related
earnings
7. Prior Plan Employer Account and all related earnings
11.4 Adequate Security. Loans from the Plan shall require adequate
security which shall consist of a promissory note signed by the Member pledging
the Member's entire Account Balance and any other collateral deemed necessary as
security for the loan.
11.5 Repayment. Each loan to a Member shall be repaid by payroll
deductions, or by such other method as the Committee may permit, in
substantially equal installments. Repayments shall be applied first to accrued
interest and then to principal. Each loan shall have a repayment period of not
less than 12 nor more than 60 months, except that a loan that is used to
purchase the borrower's principal residence may have a repayment period in
excess of 60 months. Principal residence status will be determined at the time
application for the loan is made. Any loan may be prepaid in whole without
penalty at any time.
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<PAGE>
11.6 Interest Charges. The interest rate on all loans to Members will be
determined on the first day of each month and will be based on the prime rate as
published in The Wall Street Journal on the last business day of the prior
month.
11.7 Default. If at any time prior to the full repayment of the loan the
Member's periodic loan payments cease to be made for any reason, the loan shall
be in default and shall be immediately due and payable. Notice of the default
shall be given to the Member at his last known address. If the unpaid balance is
not repaid by the date specified in such Notice, the unpaid loan and interest
shall be deducted from the Loan Fund and shall be reported as a taxable
distribution to the Member on Form 1099-R without further action by or approval
of the Member, the Member's Spouse or any Beneficiary in complete discharge of
all liability to the Plan for the loan. If a Member defaults on a loan, such
Member shall be precluded from taking another loan from the Plan.
11.8 Termination of Employment. If at any time prior to the full repayment
of a loan the Member terminates his employment for any reason, or if the Plan
should terminate, the unpaid balance of the Member's loan (including any
interest thereon) shall be immediately due and payable, and if the unpaid
balance is not repaid by the date the Member terminates his employment, the
unpaid loan and interest shall be deducted from the Loan Fund and shall be
reported as a taxable distribution to the Member on Form 1099-R without further
action by or approval of the Member, the Member's Spouse or any Beneficiary in
complete discharge of all liability to the Plan for the loan.
11.9 Suspension for Qualified Military Service. Notwithstanding any
provision of the Plan to the contrary, repayment of all loans under the Plan
shall be suspended during any Break in Service due to qualified military service
as required under Code Section 414(u).
11.10 Administration of Loans. The Committee may promulgate such rules and
procedures necessary relating to such loans and they shall form a part of the
Plan.
26
<PAGE>
ARTICLE XII
ADMINISTRATION OF THE PLAN
12.1 The Employee Benefit Plans Committee.
(a) The Committee shall have general responsibility for the
administration and interpretation of the Plan including, but not limited to,
complying with applicable reporting and disclosure requirements, establishing
and maintaining Plan records and issuing instructions to the Trustee regarding
the benefits that are to be paid from the Trust Fund to Members and
Beneficiaries and adopting amendments to the Plan (as described in Plan Section
14.1) and exercising such other rights and powers as may be specifically granted
to it herein or by the Board.
(b) The Committee shall periodically review the investment
performance and methods of the Trustee and any other funding agency, including
any insurance company, under the Plan and may appoint and remove or change the
Trustee and any such funding agency. The Committee shall have the power to
appoint or remove one or more investment managers and to delegate to such
manager authority and discretion to manage (including the power to acquire and
dispose of) the assets of the Plan, provided that (i) each manager with such
authority and discretion shall be either a bank, an insurance company or a
registered investment adviser under the Investment Advisers Act of 1940 and
shall acknowledge in writing that it is a fiduciary with respect to the Plan and
(ii) the Committee shall periodically review the investment performance and
methods of each manager with such authority and discretion. The Committee shall
determine any requirements and objectives of the Plan (including any interest
rate or other actuarial assumptions) which may be pertinent to the investment of
Plan assets and shall establish investment standards and policies incorporating
such requirements and objectives and communicate the same to the Trustee (or
other funding agencies under the Plan). If annuities are to be purchased under
the Plan, the Committee shall determine what contracts should be made available
to terminated Members or purchased by the Trust.
12.2 Composition of the Committee. The Chief Executive Officer of the
Company shall be the Chairman of the Committee (the "Chairman") with the
authority to appoint and remove members of the Committee. The Committee shall
consist of three or more members, each of whom shall be appointed by, shall
remain in office at the will of, and may be removed, with or without cause, by
the Chairman. Any member of the Committee may resign at any time. No member of
the Committee shall be entitled to act on or decide any matter relating solely
to himself or any of his rights or benefits under the Plan. The members of the
Committee shall not receive any special compensation for serving in their
capacities as members of the Committee but shall be reimbursed for any
reasonable expenses incurred in connection therewith. Except as otherwise
required by ERISA, no bond or other security need be required of the Committee
or any member thereof in any jurisdiction. Any person may serve on the
Committee, and any member of the Committee, any sub-committee or agent to whom
the Committee delegates any authority, and any other person or group of persons
may serve in more than one fiduciary capacity (including service both as a
trustee and administrator) with respect to the Plan.
12.3 Indemnity. To the maximum extent permitted by law, no member of the
Committee nor any of its agents shall be personally liable by reason of any act
or omission or any contract or other instrument executed by him or on his behalf
in his capacity as a member of such Committee nor for any mistake of judgment
made in good faith. The Company shall indemnify and hold harmless, directly from
its own assets (including the proceeds of any insurance policy the premiums of
which are paid from the Company's own assets), each member of the Committee and
each other officer, director, or employee of the Company to whom any duty or
power relating to the administration or interpretation of the Plan or to the
management and control of the assets of the Plan may be delegated or allocated,
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim with the approval of the Company) arising out
of any act or omission to act in accordance with the Plan unless arising out of
such person's own fraud or bad faith.
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<PAGE>
12.4 Services To The Plan. The Committee shall engage such certified
public accountants, who may be accountants for the Company, as it shall require
or may deem advisable for purposes of the Plan. The Committee may arrange for
the engagement of such legal counsel who may be counsel for the Company, and
make use of such agents and clerical or other personnel as they each shall
require or may deem advisable for purposes of the Plan. The Committee may rely
upon the written opinion of such counsel and the accountants it has engaged and
may delegate to any such agent or to any subcommittee or member of the Committee
its authority to perform any act hereunder, including, without limitation, those
matters involving the exercise of discretion, provided that such delegation
shall be subject to revocation at any time at the discretion of the Committee.
The Committee shall report to the Board, or to a committee of the Board
designated for that purpose, at such times as the Board shall specify, regarding
the matters for which it is responsible under the Plan.
12.5 Action of The Committee. The Committee shall establish its own
procedures and the time and place for its meetings, and provide for the keeping
of minutes of all meetings. A majority of the members of the Committee shall
constitute a quorum for the transaction of business at a meeting of the
Committee. Any action of the Committee may be taken upon the affirmative vote of
a majority of the members of the Committee at a meeting or, at the direction of
its Chairman, without a meeting, by mail, telegraph, facsimile transmission or
telephone, provided that all of the members of the Committee are informed by
mail, facsimile transmission or telegraph of their right to vote on the proposal
and of the outcome of the vote thereon.
12.6 Committee Records. The Committee shall appoint an individual who
shall cause to be kept full and accurate accounts of receipts and disbursements
of the Plan, and shall cause to be deposited all funds of the Plan to the name
and credit of the Plan, in such depositories as may be designated by the
Committee. Such individual shall cause to be disbursed the monies and funds of
the Plan when so authorized by the Committee and shall generally perform such
other duties as may be assigned to him from time to time by the Committee. All
demands for money of the Plan shall be signed by such officer or officers or
such other person or persons as the Committee may from time to time designate in
writing. The Committee shall prepare, file, distribute, copy and make available
all returns, reports, statements, schedules and other papers required by ERISA
and the Code.
12.7 Claims Procedure.
(a) A claim for benefits under the Plan shall be submitted in
writing to the Committee on the form prescribed for that purpose by the
Committee. Written notice of the Committee's decision shall be furnished
promptly to the claimant. If the claim is wholly or partially denied, written
notice of the denial shall be furnished within 90 days after receipt of the
claim; provided, however, that, if special circumstances require an extension of
time for processing the claim, an additional 90 days from the end of the initial
period shall be allowed for processing the claim, in which event the claimant
shall be furnished with a written notice of the extension prior to the
termination of the initial 90-day period indicating the special circumstances
requiring an extension. Any written notice denying a claim shall set forth the
reasons for the denial, including specific references to pertinent provisions of
the Plan on which the denial is based, a description of any additional
information necessary to perfect the claim and information regarding review of
the claim and its denial.
(b) If a claimant wishes further consideration of his claim, he may
review all pertinent documents and may request in writing a review by the
Committee of the denial of his claim. Such a written request shall be filed with
the Committee within 60 days after delivery to the claimant of written notice of
the decision. Such written request for review shall contain all additional
information which the claimant wishes the Committee to consider. The Committee
may hold a hearing or conduct an independent investigation which it deems
necessary to render its decision, and the decision on review shall be made as
soon as possible after the Committee's receipt of the request for review.
Written notice of the decision on review shall be furnished to the claimant
within 60 days after receipt by the Committee of a request for review, unless
special circumstances require an extension of time for processing, in which
event an additional 60 days shall be allowed for review and the claimant shall
be so notified in writing. Written notice of the decision on review shall
include specific reasons for the decision and shall make specific reference to
the pertinent Plan provisions on which the
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decision is based. For all purposes under the Plan, such decision on claims
(where no review is requested) and decision on review (where review is
requested) shall be final, binding and conclusive on all interested persons as
to any matter of fact or interpretation relating to the Plan.
12.8 Communications. Any notice, election, application, consent,
instruction, designation or other form of communication required to be given or
submitted by any Member, other Employee or Beneficiary shall be in such form as
is prescribed from time to time by the Committee, sent by first class mail or
delivered in person, and shall be deemed to be duly given only upon actual
receipt thereof by the Committee. Any notice, statement, report and other
communication from the Company or the Committee to any Member, other Employee or
Beneficiary required or permitted by the Plan shall be deemed to have been duly
given when delivered to such person or mailed by first class mail to such person
at his address last appearing on the records of the Company or the Committee.
Each person entitled to receive a payment under the Plan shall file in
accordance herewith his complete mailing address and each change therein. A
check or communication mailed to any person at his address on file with the
Company or the Committee shall be deemed to have been received by such person
for all purposes of the Plan, and no employee or agent of the Company or member
of the Committee shall be obliged to search for or ascertain the location of any
such person except as required by ERISA. If the Committee is in doubt as to
whether payments are being received by the person entitled thereto, it may, by
registered mail addressed to such person at his address last known to the
Committee notify such person that all future payments will be withheld until
such person submits to the Committee his proper mailing address and such other
information as the Committee may reasonably request. Notwithstanding the
foregoing, to the extent permitted by the IRS and Department of Labor, notice,
election, application, instruction, designation or other form of communication
required to be given or submitted by any Member, other Employee or Beneficiary
may be transmitted electronically.
12.9 Information From Members. Each Member shall file with the Committee
such pertinent information concerning himself and his Beneficiary, and each
Beneficiary shall file with the Committee such information concerning himself,
as the Committee may specify, and in such manner and form as the Committee may
specify or provide, and no Member or Beneficiary shall have any right or be
entitled to any benefits or further benefits under the Plan unless such
information is filed by him or on his behalf.
12.10 Agent for Service of Process. The Chairman of the Committee or such
other person as may from time to time be designated by the Committee shall be
the agent for service of process under the Plan.
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ARTICLE XIII
TERMINATION OF EMPLOYER PARTICIPATION
13.1 Right of Termination. Any Employer may terminate its participation in
the Plan by giving the Committee prior written notice specifying a termination
date which shall be the last day of a month at least 60 days subsequent to the
date such notice is received by the Committee. The Committee may terminate any
Employer's participation in the Plan, as of any termination date specified by
the Committee, for the failure of the Employer to make proper contributions or
to comply with any other provision of the Plan and shall terminate an Employer's
participation upon complete and final discontinuance of the Employer's
contributions.
13.2 Result of Termination.
(a) Upon termination of the Plan as to any Employer, such Employer
shall not make any further contributions under the Plan and no amount shall
thereafter be payable under the Plan to or in respect of any Member then
employed by such Employer except as provided in this Article XIII. To the
maximum extent permitted by ERISA, the rights of Members no longer employed by
such Employer and of Former Members and their Beneficiaries under the Plan shall
be unaffected by a termination of the Plan. Any transfers, distributions or
other dispositions of the assets of the Plan as provided in this Article XIII
shall constitute a complete discharge of all liabilities under the Plan with
respect to such Employer's participation in the Plan and any Member then
employed by such Employer.
(b) The interest of each such Member in service with such Employer
as of the termination date in his Account Balance after payment of or provision
for expenses and charges and appropriate adjustment of the Accounts of all such
Members for expenses, charges, and profits and losses shall be nonforfeitable as
of the termination date, and upon receipt by the Committee of IRS approval of
such termination, the full current value of such amount shall be paid from the
Trust Fund in the manner described in Article VIII or transferred to a successor
employee benefit plan which is qualified under Code Section 401(a); provided,
however, that in the event of any transfer of assets to a successor employee
benefit plan the provisions of Plan Section 14.5 will apply.
(c) All determinations, approvals and notifications referred to
above shall be in form and substance and from a source satisfactory to the
Committee. To the maximum extent permitted by ERISA, the termination of the Plan
as to any Employer shall not in any way affect any other Employer's
participation in the Plan.
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ARTICLE XIV
AMENDMENT OR TERMINATION OF THE PLAN AND TRUST
14.1 Right to Amend or Terminate Plan.
(a) Subject to (b) and (c) below, the Board reserves the right at
any time to amend, modify, suspend or terminate the Plan, any contributions
thereunder, the Trust or any contract issued by an insurance carrier forming a
part of the Plan, in whole or in part and for any reason and without the consent
of any Employer, Member, Beneficiary or Surviving Spouse; provided, however,
that the Committee may adopt such amendments which do not materially affect the
cost of the Plan and which may be necessary or appropriate to facilitate the
administration, management, or interpretation of the Plan or to conform the Plan
thereto, or to qualify or maintain the Plan and Trust as a plan and trust
meeting the requirements of Code Sections 401(a), 401(k), 401(m) and 501(a) or
any other applicable section of law (including ERISA) and the Regulations issued
thereunder, and may exercise such additional powers and authority as may be
granted by the Board from time to time. Each Employer by its adoption of the
Plan shall be deemed to have delegated this authority to the Board. The Plan
shall automatically be terminated upon complete and final discontinuance of
contributions thereunder.
(b) No amendment or modification shall be made that would
retroactively impair any rights to any benefit under the Plan that any Member,
Beneficiary or Surviving Spouse would otherwise have had at the date of such
amendment by reason of the contributions theretofore made and credited to his
Account, except to such extent as may be necessary or appropriate to qualify or
maintain the Plan, the Trust and any contract issued by an insurance carrier
which may form a part of the Plan and Trust as a plan and trust meeting the
requirements of Code Sections 401(a) and 501(a) or any other applicable section
of law (including ERISA) as now in effect or hereafter amended or adopted and
the Regulations issued thereunder, or make it possible for any part of the funds
of the Plan (other than such part as is required to pay taxes, if any, and
administrative expenses as provided in Plan Section 7.5) to be used for or
diverted to any purposes other than for the exclusive benefit of Members and
their Beneficiaries and Surviving Spouses and other eligible survivors under the
Plan prior to the satisfaction of all liabilities with respect thereto.
(c) Any amendment, modification, suspension or termination of any
provision of the Plan may be made retroactively if necessary or appropriate to
qualify or maintain the Plan and Trust as a plan and trust meeting the
requirements of Code Sections 401(a), 401(k), 401(m) and 501(a) or any other
applicable section of law (including ERISA) as now in effect or hereafter
amended or adopted and the Regulations issued thereunder.
(d) If an amendment changes the vesting provisions of the Plan, any
Member who has completed a three (3) year Period of Service may elect to have
the amount of his Vested benefit determined on the basis of the Plan provisions
in effect immediately prior to the effective date of the amendment.
14.2 Notice. Notice of any amendment, modification, suspension or
termination of the Plan shall be given by the Board or the Committee, whichever
adopts the amendment, to the other and to the Trustee and all Employers and,
where and to the extent required by law, to Members and other interested
parties.
14.3 Plan Termination.
(a) Upon termination of the Plan, the interest of each Member in his
Account shall be nonforfeitable as of the date of such termination, the Employer
shall not make any further contributions under the Plan and no amount shall
thereafter be payable under the Plan in respect of any Member except as provided
in this Article XIV. To the maximum extent permitted by ERISA, transfers,
distributions or other dispositions of the assets of the Plan as provided in
this Article XIV shall constitute a complete discharge of all liabilities under
the Plan. The Committee shall remain in existence and all of the provisions of
the Plan that in the opinion of the Committee are necessary for the execution of
the Plan and the administration and distribution, transfer or other disposition
of the assets of the Plan shall remain in force. After (i) payment of or
provision for all expenses and charges of the Plan and appropriate adjustment of
all Accounts for such expenses and charges, and (ii) adjustment for profits and
losses of the Trust to such termination date, the interest of each Member in
service as of the date of such termination in the amount, if any, credited to
his Account shall be nonforfeitable as of such date.
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(b) Upon receipt by the Committee of IRS approval of such
termination, the full current value of such adjusted amount shall be paid from
the Trust to each Member and Former Member, (or, in the event of the death of
such Member or Former Member, the Beneficiary thereof) in accordance with
Article VIII. Any such distributions may be made in cash or in property, or
both, as the Committee in its sole discretion may direct.
(c) All determinations, approvals and notifications referred to
above shall be in form and substance and from a source satisfactory to counsel
for the Plan.
14.4 Partial Termination. In the event a partial termination (within the
meaning of ERISA) of the Plan has occurred then (i) the interest of each Member
affected thereby in his Account shall be nonforfeitable as of the date of such
partial termination and (ii) the provisions of the Plan which in the opinion of
the Committee are necessary for the execution of the Plan and the allocation and
distribution of the assets of the Plan shall apply.
14.5 Successor Plan. No transfer of the Plan's assets and liabilities to a
successor employee benefit plan (whether by merger or consolidation with such
successor plan or otherwise) shall be made unless each Member would, if either
the Plan or such successor plan then terminated, receive a benefit immediately
after such transfer which (after taking account of any distributions or payments
to them as part of the same transaction) is equal to or greater than the benefit
he would have been entitled to receive immediately before such transfer if the
Plan had then been terminated. The Committee may also request appropriate
indemnification from the employer or employers maintaining such successor plan
before making such a transfer.
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ARTICLE XV
GENERAL LIMITATIONS AND PROVISIONS
15.1 Investment Risk. Each Member, Former Member and Beneficiary shall
assume all risk in connection with any decrease in the value of the assets of
the Trust and to the maximum extent permitted by ERISA, the Members' Accounts
and neither the Company, the Employer, the Committee nor any other fiduciary or
any of their respective agents shall be liable or responsible therefor.
15.2 Rights of Employer. Nothing contained in the Plan shall give any
Employee the right to be retained in the employment of the Company, any Employer
or any Affiliate or affect the right of any such Employer to dismiss any
Employee. The adoption and maintenance of the Plan shall not constitute a
contract between an Employer and any Employee or consideration for, or an
inducement to or condition of, the employment of any Employee.
15.3 Incompetent Payee. If the Committee shall find that any person to
whom any amount is payable under the Plan is found by a court of competent
jurisdiction to be unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any payment due him or his estate
(unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so elects, be paid to his Spouse, a child,
a relative, an institution maintaining or having custody of such person, or any
other person deemed by the Committee to be a proper recipient on behalf of such
person otherwise entitled to payment. Any such payment shall be a complete
discharge of the liability of the Plan and the Trust therefor.
15.4 Nonalienation of Benefits.
(a) Except as provided in Article XI or insofar as may otherwise be
required by law or pursuant to the terms of a Qualified Domestic Relations
Order, no amount payable at any time under the Plan and the Trust shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind nor in any
manner be subject to the debts or liabilities of any person and any attempt to
so alienate or subject any such amount, whether presently or thereafter payable,
shall be void. If any person shall attempt to, or shall, alienate, sell,
transfer, assign, pledge, attach, charge or otherwise encumber any amount
payable under the Plan and Trust, or any part thereof, or if by reason of his
bankruptcy or other event happening at any time such amount would be made
subject to his debts or liabilities or otherwise not enjoyed by him, then the
Committee may, in accordance with procedures applied in a uniform and
nondiscriminatory manner, direct that such amount be withheld and that the same
or any part thereof be paid or applied to or for the benefit of such person, his
Spouse, children or other dependents, or any of them, in such manner and
proportion as the Committee may deem proper.
(b) For purposes of the Plan, a "Qualified Domestic Relations Order"
means any judgment, decree or order (including approval of a settlement
agreement) which has been determined by the Committee, in accordance with
procedures established under the Plan, to constitute a qualified domestic
relations order within the meaning of Code Section 414(p)(1).
(c) Notwithstanding the foregoing, a Member's benefits may be offset
against an amount that the Member is ordered or required to pay if (i) the order
or requirement to pay arises (A) under a judgment of conviction for a crime
involving such plan, (B) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in connection with a violation
of part 4 of subtitle B of Title I of ERISA or (C) pursuant to a settlement
between the Secretary of Labor and the Member, or a settlement agreement between
the Pension Benefit Guaranty Corporation and the Member in connection with a
violation (or alleged violation) of part 4 of such subtitle by a fiduciary or
any other person; (ii) the judgment, order, decree or settlement agreement
expressly provides for the offset of all or part of the amount ordered or
required to be paid to the Plan against the Member's benefits provided under the
Plan; and (iii) in a case in which the survivor annuity requirements apply with
respect to distributions from the Plan to the Member, if the Member has a Spouse
at the time at which the offset is to be made, (A) either such Spouse has
consented in writing to such offset and such consent is witnessed by a notary
public or Plan representative, or an election to waive the right of the Spouse
to either a Qualified Joint and Survivor Annuity or a Preretirement Survivor
Annuity is in effect, (B) such Spouse is ordered or required in such judgment,
order, decree or settlement to pay an amount to
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the Plan in connection with a violation of part 4 of such subtitle, or (C) in
such judgment, order, decree or settlement, such Spouse retains the right to
receive the survivor annuity under a Qualified Joint and Survivor Annuity or a
Preretirement Survivor Annuity determined in accordance with section (d) below.
(d) The survivor annuity described in (c) above shall be determined
as if (i) the Member terminated employment on the date of the offset, (ii) there
was no offset, (iii) the Plan permitted commencement of benefits only on or
after normal retirement age, (iv) the Plan provided only the minimum required
qualified joint and survivor annuity and (v) the amount of the qualified
Preretirement Survivor Annuity under the Plan is equal to the amount of the
survivor annuity payable under the minimum required qualified joint and survivor
annuity. For purposes of this section, "minimum required qualified joint and
survivor annuity" means the qualified joint and survivor annuity which is the
actuarial equivalent of the Member's accrued benefit and under which the
survivor annuity is 50% of the amount of the annuity which is payable during the
joint lives of the Member and the Spouse.
15.5 Lost Payee. If the Committee cannot ascertain the whereabouts of any
person to whom a payment is due under the Plan, including an alternate payee
under a Qualified Domestic Relations Order pursuant to Plan Section 15.4, and
if, after three (3) years from the date such payment is due, a notice of such
payment due is mailed to the last known address of such person, as shown on the
records of the Committee or the Employer, and within three (3) months after such
mailing such person has not made written claim therefor, the Committee, if it so
elects, after receiving advice from counsel to the Plan, may direct that such
payment and all remaining payments otherwise due to such person be canceled on
the records of the Plan and the amount thereof applied to reduce the
contributions of the Employer, and upon such cancellation, the Plan and the
Trust shall have no further liability there for except that, in the event such
person later notifies the Committee of his whereabouts and requests the payment
or payments due to him under the Plan, the amount so applied shall be paid to
him as provided in Article VIII. An amount forfeited in accordance with this
Plan Section 15.5 shall be applied to reduce future Employer contributions to
the Plan.
15.6 Trust Agreement. Any and all rights or benefits accruing to any
persons under the Plan shall be subject to the terms of the Trust Agreement
which the Company shall enter into with the Trustee.
15.7 Credit For Prior Service. Upon such terms and conditions as the
Committee may approve, and subject to any required IRS approval, benefits may be
provided under the Plan to a Member with respect to any period of his prior
employment by any organization, and such benefits (and any Period of Service
credited with respect to such period of employment under Plan Section 2.41 may
be provided for, in whole or in part, by funds transferred, directly or
indirectly (including a rollover from an individual retirement account or an
individual retirement annuity as described in Code Section 408), to the Trust
from an employee benefit plan of such organization which qualified under Code
Section 401(a).
15.8 Trust as Source of Benefits. Any and all rights or benefits under the
Plan shall be subject to the terms of the Trust Agreement which the Company
shall enter into with the Trustee. The Trust shall be the sole source of
benefits under the Plan and, except as otherwise required by ERISA, the
Trustees, the Committee, and their respective agents assume no liability or
responsibility for payment of such benefits, and each Member, Former Member,
Surviving Spouse, Beneficiary or other person who shall claim the right to any
payment under the Plan shall be entitled to look only to the Trust for such
payment and shall not have any right, claim or demand therefor against the
Employer, the Committee or any member thereof, or any employee or director of
the Employer.
15.9 Credit for Qualified Military Service. Notwithstanding any provision
of the Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with Code
Section 414(u).
15.10 Gender. Whenever used in the Plan the masculine gender includes the
feminine gender and the singular includes the plural, unless the context
indicates otherwise.
15.11 Captions. The captions preceding the sections of the Plan have been
inserted solely as a matter of convenience and in no way define or limit the
scope or intent of any provisions of the Plan.
15.12 Governing Law. The Plan and all rights thereunder shall be governed
by and construed in accordance with ERISA and the laws of the State of New York.
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ARTICLE XVI
TOP HEAVY PROVISIONS
16.1 Top Heavy Plan.
(a) The Plan will be considered a Top Heavy Plan for any Plan Year
if it is determined to be a Top Heavy Plan as of the last day of the preceding
Plan Year (the "Determination Date").
(b) For any Plan Year, the Plan will be a Top Heavy Plan if any of
the following conditions exist:
(i) The Plan is not part of a Required Aggregation Group or
Permissive Aggregation Group and the Top Heavy Ratio for the Plan exceeds 60%.
(ii) The Plan is part of a Required Aggregation Group but not
part of a Top Heavy Ratio for the Required Aggregation Group exceeds 60%.
(iii) The Plan is part of a Required Aggregation Group and a
Permissive Aggregation Group and the Top Heavy Ratio for the Permissive
Aggregation Group exceeds 60%.
(c) Notwithstanding any other provision in the Plan, the provisions
of this Article XVI shall apply and supersede all other provisions in the Plan
during each Plan Year with respect to which the Plan is determined to be a Top
Heavy Plan.
16.2 Definitions. For purposes of this Article XVI and as otherwise used
in this Plan, the following terms shall have the meanings set forth below:
(a) "Valuation Date" means the Determination Date. Member's Account
Balance shall be valued on the Valuation Date for purposes of determining the
Top Heavy Ratio.
(b) "Required Aggregation Group" means (i) the group composed of
each qualified plan maintained by the Employer or any Affiliate in which at
least one Key Employee participates or participated in the Plan Year containing
the Determination Date or any of the four preceding Plan Years, regardless of
whether the plan has been terminated, and (ii) any other qualified plan
maintained by the Company or any Affiliate which enables a plan described in
clause (i) during the period tested to meet the requirements of Code Sections
401(a)(4) or 410(b).
(c) "Permissive Aggregation Group" means the Required Aggregation
Group plus any other qualified plan or plans maintained by the Company or any
Affiliate which, when considered as a group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410(b).
(d) "Key Employee" means a "Key Employee" as defined in Code Section
416(i)(1) and (5) and the Regulations thereunder. A "Non-Key Employee" means any
employee who is not a Key Employee.
(e) "Top Heavy Ratio"
(i) If the Employer maintains one or more defined
contributions plans and the Employer has not maintained any defined benefit
plan, which during the 5-year period ending on the Determination Date, has or
had accrued benefits, the Top Heavy Ratio for the Plan, or for the Required or
Permissive Aggregation Group, as appropriate, is a fraction, the numerator of
which is the sum of the account balances of all Key Employees as of the
Determination Date (including any part of any account balance distributed in the
5-year period ending on the Determination Date) and the denominator of which is
the sum of all account balances (including any part of any account balance
distributed in the 5-year period ending on the Determination Date), both
computed in accordance with Code Section 416 and the Regulations. Both the
numerator and denominator of the Top Heavy Ratio shall be increased to reflect
any contribution not actually made as of the Determination Date, but which is
required to be taken into account on that date under Code Section 416 and the
Regulations.
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(ii) If the Employer maintains one or more defined
contribution plans and the Employer maintains or has maintained one or more
defined benefit plans, which during the 5-year period ending on the
Determination Date, has or had any accrued benefits, the Top Heavy Ratio for any
Required or Permissive Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of account balances under the aggregated defined
contribution plans for all Key Employees, determined in accordance with (i)
above, and the present value of accrued benefits under the aggregated defined
benefit plans for all Key Employees as of the Determination Date, and the
denominator of which is the sum of the account balances under the aggregated
defined contribution plans for all Members, determined in accordance with (i)
above, and the present value of accrued benefits under the defined benefit plans
for all Members as of the Determination Date, all determined in accordance with
Code Section 416 and the Regulations. The accrued benefits under a defined
benefit plan in both the numerator and denominator of the Top Heavy Ratio shall
be increased for any distribution of an accrued benefit made in the 5-year
period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of account
balances and the present value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the 12-month period
ending on the Determination Date, except as provided in Code Section 416 and the
Regulations for the first and second plan years of a defined benefit plan. The
account balances and accrued benefits of a Member who is not a Key Employee but
who was a Key Employee in a prior year or who has not been credited with at
least one Hour of Service at any time during the 5-year period ending on the
Determination Date will be disregarded.
(iv) 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 Code Section 416 and the Regulations thereunder. Deductible
employee contributions will not be taken into account for purposes of computing
the Top Heavy Ratio. When aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination Dates
that fall within the same calendar year.
(v) The accrued benefit of a Non-Key Employee shall be
determined under (i) the method, if any, that uniformly applies for accrual
purposes under all defined benefit plans maintained by the Employer or (ii) if
there is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).
(f) "Super Top Heavy Plan" means a Top Heavy Plan which would
continue to be a Top Heavy Plan if 90% were substituted for 60% each place it
appears in the definition of Top Heavy Plan.
16.3 Minimum Contributions.
(a) Except as otherwise provided below, the Employer Contributions
allocated on behalf of any Member who is a Non-Key Employee (disregarding Basic
Salary Contributions and Matching Contributions) shall not be less than the
lesser of 3% of such Member's compensation or, if the Employer has no defined
benefit plan which designates this Plan to satisfy Code Section 401(a), the
largest percentage of Employer contributions, as a percentage of the Key
Employee's compensation, allocated on behalf of the Key Employee for that year;
provided, however, that if the highest allocation rate to a Key Employee for a
Plan Year is less than 3%, Basic Savings Contributions shall be included in
determining contributions made on behalf of Key Employees. The minimum
allocation shall be determined without regard to any Social Security
contribution and shall be made even though, under other Plan provisions, the
Member would not otherwise be entitled to receive an allocation for the Plan
Year because of the Member's failure to complete the requisite amount of
service. For purposes of this Plan Section 16.3, "compensation" means
compensation as defined in Regulation Section 1.415-2(d).
(b) The provisions of (a) above shall not apply to any Member who
was not employed by the Employer on the last day of the Plan Year or to any
Member to the extent he is covered under any other plan or plans of the Employer
and the Employer has provided that the minimum allocation or benefit requirement
applicable to Top Heavy plans will be met in such other plan or plans.
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(c) If the Plan is a Super Top Heavy Plan, the allocation of
Employer contributions (disregarding Basic Savings Contributions and Matching
Contributions) shall, in any Plan Year for any Member who is not a Key Employee,
be equal to the lesser of 4% of such Member's compensation or the percentage of
compensation for the Key Employee for whom such percentage is the highest for
such Plan Year (disregarding Basic Savings Contributions and Matching
Contributions).
(d) For the purpose of this Plan Section 16.3, all defined
contribution plans in the Required Aggregation Group shall be treated as a
single plan. If the Required Aggregation Group includes both a defined benefit
plan and the Plan, a minimum benefit shall be provided in the defined benefit
plan and offset by the benefit provided in the Plan.
16.4 Top Heavy Vesting.
(a) If the Plan is determined to be a Top Heavy Plan for a Plan
Year, then the following vesting schedule shall replace the vesting schedules
provided in Plan Section 4.5, unless a Member is vested more rapidly under Plan
Section 4.5:
Period of Service Nonforfeitable Interest
----------------- -----------------------
Less than 3 years 0%
3 years or more 100%
(b) If the Plan is subsequently determined to no longer be a Top
Heavy Plan in any Plan Year, then the foregoing vesting schedule shall not apply
to contributions credited to a Member's Account on or after the first day of the
first Plan Year in which the Plan is no longer Top Heavy; provided however, that
any Member with a Period of Service of three (3) or more years may irrevocably
elect to have his Account continue to vest in accordance with the vesting
schedule provided above in lieu of the vesting schedules provided in Plan
Section 4.5 in accordance with procedures established by the Committee within
the election period hereinafter described. The election period shall begin on
the date such amendment is adopted or the date such change is effective, as the
case may be, and shall end no earlier than the latest of the following dates:
(i) The date which is 60 days after the day such amendment is
adopted;
(ii) The date which is 60 days after the day such amendment or
change becomes effective; or
(iii) The date which is 60 days after the day the Member is
given written notice of such amendment or change by the Committee.
16.5 Combination of Plans. For each Plan Year that the Plan is a Top
Heavy Plan, 1.0 shall be substituted for 1.25 as the multiplicand of the dollar
limitation in determining the denominator of the defined benefit plan fraction
and of the defined contribution plan fraction for purposes of Plan Section 6.5
and Code Section 415(e).
16.6 Nonduplication of Benefits. Notwithstanding the foregoing, if,
with respect to a Non-Key Employee who in a Plan Year benefits under both a
defined contribution and defined benefit plan which are Top Heavy Plans
maintained by the Employer, a Top Heavy minimum benefit is provided to such
Non-Key Employee for such Plan Year under the defined benefit plan in accordance
with Code Section 416(c)(1), then the minimum contribution to this Plan,
pursuant to Plan Section 16.3 shall not be required.
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MEMORANDUM TO PLAN SECTIONS 2.41 AND 3.1
Notwithstanding Plan Sections 2.41 and 3.1, for purposes of eligibility
and vesting under the Plan, upon the terms and conditions as determined by the
Committee, each individual who becomes an Employee as the result of a
transaction between the Company and such individual's predecessor employer shall
receive credit for his prior employment with such predecessor employer for
purposes of determining his Period of Service and shall be eligible to
participate in the Plan as of the date such individual first performs an Hour of
Service with the Company.
38
