Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------------------
Selective Insurance Group, Inc.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2168890
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 Wantage Avenue, Branchville, New Jersey 07890
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(Address of Principal Executive Offices) (Zip Code)
Selective Insurance Retirement Savings Plan
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(Full title of the plan)
Thornton R. Land, Esq.
Executive Vice President, Administration and General Counsel
Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, New Jersey 07890
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(Name and address of agent for service)
(201) 948-3000
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(Telephone number, including area code, of agent for service)
Copies to:
Stewart E. Lavey, Esq.
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962
Calculation of Registration Fee
- ----------------------------------------------------------------------------
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price per offering registra-
registered(1) registered share(2) price(2) tion fee
- ------------- ---------- --------- -------- ---------
Common Stock, 500,000 $32.375 $16,187,500 $5581.90
$2.00 par value shares
(including
Series A Junior
Preferred Stock
purchase rights)(3)
- -----------------------------------------------------------------------------
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of interests
to be offered or sold pursuant to the Selective Insurance Retirement Savings
Plan, described herein.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(h) based on the average of the high and low price
per share as reported on the Nasdaq National Market on August 15, 1996.
(3) Prior to the occurrence of certain events, purchase rights for units of
Series A Junior Preferred Stock will not be evidenced separately from the
Common Stock.
PAGE I-1
Part I
------
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
----------------------------------------------------
Documents relating to the Selective Insurance Retirement Savings Plan
(the "Plan") and containing the information specified in Part I of Form S-8
will be sent or given to participants in the Plan, as specified by Rule
428(b)(1), and are not filed as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These
documents, and the documents incorporated by reference in the registration
statement pursuant to Item 3 of Part II of Form S-8, taken
together,constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended (the "Securities Act").
PAGE II-1
Part II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
--------------------------------------------------
Item 3. Incorporation of Documents by Reference.
----------------------------------------
The following documents, which have been filed by the registrant
with the Securities and Exchange Commission, are hereby incorporated by
reference:
(i) the registrant's Annual Report on Form 10-K for the year
ended December 31, 1995;
(ii) the registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996; and
(iii) the registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996; and
(iv) the descriptions of the registrant's common stock, par
value $2.00 per share (the "Common Stock"), and purchase
rights for units of Series A Junior Preferred Stock
associated with Common Stock set forth in the registrant's
Registration Statements filed pursuant to Section 12 of
the Securities and Exchange Act of 1934 (the "Exchange
Act") and any amendment or report filed for the purpose of
updating those descriptions.
All documents filed by the registrant pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed modified or superseded for purposes hereof
to the extent that a statement contained herein or in any other subsequently
filed document which is also incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
Item 4. Description of Securities.
--------------------------
Not Applicable
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
None.
PAGE II-2
Item 6. Indemnification of Directors and Officers.
------------------------------------------
The registrant is organized under the laws of the State of New
Jersey. The New Jersey Business Corporation Act, as amended (the "Act"),
provides that a New Jersey corporation has the power generally to indemnify
its directors, officers, employees and other agents against expenses and
liabilities in connection with any proceeding involving such person by reason
of his being a corporate agent, other than a proceeding by or in the right of
the corporation, if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, such person had no
reasonable cause to believe his conduct was unlawful. In the case of an
action brought by or in the right of the corporation, indemnification of
directors, officers, employees and other agents against expenses is permitted
if such person acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation; however, no
indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation,
unless and only to the extent that the New Jersey Superior Court, or the
court in which such proceeding was brought, shall determine upon application
that despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
such indemnification. Expenses incurred by a director, officer, employee or
other agent in connection with a proceeding may be, under certain
circumstances, paid by the corporation in advance of the final disposition of
the proceeding as authorized by the board of directors. The power to
indemnify and advance expenses under the Act does not exclude other rights to
which a director, officer, employee or other agent of the corporation may be
entitled to under the certificate of incorporation, by-laws, agreement, vote
of stockholders, or otherwise provided that no indemnification is permitted
to be made to or on behalf of such person if a judgment or other final
adjudication adverse to such person establishes that his acts or omissions
were in breach of his duty of loyalty to the corporation, were not in good
faith or involved a violation of the law, or resulted in the receipt by such
person of an improper personal benefit.
Under the Act, a New Jersey corporation has the power to purchase
and maintain insurance on behalf of any director, officer, employee or other
agent against any expenses incurred in any proceeding and any liabilities
asserted against him by reason of his being or having been a corporate agent,
whether or not the corporation has the power to indemnify him against such
expenses and liabilities under the Act. All of the foregoing powers granted
to a New Jersey corporation may be exercised by such corporation
notwithstanding the absence of any provision in its certificate of
incorporation or by-laws authorizing the exercise of such powers. However, a
New Jersey corporation may, with certain limitations,
PAGE II-3
provide in its certificate of incorporation that a director or officer shall
not be personally liable, or shall be liable only to the extent therein
provided, to the corporation or its shareholders for damages for breach of a
duty owed to the corporation or its shareholders.
Reference is made to Sections 14A:3-5 and 14A:2-7(3) of the Act
in connection with the above summary of indemnification and insurance.
Section (a) of Article NINTH of the registrant's Restated
Certificate of Incorporation, as amended, and Section 14 of the registrant's
By-Laws, as amended, provide generally that a director shall not be
personally liable to the registrant or its stockholders for damages from
breach of any duty owed to the registrant or its stockholders, except to the
extent such personal liability may not be eliminated or limited under the
Act. Such provisions further provide generally that an officer of the
registrant shall not be personally liable to the registrant or its
stockholders for damages or breach of any duty owed to the registrant or its
stockholders, except to the extent and for the duration of any period of time
such personal liability may not be eliminated or limited under the Act.
Section (b) of Article NINTH of the registrant's Restated
Certificate of Incorporation, as amended, and Section 14 of the registrant's
By-Laws, as amended, provide generally that each person who was or is made a
party to or involved in a pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding, or any appeal
therein or any inquiry or investigation which could lead to such action, suit
or proceeding of the registrant or any constituent corporation absorbed by
the registrant in a consolidation or merger, or by reason of his/her having
been a director, officer, trustee, employee or agent of another entity
serving as such person, shall be indemnified and held harmless by the
registrant to the fullest extent permitted by the Act, as amended (but, in
the case of any amendments, only to the extent such amendment permits the
registrant to provide broader indemnification rights than the Act permitted
prior to such amendment). Such provisions of the Restated Certification of
Incorporation, as amended, and By-Laws, as amended, of the registrant
provide, under certain circumstances, for a right to be paid by the
registrant the expenses incurred in any proceeding in advance of the final
disposition of such proceeding as authorized by the board of directors.
Further, the registrant is authorized to purchase and maintain insurance on
behalf of any director, officer, employee or agent of the registrant against
any expenses incurred and any liabilities asserted against him/her in any
proceeding by reason of such person having been a director, officer, employee
or agent, whether or not the registrant would have the power to indemnify
such person.
PAGE II-4
The directors and officers of the registrant are insured by
policies purchased by the registrant against liability and expenses incurred
in their capacity as directors or officers.
Item 7. Exemption from Registration Claimed.
------------------------------------
Not applicable.
Item 8. Exhibits.
---------
4.1 Restated Certificate of Incorporation of Selective
Insurance Group, Inc., as amended, (incorporated herein by
reference to Exhibit 3.1 to the registrant's Annual Report
on Form 10-K for the year ended December 31, 1994).
4.2 By-Laws of Selective Insurance Group, Inc. (incorporated
herein by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the year ended December 31,
1994).
4.3 Selective Insurance Retirement Savings Plan, as amended.
5 Opinion of Shanley & Fisher, P.C. The registrant hereby
undertakes to submit the Selective Insurance Retirement
Savings Plan, as amended (the "Plan"). and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely
manner and will make all changes required by the IRS in
order to qualify the Plan.
23.1 Consent of Shanley & Fisher, P.C. (included in Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney.
28 Information from reports furnished to state insurance
regulatory authorities (incorporated herein by reference to
Combined 1995 Statutory Schedule P for the registrant,
Exhibit 28 to the registrant's Annual Report on Form 10-K
for the year ended December 31, 1995).
Item 9. Undertakings.
-------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
PAGE II-4
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
registration statement or any material change to such information in the
registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of
an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed a new registration statement relating
to the securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
PAGE II-6
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
PAGE II-7
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Borough of Branchville, State of New Jersey
on the 15th day of August, 1996.
SELECTIVE INSURANCE GROUP, INC.
By: /s/ James W. Entringer
----------------------
James W. Entringer
Chairman of the Board,
President and Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
Signature Capacity in Which Signed
--------- ------------------------
/s/ James W. Entringer Chairman of the Board,
------------------ President and Chief
James W. Entringer Executive Officer and
Director
/s/ Gregory E. Murphy Senior Vice President
----------------- and Chief Financial Officer
Gregory E. Murphy (principal financial and
accounting officer)
/s/ A. David Brown* Director
---------------
A. David Brown
/s/ William A. Dolan, II* Director
---------------------
William A. Dolan, II
/s/ William C. Gray, D.V.M.* Director
------------------------
William C. Gray, D.V.M.
PAGE II-8
/s/ C. Edward Herder* Director
-----------------
C. Edward Herder
/s/ Frederick H. Jarvis* Director
--------------------
Frederick H. Jarvis
/s/ William M. Kearns, Jr.* Director
-----------------------
William M. Kearns, Jr.
/s/ Joan Lamm-Tennant, Ph.D.* Director
-------------------------
Joan Lamm-Tennant, Ph.D.
/s/ S. Griffin McClellan III* Director
-------------------------
S. Griffin McClellan III
/s/ Russell R. Moffett* Director
-------------------
Russell R. Moffett
/s/ William M. Rue* Director
---------------
William M. Rue
/s/ Thomas D. Sayles, Jr.* Director
----------------------
Thomas D. Sayles, Jr.
/s/ J. Brian Thebault* Director
------------------
J. Brian Thebault
*James W. Entringer hereby signs this Registration Statement on Form S-8 on
behalf of each of the indicated persons for whom he is attorney-in-fact on
August 15, 1996 pursuant to a power of attorney filed herewith.
By: /s/ James W. Entringer
------------------
James W. Entringer
Attorney-in-Fact
Dated: August 15, 1996
PAGE II-9
Pursuant to the requirements of the Securities Act of 1933, the
Committee under the Selective Insurance Retirement Savings Plan has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of Branchville, State
of New Jersey on the 15th day of August, 1996.
SELECTIVE INSURANCE RETIREMENT
SAVINGS PLAN
By: /s/ Thomas D. Sayles, Jr.*
----------------------
Thomas D. Sayles, Jr.
By: /s/ S. Griffin McClellan III*
-------------------------
S. Griffin McClellan III
*James W. Entringer hereby signs this Registration Statement on Form S-8 on
behalf of the indicated persons for whom he is attorney-in-fact on August 15,
1996 pursuant to a power of attorney filed herewith.
By:/s/ James W. Entringer
------------------
James W. Entringer
Attorney-in-Fact
PAGE - EXHIBIT INDEX
EXHIBIT INDEX
-------------
Exhibit Page
- -------
4.3 Selective Insurance Retirement Savings Plan, as amended
5 Opinion of Shanley & Fisher, P.C.
23.1 Consent of Shanley & Fisher, P.C. (included
in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
24 Powers of Attorney
PAGE i
SELECTIVE INSURANCE COMPANY OF AMERICA
RETIREMENT SAVINGS PLAN
(As Amended and Restated
Effective July 1, 1993)
TABLE OF CONTENTS
-----------------
Article I. The Plan
--------------------
1.1 Establishment of Plan 1
1.2 Purpose of Plan 2
1.3 Applicability of Plan 2
Article II. Definitions
------------------------
2.1 Accounts 3
2.2 Act 3
2.3 Affiliate 3
2.4 After-Tax Contributions 3
2.5 Alternate Payee 3
2.6 Annual Addition 3
2.7 Annuity Starting Date 4
2.8 Authorized Leave of Absence 4
2.9 Beneficiary 4
2.10 Board 4
2.11 Code 4
2.12 Committee 4
2.13 Company 4
2.14 Compensation 5
2.15 Computation Period 6
2.16 Defined Benefit Fraction 6
2.17 Defined Contribution Fraction 6
2.18 Determination Date 6
2.19 Disability 6
2.20 Disability Retirement Date 6
2.21 Domestic Relations Order 6
2.22 Early Retirement Date 7
2.23 Elective Contributions 7
2.24 Elective Contributions Account 7
2.25 Eligible Employee 7
2.26 Employee 7
2.27 Employment Commencement Date 7
2.28 Entry Date 7
2.29 Exchange Plan 7
2.30 Highly Compensated Employee 8
2.31 Hour of Service 9
2.32 Investment Funds 12
2.33 Key Employee 12
2.34 Leased Employee 12
2.35 Leasing Organization 12
2.36 Leasing Organization Pension Plan 12
PAGE ii
TABLE OF CONTENTS
-----------------
(Continued)
2.37 Matched After-Tax Contributions 12
Account
2.38 Matching Contributions 13
2.39 Matching Contributions Account 13
2.40 Member 13
2.41 Normal Retirement Age 13
2.42 Normal Retirement Date 13
2.43 One-Year Period of Severance 13
2.44 Participating Company 14
2.45 Participating Group 14
2.46 Plan 14
2.47 Plan Year 14
2.48 Qualified Domestic Relations Order 14
2.49 Qualified Matching Contributions 14
2.50 Qualified Matching Contributions 14
Account
2.51 Qualified Nonelective Contributions 14
2.52 Qualified Nonelective Contributions 15
Account
2.53 Related Person 15
2.54 Rollover Account 15
2.55 Salary Reduction Agreement 15
2.56 Severance from Service 15
2.57 Supplement 15
2.58 Termination of Employment 16
2.59 Trust or Trust Fund 16
2.60 Trust Agreement 16
2.61 Trustee 16
2.62 Unmatched After-Tax Contributions 16
Account
2.63 Valuation Date 16
2.64 Vested Balance 16
Article III. Participation and
-------------------------------
Service
-------
3.1 Eligible Employee 17
3.2 Commencement of Membership 17
3.3 Enrollment Form 17
3.4 Eligibility for Contributions 17
3.5 Reemployed Members 19
3.6 Cessation of Membership 19
3.7 Year of Service 19
3.8 Beneficiary Designation 21
PAGE iii
TABLE OF CONTENTS
-----------------
(Continued)
Article IV. Contributions and
------------------------------
Allocations
-----------
4.1 Elective Contributions 23
4.2 After-Tax Contributions 23
4.3 Matching Contributions 24
4.4 Salary Reduction Agreement 25
4.5 Qualified Nonelective Contributions 25
4.6 Qualified Matching Contributions 26
4.7 Limitation on Contributions 26
4.8 Change and Suspension of 27
Contributions
4.9 Maximum Elective Amount 27
4.10 Limitation on Elective Contributions 28
4.11 Adjustment of Elective Contributions 28
During Plan Year
4.12 Excess Elective Contributions After 29
Plan Year
4.13 Limitation on Matching Contributions 30
and After-Tax Contributions
4.14 Excess Matching Contributions and 31
After-Tax Contributions After
Plan Year
4.15 Application of General 32
Nondiscrimination Requirements
4.16 Restriction on Multiple Use of 32
Alternative Limit
4.17 Limitation of Annual Additions 33
4.18 Return of Contributions 36
4.19 Rollover Amounts 37
4.20 Transfer Accounts 38
Article V. Member Accounts;
----------------------------
Investment Funds
----------------
5.1 Establishment of Member's 39
Accounts
5.2 Investment Funds 39
5.3 Investment Election By 39
Members
5.4 Plan Expenses 41
5.5 Valuations; Allocation of 41
Investment Earnings and Losses
PAGE iv
TABLE OF CONTENTS
-----------------
(Continued)
Article VI. Vesting and Forfeitures
------------------------------------
6.1 Vesting in Elective Contributions 43
Account, After-Tax Contributions,
Qualified Nonelective Contributions
Account, Qualified Matching
Contributions Account, and
Rollover Account
6.2 Vesting in Matching Contributions 43
Account
6.3 Forfeitures 43
6.4 Reinstatement of Forfeited Amounts 44
6.5 Calculation of Vested Interest Upon 44
Distribution or Withdrawal
Article VII. Distributions
---------------------------
7.1 Normal or Early Retirement 45
7.2 Disability Retirement 45
7.3 Distribution Upon Death of 45
Member
7.4 Distributions Upon a Termination 46
of Employment for Other Causes
7.5 Form and Timing of Distributions 46
7.6 Minimum Distribution Requirements 48
7.7 Withdrawals of Elective 50
Contributions
7.8 Withdrawals from After-Tax 51
Contributions Account
7.9 Withdrawals on Account of Serious 52
Financial Hardship, from all
Accounts Except Elective
Contributions Account
7.10 Withdrawals After Age 59 1/2 52
7.11 Provisions Applicable to 52
All Withdrawals
Article VIII. Loans to Members
-------------------------------
8.1 Committee Authorized 54
to Make Loans
8.2 Amount and Number of Loans 54
8.3 Interest 55
8.4 Term 55
PAGE v
TABLE OF CONTENTS
-----------------
(Continued)
8.5 Repayment 55
8.6 Loan Treated as Member's 56
Investment
8.7 Documents 56
8.8 Default 56
Article IX. Administration of the
----------------------------------
Plan
----
9.1 Committee 58
9.2 Compensation and Expenses 58
9.3 Manner of Action 58
9.4 Chairman, Secretary, and 58
Employment of Specialists
9.5 Records 59
9.6 Administration 59
9.7 Application for Benefits 60
9.8 Appeals from Denial of Claims 60
9.9 No Enlargement of Employee Rights 61
9.10 Expenses of Administration 61
9.11 Facility of Distribution 61
9.12 Indemnity 62
9.13 Non-Alienation 62
Article X. Amendment; Termination;
-----------------------------------
Merger
------
10.1 Right to Amend or Terminate 63
10.2 Amendment for Tax Exemption 63
10.3 Terminations and Partial 63
Terminations
10.4 Mergers; Consolidations; 64
Transfers of Assets
Article XI. Leased Employees
-----------------------------
11.1 Treatment of Leased Employees 65
Under the Plan
11.2 Service Not Counted 66
11.3 Definitions 66
11.4 Construction 67
PAGE vi
TABLE OF CONTENTS
-----------------
(Continued)
Article XII. Top-Heavy Plan
----------------------------
Provisions
----------
12.1 General Rule 68
12.2 When Plan is Top-Heavy 68
12.3 When Plan is in Top-Heavy Group 68
12.4 Minimum Contribution 69
12.5 Adjustment in Maximum Limitation 70
on Account Additions
12.6 Definitions 70
12.7 Top-Heavy Vesting Schedule 70
Article XIII. Qualified Domestic
---------------------------------
Relations Orders
-----------------
13.1 Applicability of Article 72
13.2 Establishment of Procedures 72
13.3 Determination of Qualified Domestic 72
Relations Order Status
13.4 Establishment of Segregated Accounts 72
and Payment Procedures
13.5 Subsequent Determination or Order 74
to be Applied Prospectively
13.6 Withdrawals, Distributions, and 75
Loans by or to Members
13.7 Investment 75
13.8 Definitions 75
Article XIV. Miscellaneous Provisions
--------------------------------------
14.1 Construction 76
14.2 Nonassignability 76
14.3 Missing Persons 76
14.4 Interest of Members 76
14.5 No Right to Employment Granted 77
by Plan
14.6 Incompetency 77
14.7 Titles 77
Appendix A A1
----------
Supplement One S1
--------------
PAGE 1
Article I. The Plan
--------------------
1.1 Establishment of Plan. Selected Risks Insurance Company
and Subsidiaries established a profit sharing plan effective July 1, 1980.
Such plan was amended and restated effective January 1, 1985 in order to
conform to the requirements of the Tax Equity and Fiscal Responsibility Act
of 1982, the Deficit Reduction Act of 1984, and the Retirement Equity Act of
1984, and to make certain other changes. Selected Risks Insurance Company
subsequently changed its name to Selective Insurance Company of America. The
plan was amended and restated effective January 1, 1989 to comply with
provisions of the Tax Reform Act of 1986, the Technical and Miscellaneous
Revenue Act of 1988, and final Treasury regulations under Code
section 401(m), and to make certain other legal and design changes, and was
known as the Thrift Plan for Employees of Selective Insurance Company of
America (Formerly: Selected Risks Insurance Company) and Subsidiaries (the
"Plan"). The Plan was again amended effective January 1, 1993.
Effective July 1, 1993 the Exchange Insurance Company 410(k) Plan is merged
into the Plan in accordance with Internal Revenue Code section 414(l), and
its specific provisions are included in a supplement, the terms of which are
applicable to certain former participants in the Exchange Insurance Company
401(k) Plan. In addition, effective July 1, 1993, the Plan is amended and
restated to add a salary deferral opportunity for Eligible Employees, to make
certain other design changes, and to change the name of the Plan to the
SELECTIVE INSURANCE COMPANY OF AMERICA RETIREMENT SAVINGS PLAN.
PAGE 2
1.2 Purpose of Plan. The purpose of the Plan is to allow
Members to elect to set aside a portion of their salaries on a pre-tax basis
and/or an after-tax basis in order to accumulate capital for their
retirement, and to encourage Employee savings by matching such savings with
Company contributions. The Plan is a profit-sharing plan and the Plan is
intended to meet the applicable requirements of sections 401(a), 401(k), and
401(m) of the Internal Revenue Code of 1986, as amended.
1.3 Applicability of Plan. The provisions of this restated
Plan document are applicable only to Eligible Employees in the employ of the
Company on or after July 1, 1993.
PAGE 3
Article II. Definitions
------------------------
Whenever used in the Plan, the following terms shall have the meanings set
forth below unless otherwise expressly provided.
2.1 "Accounts" shall mean the Elective Contributions Account,
Matching Contributions Account, Matched After-Tax Contributions Account,
Unmatched After-Tax Contributions Account, Qualified Nonelective
Contributions Account, Qualified Matching Contributions Account, and Rollover
Account established for a Member under the Plan.
2.2 "Act" shall mean the Employee Retirement Income Security
Act of 1974, as in effect at the time with respect to which such term is
used.
2.3 "Affiliate" shall mean any corporation, trade, or business
if it and the Company are members of a controlled group of corporations, are
under common control, or are members of an affiliated service group, within
the meaning of Code sections 414(b), 414(c), and 414(m), respectively. The
term "Affiliate" shall also include any other entity required to be
aggregated with the Company pursuant to regulations under Code
section 414(o). Notwithstanding anything above to the contrary, for purposes
of section 4.17, "Affiliate" status shall be determined in accordance with
Code section 415(h).
2.4 "After-Tax Contributions" shall mean contributions made
under section 4.2 and shall be either Matched After-Tax Contributions or
Unmatched After-Tax Contributions.
2.5 "Alternate Payee" shall mean any individual described in
section 13.8(a).
2.6 "Annual Addition" shall have the meaning set forth in
section 4.17(c)(1).
PAGE 4
2.7 "Annuity Starting Date" shall mean the first day on which
all events have occurred which entitle the Member to commence benefits under
the Plan.
2.8 "Authorized Leave of Absence" shall mean any extraordinary
absence authorized by the Company, under the Company's standard personnel
practices, provided that all persons under similar circumstances must be
treated alike in the granting of such Authorized Leaves of Absence and
provided further that the Employee returns to employment with the Company
within the period of authorized absence. An absence due to service in the
Armed Forces of the United States shall be considered an Authorized Leave of
Absence, provided that the absence is caused by war or other emergency, or
provided that the Employee is required to serve under the laws of
conscription in time of peace, and further provided that the Employee returns
to employment with the Company within the period provided by law.
2.9 "Beneficiary" shall mean the person or persons designated
under section 3.8.
2.10 "Board" shall mean the Board of Directors of Selective
Insurance Company of America.
2.11 "Code" shall mean the Internal Revenue Code of 1986, as in
effect at the time with respect to which such term is used.
2.12 "Committee" shall mean the committee appointed under the
terms of section 9.1.
2.13 "Company" shall mean Selective Insurance Company of America,
and with the approval of the Board any other Affiliate which adopts the Plan
for the benefit of its employees and is designated a Participating Company
hereunder.
PAGE 5
2.14 "Compensation" shall mean a Member's pay, determined as
follows:
(a) In General. For all purposes of the Plan, except as
otherwise specified, Compensation shall mean the basic earnings
paid to an Employee by the Company, excluding all overtime pay
and bonuses, provided, however, that the term Compensation
shall include Elective Contributions under section 4.1 of this
Plan and salary reduction amounts under a cafeteria plan
pursuant to Code section 125, but shall not include any other
contributions or benefits paid under this Plan.
(b) Special Rule for Limits on Elective, After-Tax, and Matching
Contributions and for Determining Highly Compensated Employees.
For purposes of satisfying the limits on contributions
described in sections 4.10 and 4.13 and for purposes of
determining Highly Compensated Employees under section 2.30,
Compensation shall mean an Employee's compensation as defined
in Code section 415(c)(3) and the applicable Treasury
regulations thereunder, increased by amounts attributable to
the Employee's salary reduction amounts under a cafeteria plan
under Code section 125 and Elective Contributions under section
4.1 of this Plan.
Notwithstanding the foregoing, for purposes of sections 4.10
and 4.13, the Company may use compensation as reported in Box 10 on
Form W-2, or any alternative definition that may be permitted under
Treasury regulations in lieu of compensation as defined in Code
section 415(c)(3).
(c) Special Rules for Top-Heavy. For purposes of the top-
heavy provisions of Article XII, Compensation shall mean an
Employee's compensation as defined in Code section 415(c)(3)
and the applicable Treasury regulations thereunder.
PAGE 6
The maximum amount of Compensation taken into account under the Plan for any
Plan Year shall be $200,000, or such other amount as is determined by the
Secretary of the Treasury to reflect a cost-of-living adjustment under the
last sentence of Code section 401(a)(17). In determining the Compensation of
an Employee for purposes of this limitation, the rules of Code section
414(q)(6) shall apply, except in applying such rules, the term "family" shall
include only the Employee's spouse and any lineal descendants of the Employee
who have not attained age 19 before the close of the Plan Year.
2.15 "Computation Period" shall mean the Plan Year.
2.16 "Defined Benefit Fraction" shall have the meaning set forth
in section 4.17(c)(2).
2.17 "Defined Contribution Fraction" shall have the meaning set
forth in section 4.17(c)(3).
2.18 "Determination Date" shall have the meaning set forth in
section 12.6(a).
2.19 "Disability" shall mean the inability to engage in any
substantial gainful activity by reason of any medically determinable physical
or mental impairment that can result in death or to be of long, continued,
and indefinite duration. Such determination of Disability shall be made by
the Committee with the advice of competent medical authority. All Members in
similar circumstances shall be treated alike.
2.20 "Disability Retirement Date" shall mean the first day of the
month after the Committee has determined that a Member's incapacity is a
Disability.
2.21 "Domestic Relations Order" shall have the meaning set forth
in section 13.8(b).
PAGE 7
2.22 "Early Retirement Date" shall mean the first day of any
month (prior to Normal Retirement Date) coinciding with or following the date
on which a Member terminates employment with the Company after attaining age
fifty-five and completing at least ten Years of Service.
2.23 "Elective Contributions" shall mean contributions made under
section 4.l and shall be either Matched Elective Contributions or Unmatched
Elective Contributions.
2.24 "Elective Contributions Account" shall mean the Account
established for a Member to which Matched Elective Contributions, Unmatched
Elective Contributions, and earnings thereon are credited.
2.25 "Eligible Employee" shall mean an Employee described in
section 3.1, except an Employee who is working in a unit subject to
collective bargaining, unless the applicable collective bargaining agreement
otherwise provides and retirement benefits were the subject of good faith
bargaining. The exception for an Employee in a unit subject to collective
bargaining shall only be applicable during the period the Employee is working
in such unit.
2.26 "Employee" shall mean any individual employed by the Company
except an individual employed as an independent contractor and an individual
who is a Leased Employee.
2.27 "Employment Commencement Date" shall mean the date on which
an Employee first performs an Hour of Service for the Company.
2.28 "Entry Date" shall mean the first day of each calendar
month.
2.29 "Exchange Plan" shall mean the Exchange Insurance Company
401(k) Plan, effective July 1, 1986.
PAGE 8
2.30 "Highly Compensated Employee" shall mean--
(a) An individual who during the prior Plan Year or the current
Plan Year--
(1) Was at any time a 5 percent owner (as defined in
Code section 416(i)(1)) of the Company and/or
its Affiliates;
(2) Received Compensation from the Company and/or
its Affiliates in excess of $75,000 (or such
other amount as the Secretary of the Treasury
shall prescribe);
(3) Received Compensation from the Company and/or
its Affiliates in excess of $50,000 (or such
other amount as the Secretary of the Treasury
shall prescribe) and was in the group of
Employees for such year consisting of the top 20
percent of the Employees when ranked on the
basis of Compensation paid during such year; or
(4) Was at any time an officer of the Company and/or
its Affiliates and received Compensation greater
than 50 percent of the amount in effect under
Code section 415(b)(1)(A) for such year. For
purposes of this paragraph (4), no more than 50
Employees (or if lesser, the greater of three
Employees or 10 percent of the Employees) shall
be treated as officers. If for any year no
officer of the Company and/or its Affiliates is
described in this paragraph (4), the highest
paid officer of the Company and/or its
Affiliates shall be treated as described in this
paragraph (4).
In the case of the current Plan Year, an Employee not
described in paragraphs (2), (3), or (4) above during the
prior Plan Year shall not be treated as described in
paragraphs (2), (3), or (4) unless such Employee is a member
of the group consisting of the 100 Employees paid the
greatest Compensation during the current Plan Year.
PAGE 9
(b) If any individual is a member of the family of a 5 percent
owner or of a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid the
greatest Compensation during the year, then--
(1) Such individual shall not be considered a
separate Employee; and
(2) Any Compensation paid to such individual (and
any applicable contribution or benefit on behalf
of such individual) shall be treated as if it
were paid to (or on behalf of) the 5 percent
owner or Highly Compensated Employee in the
group consisting of the ten Highly Compensated
Employees paid the greatest Compensation during
the year.
For purposes of this section, the term "family" means, with
respect to any Employee, such Employee's spouse and lineal
ascendants or descendants and the spouses of such lineal
ascendants or descendants.
(c) A former Employee shall be treated as a Highly Compensated
Employee if--
(1) Such Employee was a Highly Compensated Employee
when such Employee separated from service, or
(2) Such Employee was a Highly Compensated Employee
at any time after attaining age 55.
2.31 "Hour of Service."
(a) General Rule. The words "Hour of Service" shall mean each
hour for which the Employee is directly or indirectly paid
or entitled to payment by the Company or an Affiliate:
(l) for the performance of duties,
(2) on account of a period of time during which no
duties are performed (irrespective of whether
the employment relationship has terminated) due
to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, or
Authorized Leave of Absence, or
PAGE 10
(3) for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by
the Company;
provided, however, that no hour shall be credited as an Hour
of Service under more than one of the preceding paragraphs.
(b) Applicable Computation Period.
(l) Hour of Service described in subsection (a)(1)
shall be credited to the Computation Period in
which the duties are performed.
(2) Hour of Service described in subsection (a)(2)
shall be credited to the Computation Period in
which the Employee is compensated for such Hour
of Service.
(3) Hour of Service described in subsection (a)(3)
shall be credited to the Computation Period to
which the award, agreement, or payment is made.
(4) Notwithstanding anything to the contrary in
subsection (a)(1), (a)(2), or (a)(3), in the
case of Hours of Service to be credited to the
Employee in connection with a payroll period of
no more than 31 days which extends beyond the
end of a Computation Period, all such Hours of
Service shall be credited to the following
computation period.
(c) Hours Not Counted. This subsection limits the Hours of
Service credited for periods during which no duties are
performed and applies whether or not Hours of Service
otherwise would have been counted for such periods under
subsection (a)(2).
(1) Unpaid Time. An hour for which an Employee is
not paid, either directly or indirectly, shall
not be credited except in the case of an
Authorized Leave of Absence.
PAGE 11
(2) Workers' Compensation, Disability Insurance,
Unemployment Compensation. An hour for which an
Employee is directly or indirectly paid or
entitled to payment on account of a period
during which the Employee performed no duties:
(A) may be credited in the sole discretion of
the Committee if such payment is made or due
under a plan maintained solely for the purposes
of complying with an applicable workers'
compensation or disability insurance law, but
(B) shall not be credited if such payment is
made or due under a plan maintained solely for
the purpose of complying with an applicable
unemployment compensation law.
(3) Medical Reimbursement. Hours of Service shall
not be credited for a payment which solely
reimburses the Employee for medical or
medically-related expenses incurred by the
Employee.
(4) 501 Hour Limitation. Not more than 501 Hours of
Service shall be credited under subsection
(a)(2) on account of any single period during
which the Employee performs no duties (whether
or not such period occurs in a single calendar
year).
(d) Military Service. An Employee shall receive one Hour of
Service for each hour of the normally scheduled work hours
for each day during any period he or she is on leave of
absence from work with the Company or Affiliate for military
service with the armed forces of the United States, but not
to exceed the period required under the law pertaining to
veterans' reemployment rights; provided that if the Employee
fails to report for work at the end of such leave during
which he or she has reemployment rights, such Employee shall
not receive credit for hours on such leave.
PAGE 12
(e) Construction. This section is intended to be consistent
with the requirements of paragraphs (b) and (c) of section
2530.200b-2 of the Department of Labor regulations and such
regulations are incorporated herein by this reference.
2.32 "Investment Funds" shall mean the fund or funds established
under the Trust Fund by the Committee for investment of Members' Accounts
under section 5.2.
The Board and the Committee shall have the right to terminate
particular Investment Funds and the right to establish particular Investment
Funds from time to time to implement and carry out investment objectives and
policies established by the Company and the Committee. The Board and the
Committee may from time to time eliminate or liquidate Investment Funds by
providing at least 30 days' written notice to the Trustee and Members that
the fund or funds will in the future cease to be an Investment Fund.
2.33 "Key Employee" shall mean any individual described in
section 12.6(b).
2.34 "Leased Employee" shall mean any individual described in
section 11.3(a).
2.35 "Leasing Organization" shall mean any entity described in
section 11.3(b).
2.36 "Leasing Organization Pension Plan" shall mean any plan
described in section 11.3(c).
2.37 "Matched After-Tax Contributions Account" shall mean the
Account established for a Member to which Matched After-Tax Contributions and
earnings thereon are credited.
PAGE 13
2.38 "Matching Contributions" shall mean contributions made by
the Company under section 4.3.
2.39 "Matching Contributions Account" shall mean the account for
each Member to which Matching Contributions and the earnings thereon are
credited.
2.40 "Member" shall mean an Employee who has become a Member
under Article III, and shall include a former Employee (and the Beneficiary
of a deceased Employee) until his or her Vested Balance has been fully
distributed.
2.41 "Normal Retirement Age" shall mean the date the Member
attains age sixty-five.
2.42 "Normal Retirement Date" shall mean the first day of the
month coinciding with or next following the date a Member attains his Normal
Retirement Age.
2.43 "One-Year Period of Severance."
(a) A One-Year Period of Severance means a twelve-consecutive-
month period beginning on the date an Employee incurs a
Severance from Service and ending on each anniversary of
such date, provided that the Employee does not perform an
Hour of Service for the Company or any Affiliate during such
period.
(b) Solely for purposes of determining whether a One-Year Period
of Severance has occurred, in the case of an Employee who is
absent from work beyond the first anniversary of the first
date of an absence and the absence is for maternity or
paternity reasons, the date the Employee incurs a Severance
from Service shall be the second anniversary of the
Employee's absence from employment. The period between the
first and second anniversary of the first date of absence
will not constitute a Year of Service. For purposes of this
subsection, an absence from work for maternity or
PAGE 14
paternity reasons means an absence (1) by reason of
pregnancy of the Employee, (2) by reason of the birth of a
child of the Employee, (3) by reason of the placement of a
child with the Employee in connection with the adoption of
such child by such Employee, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement.
2.44 "Participating Company" shall mean those Affiliates set
forth in Appendix A attached hereto.
2.45 "Participating Group" shall mean each separate group of
Employees which is classified by the Company by specific function, location,
or otherwise as constituting a separate Participating Group covered by the
Plan, as set forth in the applicable Supplement.
2.46 "Plan" shall mean the Selective Insurance Company of America
Retirement Savings Plan.
2.47 "Plan Year" shall mean the calendar year.
2.48 "Qualified Domestic Relations Order" shall mean any Domestic
Relations Order described in section 13.8(c).
2.49 "Qualified Matching Contributions" shall mean contributions
made under section 4.6.
2.50 "Qualified Matching Contributions Account" shall mean the
Account established for a Member to which Qualified Matching Contributions
Account and earnings thereon are credited.
2.51 "Qualified Nonelective Contributions" shall mean
contributions made under section 4.5.
PAGE 15
2.52 "Qualified Nonelective Contributions Account" shall mean the
Account established for a Member to which Qualified Nonelective Contributions
and earnings thereon are credited.
2.53 "Related Person" shall mean any person described in
section 11.3(d).
2.54 "Rollover Account" shall mean the account for an Employee to
which a Rollover Contribution and earnings thereon are credited pursuant to
section 4.19(b).
2.55 "Salary Reduction Agreement" shall mean an agreement
described in section 4.4.
2.56 "Severance from Service." A Severance from Service shall
occur on the earlier of (a) or (b) below:
(a) the date as of which the Employee ceases employment with the
Company and all Affiliates by reason of a quit, discharge,
retirement, or death, or
(b) the first anniversary of the first day of an Employee's
absence from employment with the Company and its Affiliates
for any reason other than in (a), above.
Notwithstanding the foregoing, an Employee who is absent on account of
service in the armed forces of the United States of America shall not incur a
Severance from Service in contradiction of federal law.
2.57 "Supplement" shall mean the attachment to this Plan
containing the necessary provisions pertaining to the Participating Group
that is to be covered by the Plan. Any such Participating Group shall become
covered by the Plan as of the effective date of coverage set forth in the
applicable Supplement. To the extent a Supplement provides different rights
and features than the text of the Plan, the terms of the Supplement shall
govern.
PAGE 16
2.58 "Termination of Employment" shall mean an Employee's
cessation of employment with the Company and its Affiliates which satisfies
the requirements for a "separation from service" within the meaning of Code
section 401(k)(2)(B)(i)(I).
2.59 "Trust or Trust Fund" shall mean the trust established by
and under the Trust Agreement under which Plan assets are held and invested
and from which all benefits under the Plan are paid.
2.60 "Trust Agreement" shall mean the agreement entered into
between the Company and the Trustee to carry-out the provisions of the Plan.
2.61 "Trustee" shall mean the person or persons acting as trustee
of the Trust.
2.62 "Unmatched After-Tax Contributions Account" shall mean the
Account established for a Member to which Unmatched After-Tax Contributions
and earnings thereon are credited.
2.63 "Valuation Date" shall mean each business day during the
Plan Year.
2.64 "Vested Balance" as of a given date shall mean the aggregate
balances of a Member's Matched After-Tax Contributions Account, Unmatched
After-Tax Contributions Account, Elective Contributions Account, Qualified
Nonelective Contributions Account, Qualified Matching Contributions Account,
and Rollover Account, plus the Member's vested interest in his or her
Matching Contributions Account, as determined under section 6.2.
PAGE 17
Article III. Participation and Service
---------------------------------------
3.1 Eligible Employee. Each Employee of the Company shall
become an Eligible Employee after completing one Year of Service.
3.2 Commencement of Membership. Each Employee who was a Member
in the Plan on June 30, 1993 shall remain a Member in the Plan. Such Member
may begin to have Elective Contributions and/or After-Tax Contributions made
on his or her behalf on July 1, 1993 by submitting an enrollment form in
accordance with section 3.3. Each other Employee may begin to participate on
the Entry Date coincident with or next following the date he or she becomes
an Eligible Employee, provided such Eligible Employee submits an enrollment
form in accordance with section 3.3.
3.3 Enrollment Form. Prior to becoming a Member, an Employee
shall submit an enrollment form at the time and in the manner specified by
the Committee. Such form shall serve as:
(a) a Salary Reduction Agreement pursuant to section 4.4 (if the
Employee wishes to make Elective Contributions to the Plan),
(b) agreement to make After-Tax Contributions (if the Employee
wishes to make After-Tax Contributions to the Plan),
(c) an investment election pursuant to section 5.3, and
(d) a Beneficiary designation pursuant to section 3.8.
3.4 Eligibility for Contributions.
(a) Elective Contributions. An Employee may elect to have
Elective Contributions made on his or her behalf as of the
first payroll period of the calendar month next following
the date the Employee becomes eligible to commence
membership in accordance with section 3.2, provided that the
Member submits the enrollment form described in section 3.3
on or before the fifteenth day of the month preceding the
first payroll period of the calendar month for which
contributions are to be made.
PAGE 18
If such Employee does not elect to have Elective
Contributions made when such Employee first becomes
eligible, then Elective Contributions may begin for the
first payroll period of the calendar month next following
the Eligible Employee's submission of the enrollment form
described in section 3.3, provided that the enrollment form
is submitted before the fifteenth day of the month preceding
the first payroll period of the calendar month for which
contributions are to be made.
(b) After-Tax Contributions. An Eligible Employee may elect to
make After-Tax Contributions as of the first payroll period
of the calendar month next following the date the Employee
becomes eligible to commence membership in accordance with
section 3.2, provided that the Member submits the enrollment
form described in section 3.3 on or before the fifteenth day
of the month preceding the first payroll period of the
calendar month for which contributions are to be made. If
such Employee does not elect to make After-Tax Contributions
when he or she first becomes eligible to participate, then
After-Tax Contributions may begin for the first payroll
period of the calendar month next following the Eligible
Employee's submission of the enrollment form described in
section 3.3, provided that the enrollment form is submitted
on or before the fifteenth day of the month preceding the
first payroll period of the calendar month for which
contributions are to be made.
(c) Matching Contributions. An Employee shall be eligible to
have Matching Contributions, Qualified Nonelective
Contributions, and Qualified Matching Contributions made on
his or her behalf as soon as the Employee elects to have
Elective Contributions made or elects to make After-Tax
Contributions.
PAGE 19
3.5 Reemployed Members. Each former Employee who was an
Eligible Employee prior to his or her Termination of Employment shall be
eligible to participate on the Entry Date coincident with or next following
the date on which such Employee again becomes an Employee. Upon reemployment
all his or her prior Years of Service shall be restored for purposes of
calculating such Member's Vested Balance, except as otherwise provided in
section 3.7. Each former Employee who was not an Eligible Employee prior to
his or her Termination of Employment shall be eligible to participate on the
Entry Date coincident with or next following the date on which such Employee
becomes an Eligible Employee.
3.6 Cessation of Membership. Membership hereunder shall cease
upon the complete distribution of the Member's Accounts or, if earlier, the
Member's death.
3.7 Year of Service. For purposes of determining eligibility
for membership and vesting, an Employee shall be credited with Service for
the Employee's period of employment with the Company and Affiliates,
determined as follows:
(a) Service shall be determined in completed years and days,
with each 365 days constituting one Year of Service.
(b) An Employee shall receive credit for Service from the date
the Employee first performs an Hour of Service until the
Employee's Severance from Service.
(c) If an Employee who has had a Severance from Service is
subsequently reemployed as an Employee, the following
provisions shall apply:
(1) If the Employee is reemployed before a One-Year
Period of Severance occurs, the Years of Service
such Employee had at such Severance from Service
shall be reinstated upon reemployment.
(A) If such Severance from Service resulted from
a quit, discharge, or retirement, the Employee
shall receive credit (but not in
PAGE 20
excess of twelve months) for Service for the
period between his or her Severance from Service
and reemployment.
(B) If the Employee's Severance from Service is
by reason of a quit, discharge, or retirement
and such Severance from Service occurs during
any absence from employment of twelve months or
less for any reason (other than a quit,
discharge, retirement, or death), and the
Employee then performs an Hour of Service within
twelve months of the date he or she was first
absent from employment, such Employee shall
receive credit for Service for the period
between the Severance from Service and
reemployment.
(2) If the Employee is reemployed after a One-Year
Period of Severance occurs, credit for Years of
Service will resume as of the date the Employee
first performs an Hour of Service upon rehire.
(A) If the Employee had a vested interest in any
portion of his or her Matching Contributions
Account, the Years of Service the Employee had
at Severance from Service shall be reinstated
upon reemployment by the Company or an
Affiliate.
(B) If the Employee did not have a vested
interest in any portion of his or her Matching
Contributions Account, and if the number of One-
Year Periods of Severance between such
Employee's Severance from Service and
reemployment does not equal or exceed the
greater of five or the number of Years of
Service the Employee had prior to Severance from
Service, such Employee's prior Years of Service
shall be reinstated upon reemployment by the
Company or an Affiliate.
PAGE 21
Notwithstanding anything to the contrary above and solely for purposes of
determining eligibility for membership in the Plan, "Years of Service" shall,
with the approval of the Board by written resolution, include all "Years of
Service" credited with Exchange Insurance Company.
3.8 Beneficiary Designation.
(a) Unmarried Members. Each unmarried Member may designate a
Beneficiary or Beneficiaries to receive such Member's
interest in the Plan in the event of such Member's death.
Such designation shall not be effective unless it is made on
a form provided for that purpose by the Committee and filed
with the Committee by the Member during the Member's
lifetime. The Member may, from time to time during the
Member's lifetime, on a form approved by and filed with the
Committee, change the Member's Beneficiary or Beneficiaries.
(b) Married Members. The Beneficiary of each Member who is
married shall be the surviving spouse of such Member, unless
such spouse consents in writing to the designation of
another Beneficiary or Beneficiaries. Each married Member
may, from time to time during the Member's lifetime, on a
form approved by and filed with the Committee, change such
Member's designation of Beneficiaries; provided, however,
that the Member may not change the Member's Beneficiary
without the written consent of the Member's spouse, unless
such spouse's prior consent expressly permits designations
by the Member without any requirement of further consent by
the spouse. Any consent by a spouse hereunder shall only be
effective with respect to that particular spouse.
(1) Requirements of Written Consent. The written
consent described in this subsection (b) shall
acknowledge the effect of such election and
shall be witnessed by a Plan representative
designated by the Committee or a notary public.
Any consent
PAGE 22
by a spouse which expressly permits designations
by the Member without any requirement of further
consent by the spouse must acknowledge the
spouse's right to limit consent to a specific
Beneficiary and must further acknowledge that
such right is voluntarily relinquished.
(2) Circumstances Where no Consent is Required. A
married Member may designate a non-spouse
Beneficiary without spousal consent only if it
is established to the satisfaction of the
Committee that the consent of the spouse could
not have been obtained because there is no
spouse, because the spouse cannot be located, or
because of other circumstances prescribed by
regulations under Code section 417(a).
(c) Default Beneficiary. In the event that no Beneficiary is
designated (or deemed designated) pursuant to paragraph (a)
or (b), the Member's Beneficiary shall be the Member's
estate.
PAGE 23
Article IV. Contributions and Allocations
------------------------------------------
4.1 Elective Contributions.
(a) Amount. The Company shall contribute to the Trust for each
payroll period on behalf of each Member an amount equal to
the amount by which the Member's Compensation has been
reduced for that payroll period under a Salary Reduction
Agreement (as described in section 4.4), subject to the
limitations in sections 4.7, 4.9, and 4.17.
(b) Timing. Such contribution shall be transferred to the
Trustee and invested by the Trustee in the Investment Funds
designated by the Member under section 5.3 as soon as
practicable after the applicable payroll period ends.
Contributions transferred to the Trust during the first
thirty days of a Plan Year may be credited to a Member's
Account as if made on the last day of the preceding Plan
Year unless deemed to have been made in the Plan Year in
which such contribution was transferred to the Trust.
(c) Account. Contributions under this section on behalf of each
Member shall be credited to the Member's Elective
Contributions Account.
4.2 After-Tax Contributions.
(a) Amount. An Eligible Employee may elect to contribute for
each payroll period--
(1) 2 to 6 percent of such Employee's Compensation
(in whole percentages) which shall be eligible
for Matching Contributions under section 4.3
("Matched After-Tax Contributions"), and
(2) 1 to 6 percent (in whole percentages) which
shall not be eligible for Matching Contributions
under section 4.3 ("Unmatched After-Tax
Contributions").
The initial election to make After-Tax Contributions shall
be effective until canceled or amended, subject to the
limitations in sections 4.7, 4.13 and 4.17.
PAGE 24
(b) Timing. Such contribution shall be transferred to the
Trustee and invested by the Trustee in the Investment Funds
designated by the Member under section 5.3 as soon as
practicable after the applicable payroll period ends.
Contributions transferred to the Trust during the first
thirty days of a Plan Year may be credited to a Member's
Account as if made on the last day of the preceding Plan
Year unless deemed to have been made in the Plan Year in
which such contribution was transferred to the Trust.
(c) Account. Matched After-Tax Contributions shall be credited
to the Member's Matched After-Tax Contributions Account and
Unmatched After-Tax Contributions shall be credited to the
Member's Unmatched After-Tax Contributions Account.
4.3 Matching Contributions.
(a) Amount. For each Member, the Company shall make a
contribution equal to 50 percent of such Member's Elective
Contributions or After-Tax Contributions not in excess of
6 percent of the Member's Compensation payable in the
payroll period with respect to which such contribution is
made, subject to the limitations in sections 4.7, 4.13, and
4.17.
(b) Timing. Matching Contributions shall be paid to the Trust
no later than the tax filing deadline for the Company for
the fiscal year in which the Plan Year ends for which the
Matching Contributions are made hereunder.
(c) Account. Matching Contributions shall be credited to the
Member's Matching Contributions Account.
PAGE 25
4.4 Salary Reduction Agreement. In order to have Elective
Contributions made on his or her behalf, an Eligible Employee shall execute a
Salary Reduction Agreement with the Company on a form prescribed by the
Committee whereby such Employee's Compensation shall be reduced by a
specified whole percentage from--
(a) 2 to 6 percent, which shall be eligible for Matching
Contributions under section 4.3 ("Matched Elective
Contributions"), and
(b) 1 to 6 percent, which shall not be eligible for Matching
Contributions ("Unmatched Elective Contributions"),
and whereby the Company agrees to contribute an identical amount on
the Employee's behalf to the Plan under section 4.1. The initial
agreement shall be effective for payroll periods commencing on and
after the date on which membership commences under section 3.2, and
shall be effective until canceled or amended.
4.5 Qualified Nonelective Contributions.
(a) Amount. If the Committee determines that the limitation of
section 4.10 has been or may be exceeded, to the extent
permitted by the final Treasury Regulations under Code
section 401(k) and 401(m), the Company may make Qualified
Nonelective Contributions on behalf of Employees who are not
Highly Compensated Employees in order to satisfy the
limitation of section 4.10.
(b) Timing. Qualified Nonelective Contributions, if any, shall
be paid to the Trust as soon as practicable after the amount
of such contributions has been determined by the Committee.
(c) Restrictions. Such contributions shall be fully and
immediately nonforfeitable and shall not be distributable
prior to a Member's Termination of Employment with the
Company and Affiliates.
PAGE 26
(d) Account. Qualified Nonelective Contributions shall be
credited to the Qualified Nonelective Contributions Account.
4.6 Qualified Matching Contributions.
(a) Amount. If the Committee determines that the limitation of
section 4.13 has been or may be exceeded, to the extent
permitted by the final Treasury Regulations under Code
section 401(k) and 401(m), the Company may make a Qualified
Matching Contribution on behalf of Employees who are not
Highly Compensated Employees in order to satisfy the
limitation of section 4.13.
(b) Timing. Qualified Matching Contributions, if any, shall be
paid to the Trust as soon as practicable after the amount of
such contributions has been determined by the Committee.
(c) Account. Qualified Matching Contributions shall be credited
to the Qualified Matching Contributions Account.
4.7 Limitation on Contributions.
(a) Elective, Matching, Qualified Nonelective, and Qualified
Matching Contributions. Notwithstanding anything herein to
the contrary, contributions for any Plan Year made under
sections 4.1, 4.3, 4.5, and 4.6 shall not exceed the amount
allowable as a deduction to the Company under the applicable
provisions of Code section 404 (unless the Company is
required to make minimum contributions under Code
section 416 as described in section 12.4).
(b) Elective and After-Tax Contributions. Notwithstanding
anything herein to the contrary, the sum of an Employee's
Matched Elective Contributions and Matched After-Tax
Contributions for a Plan Year shall not exceed 6 percent of
such Employee's Compensation for the Plan Year, and the sum
of an Employee's Unmatched
PAGE 27
Elective Contributions and Unmatched After-Tax Contributions
for a Plan Year shall not exceed 6 percent of such
Employee's Compensation for the Plan Year.
4.8 Change and Suspension of Contributions.
(a) Change. A Member may change the amount of his or her
Elective Contributions and/or After-Tax Contributions as of
the first payroll period of any month by giving written
notice to the Committee by the fifteenth day of the month
preceding such payroll period, or by such other date as the
Committee may establish.
(b) Suspension. A Member may suspend his or her Elective
Contributions and/or After-Tax Contributions as of the first
payroll period of any month by giving written notice to the
Committee by the fifteenth day of the month preceding such
payroll period, or by such other date as the Committee may
establish. During a period of suspension of Elective
Contributions and After-Tax Contributions, no Matching
Contributions shall be made on behalf of such Member.
(c) Resumption of Contributions. A Member for whom Elective
Contributions and/or After-Tax Contributions have been
suspended may not have such contributions resumed for a
period of twelve months. Following the twelve-month
suspension, such contributions may be resumed as of the
first payroll period of any month by filing the enrollment
form described in section 3.3 with the Committee by the
fifteenth day of the month preceding the first payroll
period of the calendar month for which such contributions
are to resume or by such other date as the Committee may
establish.
4.9 Maximum Elective Amount. The maximum amount of Elective
Contributions for any individual for any calendar year shall be $7,000, or
such other amount determined by the Secretary of the Treasury under Code
section 402(g)(5) (cost-of-living adjustments). If Elective Contributions
under this Plan exceed the maximum limit for any Member for any calendar
year, the excess amount (and any income attributable to such excess) shall
PAGE 28
be distributed to such Member and such distribution shall be charged against
such Member's Elective Contributions Account. Distribution shall be made as
soon as practicable without regard to any limitation otherwise imposed by law
or by the provisions of this Plan, but in no event shall such distribution be
made after April 15 of the year immediately following the calendar year in
which the excess was contributed.
4.10 Limitation on Elective Contributions. In each Plan Year the
actual deferral percentage of Elective Contributions for the group of Highly
Compensated Employees eligible to participate in the Plan may not exceed the
greater of--
(a) 1.25 times the actual deferral percentage of the group of
all other Eligible Employees; or
(b) the lesser of (1) 2 times the actual deferral percentage of
the group of all other Eligible Employees or (2) the actual
deferral percentage of the group of all other Eligible
Employees plus 2 percentage points.
The "actual deferral percentage" for each such group of Eligible Employees
for a Plan Year is the average of the ratios, calculated separately for each
Employee in each such group, of the amount of Elective Contributions made on
behalf of each Eligible Employee for such Plan Year to the Employee's
Compensation for such Plan Year. In the case of a Highly Compensated
Employee who is eligible to participate in more than one cash or deferred
arrangement maintained by the Company or an Affiliate, the ratio of the
amount of Elective Contributions made on behalf of such Highly Compensated
Employee for such Plan Year to the Highly Compensated Employee's Compensation
for such Plan Year shall be calculated by treating all the cash or deferred
arrangements in which the Highly Compensated Employee is eligible to
participate as one arrangement.
4.11 Adjustment of Elective Contributions During Plan Year.
Notwithstanding anything in this Article IV to the contrary, if the Committee
determines that the nondiscrimination test set forth in section 4.10
otherwise might not be met for the Plan Year, the Committee may reduce the
maximum percentage of
PAGE 29
Compensation at which Highly Compensated Employees may elect to have Elective
Contributions made on their behalf to such percentage, if any, as the
Committee determines appropriate to ensure that such test will be met for
such Plan Year. Such a reduction may be imposed for the entire Plan Year or
any part thereof.
4.12 Excess Elective Contributions After Plan Year.
(a) Correction of Excess Elective Contributions After Plan Year.
If the Committee determines after the end of the Plan Year
that the nondiscrimination test set forth in section 4.10
has not been met, Elective Contributions (adjusted to
reflect any income or losses allocable to such excess to the
date of distribution) of the Highly Compensated Employees
shall be distributed to such Highly Compensated Employees to
eliminate such excess Elective Contributions.
(b) Elimination of Amount of Excess Elective Contributions. The
amount of excess Elective Contributions for a Highly
Compensated Employee for a Plan Year is to be determined by
the following leveling method, under which the actual
deferral percentage of the Highly Compensated Employee with
the highest actual deferral percentage is reduced to the
extent necessary to--
(1) enable the Plan to satisfy the actual deferral
percentage limitation, or
(2) cause such Highly Compensated Employee's actual
deferral percentage to equal the percentage of
the Highly Compensated Employee with the next
highest actual deferral percentage.
This process shall be repeated until the Plan satisfies the
actual deferral percentage limitation in section 4.10.
(c) Return of Excess Elective Contributions. Excess Elective
Contributions which are returned to Highly Compensated
Employees pursuant to this section 4.12 shall be distributed
to such Employees as soon as practicable, without regard to
any limitation otherwise imposed by law or by the provisions
of this Plan.
PAGE 30
Notwithstanding the foregoing, the amount of excess Elective Contributions
which are returned to Highly Compensated Employees with respect to a Plan
Year shall be reduced by the excess Elective Contributions previously
distributed to such Highly Compensated Employee under section 4.9 of the Plan
for the Highly Compensated Employee's taxable year ending with or within such
Plan Year.
4.13 Limitation on Matching Contributions and After-Tax
Contributions. In each Plan Year the contribution percentage of Matching
Contributions and After-Tax Contributions for the group of Highly Compensated
Employees eligible to participate in the Plan may not exceed the greater of--
(a) 1.25 times the contribution percentage of the group of all
other Eligible Employees; or
(b) the lesser of (1) 2 times the contribution percentage of the
group of all other Eligible Employees or (2) the
contribution percentage of the group of all other Eligible
Employees plus 2 percentage points.
The "contribution percentage" for each such group of Eligible
Employees for a Plan Year is the average of the ratios, calculated separately
for each Employee in each such group, of Matching Contributions and After-Tax
Contributions made on behalf of each eligible Employee for such Plan Year to
the Employee's Compensation for such Plan Year. To the extent permitted by
applicable regulations, the Committee may elect to take Elective
Contributions into account in determining the contribution percentage. In
the case of a Highly Compensated Employee who is eligible to participate in
more than one plan maintained by the Company or an Affiliate to which
Matching Contributions are made, the ratio of the amount of Matching
Contributions and After-Tax Contributions made on behalf of such Highly
Compensated Employee for such Plan Year to the Highly Compensated Employee's
Compensation for such Plan Year shall be calculated by treating all the plans
in which the Highly Compensated Employee is eligible to participate as one
plan.
PAGE 31
4.14 Excess Matching Contributions and After-Tax Contributions
After Plan Year.
(a) Correction of Excess Matching Contributions and After-Tax
Contributions After Plan Year. If the Committee determines
after the end of the Plan Year that the nondiscrimination
limitation in section 4.13 has not been met, Matching
Contributions and After-Tax Contributions (adjusted to
reflect any income or losses allocable to such excess to the
date of distribution) of the Highly Compensated Employees
shall be distributed to such Highly Compensated Employees to
eliminate such excess Matching Contributions and After-Tax
Contributions; provided, however, that to the extent a
Highly Compensated Employee is not 100 percent vested in his
or her excess Matching Contributions, such nonvested excess
Matching Contributions (and the earnings thereon) shall be
treated as a forfeiture pursuant to section 6.3.
(b) Elimination of Amount of Excess Matching Contributions and
After-Tax Contributions. The amount of excess Matching
Contributions and After-Tax Contributions for a Highly
Compensated Employee for a Plan Year is to be determined by
the following leveling method, under which the contribution
percentage of a Highly Compensated Employee with the highest
contribution percentage is reduced to the extent required
to--
(1) enable the Plan to satisfy the contribution
percentage limitation, or
(2) cause such Highly Compensated Employee's
contribution percentage to equal the percentage
of the Highly Compensated Employee with the next
highest contribution percentage.
This process must be repeated until the Plan satisfies the
contribution percentage limitation in section 4.13.
(c) Return of Excess Matching Contributions and After-Tax
Contributions. Within a Members' Account, the excess shall
be reduced and distributed or, if applicable, forfeited, in
the following order:
PAGE 32
(1) Unmatched After-Tax Contributions,
(2) Vested Matching Contributions,
(3) Nonvested Matching Contributions, and
(4) Matched After-Tax Contributions.
Excess Matching Contributions and After-Tax Contributions
which are returned to Highly Compensated Employees pursuant
to this section 4.14 shall be distributed to such Employees
as soon as practicable, without regard to any limitation
otherwise imposed by law or by the provisions of this Plan.
4.15 Application of General Nondiscrimination Requirements. In
the event that all or a portion of the Elective Contributions and After-Tax
Contributions of a Member who is a Highly Compensated Employee is distributed
to such Member under section 4.12 or 4.14, the Matching Contribution,
generated by such Elective Contributions and After-Tax Contributions, under
section 4.3 (adjusted to reflect any income or loss allocable thereto for the
Plan Year) shall be distributed to the extent such Matching Contribution is
vested and shall be treated as a forfeiture under section 6.3 to the extent
it is not vested.
4.16 Restriction on Multiple Use of Alternative Limit.
(a) General Rule. If the discrimination limits set forth in
sections 4.10 and 4.13 would otherwise be satisfied only by
use of the alternative limitation set forth in
subsection (b) of both section 4.10 and section 4.13 of the
Plan, the "contribution percentage" (as defined in
section 4.13) of Highly Compensated Employees shall be
reduced in the manner described in section 4.14 until the
"Aggregate Limit" (as defined in (b) below) is satisfied.
(b) Aggregate Limit. For purposes of this section 4.16, the
"Aggregate Limit" means the greater of
(1) the sum of--
(A) 1.25 times the greater of the actual
deferral percentage or the contribution
percentage of the group of all Eligible
Employees who are not Highly Compensated
Employees, and
PAGE 33
(B) the lesser of--
(i) 2 times the lesser of the actual
deferral percentage or the
contribution percentage of the group
of all Eligible Employees who are not
Highly Compensated Employees, or
(ii) the sum of 2 percentage points and the
lesser of the actual deferral
percentage or the contribution
percentage of the group of all
Eligible Employees who are not Highly
Compensated Employees; or
(2) The sum of--
(A) 1.25 times the lesser of the actual
deferral percentage or the contribution
percentage of the group of all Eligible
Employees who are not Highly Compensated
Employees; and
(B) the lesser of--
(i) 2 times the greater of the actual
deferral percentage or the
contribution percentage of the group
of all Eligible Employees who are not
Highly Compensated Employees; or
(ii) the sum of 2 percentage points and the
greater of the actual deferral
percentage or the contribution
percentage of the group of all
Eligible Employees who are not Highly
Compensated Employees.
4.17 Limitation on Annual Additions.
(a) General Limitation. Notwithstanding the foregoing
provisions of this Article IV, the amount of Annual
Additions with respect to a Member for a Plan Year shall not
exceed the lesser of:
(1) $30,000 or, if greater, one-fourth of the
defined benefit dollar limitation in effect for
the Plan Year under Code section 415(b)(1)(A),
or
(2) 25 percent of the Member's Limitation
Compensation (as defined below) for such Plan
Year.
PAGE 34
(b) Limitation for Member also Covered by Defined
Benefit Plan. In the case of a Member who is or has been
covered under a qualified defined benefit plan maintained by
the Company or an Affiliate, the Projected Annual Benefit
(as defined below) under such defined benefit plan shall be
reduced (prior to any reduction under this Plan) to the
extent necessary to ensure that the sum of the Defined
Contribution Fraction (as defined below) and the Defined
Benefit Fraction (as defined below) does not exceed 1.0 for
any Plan Year.
(c) Definitions. For purposes of this section,
(1) Annual Additions shall mean the sum, credited to
a Member's Accounts under this Plan and his or
her accounts under all other qualified defined
contribution plans maintained by the Company or
by any Affiliate, of:
(A) Company contributions, including Elective
Contributions, Matching Contributions,
Qualified Nonelective Contributions, and
Qualified Matching Contributions;
(B) Employee contributions, including After-Tax
Contributions;
(C) Amounts allocated on behalf of the Member
to an individual medical account under Code
section 401(h)(6) or 419A(d); provided,
however, that Code section 415(c)(1)(B) and
section 4.17(a)(2) of the Plan shall not
apply to any amount treated as an Annual
Addition under this subparagraph (C).
Restored forfeitures, repaid distributions,
rollover contributions, and loan payments shall
not be treated as Annual Additions.
(2) Defined Benefit Fraction shall mean a fraction,
the numerator of which is the sum of the
Member's Projected Annual Benefits under all
qualified defined benefit plans (whether or not
terminated) maintained by the Company or by any
Affiliate, and
PAGE 35
the denominator of which is the lesser of:
(A) 1.25 times the dollar limitation of Code
section 4l5(b)(1)(A) in effect for the Plan
Year, or
(B) 1.4 times the Member's average Limitation
Compensation for the three consecutive Plan
Years that produce the highest average.
(3) Defined Contribution Fraction shall mean a
fraction, the numerator of which is the sum of
the Annual Additions to the Member's Accounts
under all qualified defined contribution plans
(whether or not terminated) maintained by the
Company or by any Affiliate for the current Plan
Year and all prior years of service with the
Company, and the denominator of which is the sum
of the lesser of the following amounts
determined for such year and for each prior year
of service with the Company:
(A) 1.25 times the dollar limitation in effect
under Code section 415(c)(1)(A) for such year,
or
(B) 1.4 times the amount which may be taken
into account under section 4.17(a)(2) above.
(4) Limitation Compensation shall mean the total of
regular, overtime, bonus, and other cash
compensation paid or made available to the
Employee during the Plan Year for services
rendered to the Company during the Plan Year,
but not including Elective Contributions or the
items listed in Treasury Regulation section
1.415-2(d)(1) (relating to deferred
compensation, stock options, and proceeds from
the sale of certain securities).
(5) Projected Annual Benefit shall mean the annual
benefit to which the Member would be entitled
under the terms of a defined benefit plan, if:
(A) the Member continued in covered employment
until his or her Normal Retirement Age (or
PAGE 36
current age, if later), and
(B) the Member's Limitation Compensation for
the Plan Year and all other relevant factors
used to determine such benefit remained constant
until such Normal Retirement Age (or current
age, if later).
(d) Procedure by Which Excess Annual Additions Shall be Reduced.
If Annual Additions in excess of the amount allowed under
section 4.17(a) erroneously have been made with respect to a
Member for a Plan Year, such additions shall be reduced, to
the extent necessary to remove such excess, first under this
Plan and then under any other qualified defined contribution
plans maintained by the Company or by any Affiliate. Any
reductions required pursuant to the foregoing sentence shall
be made against Unmatched After-Tax Contributions, and then
if additional reduction is necessary such reduction shall be
first against Unmatched Elective Contributions and then
against Matching Contributions. The amount of the reduction
attributable to After-Tax Contributions or Elective
Contributions shall be refunded to the Member. Any
reduction attributable to Matching Contributions shall be
held unallocated by the Trustee and shall be used to offset
Matching Contributions for the next Plan Year and, if
necessary, each succeeding Plan Year.
4.18 Return of Contributions. Except as provided in this section
4.18, the Company shall have no right, title, or interest in the
contributions made to the Trust under the Plan, and no part of the Trust
assets shall revert to the Company.
(a) Disallowance of Deductions. In the event that all or part
of the Company's deductions under Code section 404 for
contributions to the Plan are disallowed by the Internal
Revenue Service, the portion of the contributions to which
such disallowance applies shall be returned to the Company.
(b) Mistake of Fact. In the event that a contribution to the
Plan is made by a mistake of fact, then such contribution
shall be returned to the Company.
PAGE 37
Any return of contributions permitted under this section 4.18 shall be made
within one year after the disallowance of deduction or the payment of the
contribution due to a mistake of fact, as applicable.
4.19 Rollover Amounts.
(a) Request for Acceptance of Rollover Contribution. Any
Employee may file a written request with the Committee
requesting that the Trustee accept a Rollover Contribution
(as defined below) from such Employee, either directly or
from the previous plan trustee. Any written request filed
pursuant to this section 4.19 shall set forth the amount of
such Rollover Contribution (which must be all in U.S.
dollars) and a statement, satisfactory to the Committee,
that such contribution constitutes a Rollover Contribution
within the meaning set forth in subsection (c) below. The
Committee, in its sole discretion, shall determine whether
or not such contribution would constitute a Rollover
Contribution as defined in subsection (c) below.
(b) Rollover Account. Any Rollover Contribution shall become
part of the Trust and shall be credited to a separate fully
vested Rollover Account.
(c) Rollover Contribution. Except as provided in subsection (d)
below, the term "Rollover Contribution" shall mean any
amount which is in U.S. dollars and is attributable to a
distribution from another qualified plan, if such
distribution meets the requirements for a tax-free rollover
defined in:
(1) Code sections 402(a)(5) or 403(a)(4) (relating
to certain lump sum distributions from an
employees' trust or employee annuity described
in Code sections 401(a) or 403(a)), or
(2) Code section 408(d)(3) (relating to certain
distributions from an individual retirement
account or an individual retirement annuity).
PAGE 38
(d) Employee Contributions. In the event a contribution
intended as a Rollover Contribution contains nondeductible
employee contributions made under the provisions of another
plan, such contributions shall be withdrawn from the Plan as
soon as the mistake is detected. Any such withdrawal may be
required by the Committee or requested by the Employee by
providing the Committee with a written request setting forth
the amount requested and a verification of the amount of
such mistaken rollover.
(e) Investment of Rollover Account. The Rollover Account may be
invested only in the Investment Funds.
4.20 Transfer Accounts. Transfers of accounts from plans
qualified under Code section 401(a) or individual retirement accounts or
annuities pursuant to Code section 408 shall not be permitted.
PAGE 39
Article V. Member Accounts; Investment Funds
---------------------------------------------
5.l Establishment of Member's Accounts. The Committee shall
establish on its books for each Member, if applicable, an Elective
Contributions Account, a Matching Contributions Account, a Matched and
Unmatched After-Tax Contributions Account, a Qualified Nonelective
Contributions Account, a Qualified Matching Contributions Account, and a
Rollover Account. Each of such Accounts shall be maintained so long as there
shall be a credit balance therein. Amounts held in Accounts on behalf of
Employees shall remain invested, and shall be subject to all adjustments
under this Article, at all times except:
(a) periods during which a change of investment election is
being processed, and
(b) with respect to a distribution under Article VII, the period
following the Valuation Date as of which the value of the
distribution is determined.
5.2 Investment Funds. Subject to the provisions of Article XIII
(Qualified Domestic Relations Orders), each Member may direct the investment
of his or her Accounts in any Investment Funds which shall be established and
maintained by the Trustee subject to directions from the Committee.
5.3 Investment Election By Members.
(a) Election. At such time and in such manner as the Committee
shall prescribe, and subject to the provisions of Article
XIII (Qualified Domestic Relations Orders), each Member,
including each Member who is a former Employee and the
Beneficiary of a deceased Member, may file with the
Committee (or its designated agent) such Member's direction
with respect to the percentage of the Member's Accounts and,
if applicable, the portion of future contributions to be
allocated to each of the Investment Funds. Each Member may
elect to have the amounts in his or her Accounts invested in
increments equal to any whole percentage of
PAGE 40
the total in his or her Account, in one or more of the
Investment Funds. Each Member is solely responsible for the
selection of his or her investment options. The fact that
an Investment Fund is available to Members for investment
under the Plan shall not be construed as a recommendation
for investment in that Investment Fund.
(b) Change of Election - Future Contributions. Any investment
direction given by a Member shall be deemed to be a
continuing direction until changed. Subject to subsection
(d) below, a Member may change his or her investment
elections under this subsection (b) in increments equal to
any whole percentage of the total amount in his or her
Account with respect to future contributions via telephone
fund transfer, provided the Member had previously authorized
telephone fund transfers on a form supplied by the Committee
(or its designated agent). A Member may elect to change his
investment election with respect to future contributions via
telephone transfer as often as the Member chooses. The
election shall be effective as of that date, or as of the
following date if the date of transfer is not a business day
or if the election is made after the time which the
Committee (or its designated agent) establishes as the
deadline for effectuating a same day election.
(c) Transfers of Existing Accounts Among Investment Funds.
Subject to subsection (d) below, a Member may elect to
transfer amounts in his or her Account among the Investment
Funds in increments equal to any whole percentage via
telephone fund transfer, provided the Member had previously
authorized telephone fund transfers on a form supplied by
the Committee (or its designated agent). A Member may elect
to transfer amounts in his Accounts among the Investment
Funds via telephone transfer as often as the member chooses.
The transfer election shall be effective as of that date,
PAGE 41
or as of the following date if the date of transfer is not a
business day or if the election is made after the time which
the Committee (or its designated agent) establishes as the
deadline for effectuating a same day transfer. The transfer
shall be based on the Member's interest in the Investment
Funds as of the Valuation Date immediately preceding the
effective date of the transfer election and the fair market
value of the amount subject to the transfer election shall
be determined and transferred as soon as practicable
thereafter.
(d) Blackout Period. Effective June 3, 1993 through September
1, 1993, Members shall not be permitted to change their
investment elections with respect to future contributions
under subsection (b) above and existing account balances
under subsection (c) above. Members shall receive at least
thirty days' notice of this blackout period.
5.4 Plan Expenses.
(a) Investment Fees. Expenses attributable to the management
and investment of each Investment Fund shall be charged
against the respective fund.
(b) Administrative Expenses. All fees paid for recordkeeping
services performed by a third-party service provider and all
reasonable expenses incurred in the administration of the
Plan (including, but not limited to, the fees and
compensation of auditors, accountants and legal counsel)
shall be payable by the Plan. To the extent not paid by the
Plan, the expenses shall be paid by the Company.
5.5 Valuations; Allocation of Investment Earnings and Losses.
Accounts and Investment Funds shall be valued as of each Valuation Date.
Earnings, gains, and losses (realized or unrealized) for each Investment Fund
shall be allocated to the portion ("subaccount") of a Member's Accounts
maintained with
PAGE 42
respect to such Investment Fund, in the same ratio that the value of his or
her subaccount bears to the sum of the values of all Members' subaccounts
maintained with respect to such Investment Fund. For the purpose of this
ratio, the value of a subaccount shall be the value of the subaccount as of
the last preceding Valuation Date, adjusted for contributions, loan
repayments, transfers between Investment Funds, distributions, withdrawals,
and expenses.
PAGE 43
Article VI. Vesting and Forfeitures
------------------------------------
6.l Vesting in Elective Contributions Account, After-Tax
Contributions, Qualified Nonelective Contributions Account, Qualified
Matching Contributions Account, and Rollover Account. A Member shall have a
fully vested interest in his or her Elective Contributions Account, After-Tax
Contributions Account, Qualified Nonelective Contributions Account, Qualified
Matching Contributions Account, and Rollover Account at all times.
6.2 Vesting in Matching Contributions Account.
(a) General Rule. A Member shall have a vested interest in his
or her Matching Contributions Account in accordance with the
following schedule:
Vested
Years of Service Percentage
---------------- ----------
Less than 2 0%
2 but less than 3 30
3 but less than 4 40
4 but less than 5 50
5 but less than 6 75
6 or more 100
(b) Accelerated Vesting. Notwithstanding anything to the
contrary above, a Member shall have 100 percent vested
interest in the value of his or her Matching Contributions
Account if:
(1) the Member is an Employee at any time on or
after attaining Normal Retirement Age; or
(2) the Member dies while an Employee.
6.3 Forfeitures. Any portion of a Member's Matching
Contributions Account in which such Member's interest is not fully vested
under section 6.2 shall constitute a forfeiture immediately following a One-
Year Period of Severance, except to the extent provided in section 6.4. All
forfeited amounts shall be used to reduce the Matching Contributions made in
accordance with section 4.3 and/or to pay administrative expenses of the
Plan.
PAGE 44
6.4 Reinstatement of Forfeited Amounts. If a Member has a
Termination of Employment, a distribution is made under the Plan, the Member
incurs a forfeiture of amounts in his or her Matching Contributions Account,
and the Member is subsequently reemployed and credited with an Hour of
Service prior to incurring five consecutive One-Year Periods of Severance,
then such Member shall have reinstated to him or her the amount of the
Matching Contributions Account forfeited at such Member's Annuity Starting
Date. Such reinstatement shall be made from forfeitures and, if there are
not sufficient forfeitures, by an additional Company contribution for the
Plan Year of restoration. Any amount reinstated pursuant to this section
shall be invested in the Investment Funds in the proportions selected in the
most recent written direction filed with the Committee pursuant to
section 5.3 of the Plan.
6.5 Calculation of Vested Interest Upon Distribution or
Withdrawal. If a Member has previously received a distribution or withdrawal
of such Member's partially vested interest in his or her Matching
Contributions Account, which distribution or withdrawal did not result in a
forfeiture or, if a forfeiture occurred, such amounts were reinstated to the
Account in accordance with section 6.4, and the Member again becomes entitled
to a distribution or withdrawal prior to attaining a fully vested interest in
the Matching Contributions Account, then the portion of such Member's
Matching Contributions Account which is distributable upon such later event
("X") shall be determined as follows: X = P (AB + (R x D)) - (R x D)
(a) P is the Member's vested percentage as of the later event of
distribution or withdrawal,
(b) AB is the adjusted balance of the Member's Matching
Contributions Account,
(c) D is the amount distributed or withdrawn from the Member's
Matching Contributions Account upon the earlier event, and
(d) R is AB divided by (Matching Contributions Account balance
at the time of the earlier event minus D).
PAGE 45
Article VII. Distributions
---------------------------
7.l Normal or Early Retirement. A Member whose employment with
the Company terminates on or after such Member's Normal Retirement Age or
Early Retirement Age for any reason other than death or Disability shall be
entitled to receive the entire balance of such Member's Accounts in
accordance with the provisions of section 7.5, subject to Article XIII
(Qualified Domestic Relations Orders).
7.2 Disability Retirement. A Member whose employment with the
Company terminates on account of a Disability shall be entitled to receive
the entire balance of such Member's Accounts in accordance with the
provisions of section 7.5, subject to Article XIII (Qualified Domestic
Relations Orders).
7.3 Distribution Upon Death of Member.
(a) Death Prior to Annuity Starting Date. In the event of a
Member's death prior to such Member's Annuity Starting Date,
a distribution of the value of the Member's Account shall be
made to such Member's Beneficiary in accordance with section
7.5(a). Distribution shall be made as soon as practicable
following the Member's death; provided, however, that if the
designated Beneficiary is the Member's surviving spouse, the
payment of the benefit under this section need not occur
until the date on which the Member would have attained his
Normal Retirement Age.
(b) Death After Annuity Starting Date. In the event of a
Member's death after such Member's Annuity Starting Date and
after such Member has received a lump sum payment of his or
her Vested Balance, no additional benefits shall be paid
from the Plan on account of such Member's death.
PAGE 46
7.4 Distributions Upon a Termination of Employment for Other
Causes. A Member whose employment with the Company terminates prior to Early
Retirement Age for reasons other than death or Disability shall be entitled
to receive the Vested Balance of his or her Accounts following such
termination in accordance with the provisions of section 7.5, subject to
Article XIII (Qualified Domestic Relations Orders). Immediately following
such a Termination of Employment the nonvested portion of such Member's
Accounts shall be forfeited pursuant to section 6.3.
7.5 Form and Timing of Distributions.
(a) Form. Whenever a Member's Accounts become distributable
pursuant to sections 7.1, 7.2, 7.3, or 7.4 to such Member or
such Member's designated Beneficiary, distribution of said
Accounts shall be made by the payment of the amount
distributable in one lump sum payment in cash.
(b) Timing. Whenever during any Plan Year the amount standing
to the credit of a Member's Accounts becomes distributable
pursuant to sections 7.1, 7.2, 7.3, or 7.4, the Committee,
subject to subsection (c), shall direct that distribution of
the Member's Accounts be made as soon as practicable and
that any additional amount credited to a Member for the year
of retirement, Disability, death, or other Termination of
Employment be distributed at such later time as that amount
is ascertained.
(c) Deferral.
(1) Deferral to Normal Retirement Age. If the
balance of a Member's Accounts to be distributed
prior to the Member attaining Normal Retirement
Age exceeds $3,500, or at the time of any
previous distribution or withdrawal has ever
exceeded $3,500, and the Member (or surviving
spouse, if the Member is deceased) does not
consent to have the distribution of the Member's
Accounts made as
PAGE 47
soon as practicable after the Member terminates
employment, dies, or incurs a Disability, such
Accounts shall not be distributed in whole or in
part until such time as the Member (or surviving
spouse, if applicable) elects distribution.
(2) Deferral for 12 Months. Any Member may elect to
defer receipt of his or her Accounts for up to
12 months, subject to the requirements in
section 7.6(b).
(d) Investment During Deferral Period. Vested Balances
remaining in the Plan after the Member's Termination of
Employment or death shall be invested in accordance with the
Member's (or Beneficiary's) instructions.
(e) Direct Rollover to Another Plan or IRA. Any Member,
Beneficiary who is the surviving spouse of the Member, or
alternate payee (under Article XIII) who is the spouse or
former spouse of the Member, and who receives a distribution
which is an Eligible Rollover Distribution, as defined in
Code section 402(f)(2)(A), may elect in writing, on the form
or forms approved by the Committee, to make a direct
rollover pursuant to Code section 401(a)(31) and the
regulations thereunder, to an Eligible Retirement Plan, as
defined in Code section 402(c)(8)(B); provided that the
amount of Eligible Rollover Distribution for the calendar
year is or is reasonably expected to be at least $200 and,
if only a portion of the Eligible Rollover Distribution is
to be rolled over, the amount of the direct rollover is at
least $500. A direct rollover of an Eligible Rollover
Distribution by a Member or Beneficiary may not be made to
more than one Eligible Retirement Plan. If a Member or
Beneficiary fails to make a direct rollover election before
the deadline chosen by the Committee, the Plan shall
distribute the amount as if a direct rollover election with
respect to the distribution had not been made.
PAGE 48
This Plan shall accept direct rollovers from another
Eligible Retirement Plan.
7.6 Minimum Distribution Requirements. Notwithstanding any
other provision of the Plan to the contrary the following rules shall apply.
(a) Basic Rule. Unless the Member otherwise elects in writing,
distribution to such Member shall be made not later than the
sixtieth day after the close of the Plan Year in which
occurs the latest of the following events:
(1) the Member attains his or her Normal
Retirement Age;
(2) the Member attains the tenth anniversary
of the date on which the Member became a
Member under the Plan; or
(3) the Member's Termination of Employment.
(b) Required Distribution Date. Notwithstanding anything
to the contrary in this Article VII, payment of the
Vested Balance in the Plan to a Member who is a
"5 percent owner" (as defined in Code
section 416(i)(1)(B)(i)) shall be made by April 1 of
the calendar year following the calendar year in which
the Member attains age 70 1/2 regardless of whether he
or she is still employed by the Company. In the case
of a Member who is not a 5 percent owner, the Member's
Vested Balance in the Plan shall be paid not later
than April 1 following the calendar year in which such
Member attains age 70 1/2, regardless of when the
Member terminates employment; provided, however, that
a Member who attained age 70 1/2 on or before
December 31, 1987 and who was not a 5 percent owner at
any time during the Plan Year ending with or within
the calendar year in which such individual attains
age 66 1/2 or during any subsequent Plan Year, may
delay commencement of benefit distribution until
April 1 of the calendar year following the calendar
year in which occurs the later of (1) Termination of
Employment or (2) attainment of age 70 1/2.
PAGE 49
(c) Periodic Benefit Payments. Consistent with Code
section 401(a)(a), a Member's entire interest in the
Plan shall be distributed to such Member, beginning
not later than the date required pursuant to
subsections (a) and (b) above, over the life of the
Member (or over the joint lives of the Member and the
Member's designated Beneficiary) or in a payment or
series of payments over a period not extending beyond
the life expectancy of the Member (or the joint life
expectancies of the Member and the Member's designated
Beneficiary).
(d) Required Distribution Where Employee Dies Before
Entire Interest is Distributed. Consistent with Code
section 401(a)(a), if the distribution of a Member's
benefits has begun and the Member dies before the
Member's entire interest has been distributed, the
remaining portion of the Member's benefits will be
distributed at least as rapidly as under the method of
distribution being used as of the date of the Member's
death.
(e) Five-Year Rule. Consistent with Code section
401(a)(a), if a Member dies prior to the distribution
of the Member's benefit without having designated a
person as his or her Beneficiary (other than a deemed
designation of the spouse as provided in section 3.8),
then distribution of the Member's Account shall be
made within five years after the Member's death.
(f) Incidental Death Benefit. Consistent with Code
section 401(a)(a), the minimum amount which must be
distributed each calendar year to the Member shall be
the amount determined by dividing the balance in the
Member's Account by the "applicable divisor." The
"applicable divisor" shall be determined under
regulations issued by the Secretary of the Treasury
under the minimum incidental death benefit
requirements of Code section 401(a)(9).
Distributions hereunder will be made in accordance with Code
section 401(a)(9) and the regulations thereunder, including
PAGE 50
regulation section 1.401(a)(9)-2, which are incorporated by
reference herein.
7.7 Withdrawals of Elective Contributions.
(a) General Rule. Subject to the provisions of Article
XIII (Qualified Domestic Relations Orders) and section
7.11, during employment with the Company a Member may
withdraw all or any part of the amount credited to
such Member's Elective Contributions Account, other
than that amount which represents earnings credited to
such Account, but only upon a determination by the
Committee that the Member has suffered a financial
hardship within the meaning of final regulations
issued by the Internal Revenue Service under Code
section 40l(k). Such withdrawal shall not exceed the
amount necessary to meet the need created by such
hardship. The minimum amount of withdrawal shall be
$1,000.
(b) Deemed Immediate and Heavy Financial Need. A
distribution will be deemed to be made on account of
an immediate and heavy financial need of the Member if
the distribution is on account of--
(1) medical expenses described in Code section
213(d) incurred by the Member, the
Member's spouse, or any dependents of the
Member (as defined in Code section 152);
(2) the purchase (excluding mortgage payments)
of the principal residence of the Member;
(3) tuition and related fees for the next
twelve months of post-secondary education
for the Member, the Member's spouse,
children, or dependents;
(4) to prevent the eviction of the Member from
his or her principal residence or to
prevent foreclosure
on the mortgage of the Member's principal
residence.
(c) Distribution Deemed Necessary to Satisfy Financial Need.
A distribution pursuant to this section 7.7 will be
deemed necessary to satisfy an immediate and heavy
financial need of a Member if all of the following
requirements are met.
PAGE 51
(1) The distribution is not in excess of the
amount required to relieve the financial
need of the Member. The amount of the
financial need may include any amounts
necessary to pay any federal, state, or
local income taxes or penalties reasonably
anticipated to result from the distribution.
(2) The Member has obtained all distributions,
other than hardship distributions, and all
nontaxable (at the time of the loan) loans
currently available under all plans
maintained by the Company.
(3) The Plan and all other plans maintained by
the Company limit the Elective Contributions
for the next Plan Year to the applicable
limit under section 4.10 for that year minus
the Elective Contributions for the year of
the hardship distribution under this section
7.7.
(4) The Member is prohibited, under the terms of
the Plan or an otherwise legally enforceable
agreement, from making Elective
Contributions and After-Tax Contributions to
the Plan and all other plans maintained by
the Company for at least 12 months after
receipt of the hardship distribution under
this section 7.7.
7.8 Withdrawals from Unmatched After-Tax Contributions
Account. Subject to the provisions of Article XIII (Qualified Domestic
Relations Orders), a Member may withdraw the amount in his or her
Unmatched After-Tax Contributions Account provided the following
requirements are met:
(a) the minimum withdrawal is $1,000,
(b) only one withdrawal under this section 7.8 shall be
permitted each Plan Year, and
(c) no withdrawal under this section 7.8 shall be permitted
unless the Member has been a Member for at least twenty-
four consecutive months.
PAGE 52
7.9 Withdrawal, on Account of Serious Financial Hardship,
from All Accounts Except Elective Contributions Account. Subject to the
provisions of Article XIII (Qualified Domestic Relations Orders), a
Member may withdraw all or any portion of the Vested Balance in his or
her Matched After-Tax Contributions Account, Unmatched After-Tax
Contributions Account, and Rollover Account plus the Vested Balance in
such Member's Matching Contributions Account in the event of a Serious
Financial Hardship. The minimum withdrawal is $1,000. For purposes of
this section 7.9 only, "Serious Financial Hardship" shall mean the
occurrence of any event of sufficient severity that a Member or his or
her family is clearly endangered by present or impending want or
privation, as determined by the Committee. Such Serious Financial
Hardship must be shown by positive evidence submitted to the Committee
that the hardship is of sufficient magnitude to impair the Member's
financial security. Withdrawals shall be determined in a consistent and
nondiscriminatory manner, and shall not affect the Member's right under
the Plan to make additional withdrawals or continue to be an active
Member.
7.10 Withdrawals After Age 59 1/2. Subject to the provisions
of Article XIII (Qualified Domestic Relations Orders) and section 7.11, a
Member who has attained age 59 1/2 may withdraw all or any part of the
amounts credited to such Member's Elective Contributions Account,
Matching Contributions Account, Matched After-Tax Contributions Account,
Unmatched After-Tax Contributions Account, Qualified Nonelective
Contributions Account, Qualified Matching Contributions Account, and
Rollover Account.
7.11 Provisions Applicable to All Withdrawals.
(a) General. Payment of a withdrawal under sections 7.7,
7.8, 7.9, and 7.10 shall be made as soon as practicable
after the request for withdrawal is made to the
Committee.
(b) Allocation Among Investment Funds. All withdrawals
shall be made in cash and shall be allocated to the
PAGE 53
Investment Funds in which the Members' Accounts are
invested in accordance with the Member's instructions.
Account balances available for withdrawal shall be
valued as of the Valuation Date next following the date
the withdrawal is approved by the Committee.
(c) Coordination with Loan Limitations. No withdrawal shall
be permitted which reduces the Member's Vested Balance
below the amount permitted under section 8.2(b).
PAGE 54
Article VIII. Loans to Members
-------------------------------
8.l Committee Authorized to Make Loans. Upon the written
application of an eligible Member, the Committee may direct the Trustee
to make a cash loan to the Member. A Member is eligible to apply for a
loan if the Member is an Employee or if the Member is a former Employee
and a "party in interest" within the meaning of section 3(14) of the Act.
The terms of a loan shall be determined by the Committee, subject to the
provisions of this Article and section 13.6 (regarding Qualified Domestic
Relations Orders). Loans shall be granted on a reasonably equivalent
basis, taking into account an applicant's creditworthiness. Any loans
made under this Article VIII shall be made as soon as administratively
practicable and the maximum amount of such loan shall be based upon the
valuation of the Member's Accounts as of the Valuation Date immediately
preceding the date of such loan.
8.2 Amount and Number of Loans.
(a) Minimum Amount. The minimum amount of any loan shall be
$1,000.
(b) Maximum Amount. The maximum amount of any loan together
with the amount outstanding on the date of the loan from
any other loans under this Plan shall not exceed the
lesser of:
(1) $50,000 reduced by the excess (if any) of:
(A) the highest outstanding balance of
loans from the Plan during the one-year
period ending on the day before the
date the loan is made, over
(B) the outstanding balance of loans from
the Plan on the date on which the loan
is made, or
(2) One-half of the Member's Vested Balance.
PAGE 55
If a Member is also covered under another plan maintained by the
Company or an Affiliate which meets the requirements of Code
sections 401(a) and 501(a), the limitations of paragraphs (1) and
(2) shall be applied as though all such plans are one plan.
(c) Number of Loans. Only one loan may be made each Plan
Year and no more than one loan may be outstanding at any
time.
(d) Account. All loans shall be made from funds in the
Member's Elective Contributions Account.
8.3 Interest. Each loan shall bear such reasonable rate of
interest as the Committee may determine. In determining such rate of
interest, the interest rate being charged by persons in the business of
lending monies for loans made under similar circumstances shall be
considered.
8.4 Term. Except as provided below, loans shall be for the
period requested by the Member but shall not exceed five years, except in
the case of a purchase of a primary residence, in which case the term of
the loan shall not exceed fifteen years.
8.5 Repayment.
(a) Loans shall be repaid in substantially equal
installments, at least quarterly, representing a
combination of interest and principal, sufficient to
amortize the loan during its term. Repayment shall
commence as soon as practicable after the loan is made.
(b) Payments by active Employees shall be made through
payroll withholding or other means acceptable to the
Committee in its sole and absolute discretion.
(c) Each payment shall be allocated proportionately to the
Investment Funds in which the Members' Accounts are
invested at the time the payment is received by the
Trustee.
PAGE 56
8.6 Loan Treated As Member's Investment.
(a) Loan proceeds shall be paid from the Member's Account.
A promissory note of the same face value shall then be
credited as an asset of the Member's Account.
(b) Repayments received by the Trustee shall be transferred
to the Plan as soon as practicable.
8.7 Documents. No loan under this Article shall be made
until the Member has completed the appropriate form and submitted to the
Committee the following:
(a) A loan application setting forth such information as the
Committee deems appropriate.
(b) A promissory note designating the Plan as payee, stating
the amount, term, repayment schedule, interest rate, and
other terms and conditions consistent with this Article.
(c) A Member's written authorization and direction that the
Company shall withhold each payroll period, and remit to
the Trustee, the installment amounts determined under
section 8.5(a). This paragraph shall not apply to
Members who are former Employees and "parties in
interest" within the meaning of section 3(14) of the
Act.
(d) A written security agreement granting a conditional
security interest in the borrowing Member's Account, in
an amount equal to the principal of the loan at the time
the loan is originated to the Plan as security for
repayment of the loan.
8.8 Default. If a Member fails to make payment on a loan when due
and such failure continues for sixty days thereafter, or in the event of
the Member's Termination of Employment with the Company, bankruptcy,
impending bankruptcy, insolvency, or impending insolvency, the Committee
may declare the loan to be in default, in which case the entire unpaid
balance shall become due and payable. The Trustee may pursue collection
of the debt by any means generally available to a creditor where a
promissory note is in default.
PAGE 57
If the entire amount due is not paid by the Member within 30 days
following the declaration of default and if the Member has either
incurred a financial hardship within the meaning of section 7.7 or has
had a Termination of Employment with the Company, the Trustee may
exercise its security interest by reducing the Member's Vested Balance by
the amounts due and by amounts withheld for the payment of taxes payable
in connection with such reduction. Upon such exercise the note shall be
canceled to the extent of such reduction.
PAGE 58
Article IX. Administration of the Plan
---------------------------------------
9.1 Committee. The Plan shall be administered by a
Committee appointed by the Board. The Committee shall be composed of as
many members (not less than three) as may be appointed from time to time
and shall hold office at the pleasure of the Board. The Committee shall
be the administrator of the Plan, and the Committee shall be a fiduciary
under the Plan as a named fiduciary in accordance with the Act. The
Committee may appoint or designate other fiduciaries hereunder and may
allocate fiduciary responsibilities among them, including members of the
Committee.
9.2 Compensation and Expenses. A member of the Committee
shall serve without Compensation for services as such if he is an
Employee of the Company. He may receive reimbursement by the Company of
expenses properly and actually incurred. All expenses incurred by the
Committee, or a member thereof, in carrying out the duties of the
Committee shall be paid by the Company.
9.3 Manner of Action. A majority of the members of the
Committee at the time in office shall constitute a quorum for the
transaction of business. All resolutions adopted and other actions taken
by the Committee at any meeting shall be by vote of a majority of those
present at any such meeting. Upon concurrence in writing of a majority
of the members at the time in office, action of the Committee may be
taken without a meeting.
9.4 Chairman, Secretary, and Employment of Specialists. The
members of the Committee shall elect one of their number as Chairman and
shall elect a Secretary who may, but need not, be a member of the
Committee. They may authorize one or more of their number or any agent
to execute or deliver any instrument or instruments in their behalf and
may employ at the Company's or Trust's expense such counsel, auditors,
and other specialists and such clerical, actuarial, and other services as
they may require in carrying out the provisions of the Plan.
PAGE 59
9.5 Records. All resolutions, proceedings, acts, and
determinations of the Committee shall be recorded by the Secretary
thereof or under his supervision, and all such records, together with
such documents and instruments as may be necessary for the administration
of the Plan, shall be preserved in the custody of the Secretary.
9.6 Administration. The Committee shall be responsible for
the administration of the Plan, including instructing the Trustee
concerning all payments which should be made out of the Trust Fund
pursuant to the provisions of the Plan. The Committee shall have all
such powers as may be necessary to carry out the provisions hereof and
may, from time to time, establish rules for the administration of the
Plan and the transaction of the Plan's business. In making any such
determination or rule, the Committee shall pursue uniform policies as
from time to time established by the Committee. The Committee shall have
the exclusive right to make any finding of fact necessary or appropriate
for any purpose under the Plan including, but not limited to, the
determination of the eligibility for and the amount of any benefit
payable under the Plan. The Committee shall have the exclusive right to
interpret the terms and provisions of the Plan and to determine any and
all questions arising under the Plan or in connection with the
administration thereof, including, without limitation, the right to
remedy or resolve possible ambiguities, inconsistencies, or omissions, by
general rule or particular decision. The Committee shall make, or cause
to be made, all reports or other filings necessary to meet the reporting
and disclosure requirements of the Act which are the responsibility of
"plan administrators" under the Act. To the extent permitted by law, all
findings of fact, determinations, interpretations, and decisions of the
Committee shall be conclusive and binding upon all persons having or
claiming to have any interest or right under the Plan.
PAGE 60
9.7 Application for Benefits. Each person eligible for a
benefit under the Plan shall apply for such benefit by signing an
application form to be furnished by the Committee. Each such person
shall also furnish the Committee with such documents, evidence, data, or
information in support of such application as it considers necessary or
desirable.
9.8 Appeals from Denial of Claims. If any claim for
benefits under the Plan is wholly or partially denied, the claimant shall
be given notice in writing of such denial within a reasonable period of
time, setting forth the following information:
(a) the specific reason or reasons for the denial;
(b) specific reference to pertinent Plan provisions on which
the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is
necessary;
(d) an explanation that a full and fair review by the
Committee of the decision denying the claim may be
requested by the claimant or his authorized
representative by filing with the Committee, within
ninety days after such notice has been received, a
written request for such review; and
(e) if such request is so filed, the claimant or his
authorized representative may review pertinent documents
and submit issues and comments in writing within the
same ninety-day period specified in paragraph (d) above.
The decision of the Committee shall be made promptly, and not later than
sixty days after the Committee's receipt of the request for review,
unless special circumstances require an extension of time for processing,
in which case a decision shall be rendered as soon as possible, but not
later than 120 days after receipt of the request for review. If the
claim is denied
PAGE 61
on appeal, in whole or in part, the claimant shall be given a copy of the
decision promptly. The decision shall be in writing and shall include
specific reasons for the denial, written in a manner calculated to be
understood by the claimant, and specific references to the pertinent Plan
provisions on which the denial is based.
9.9 No Enlargement of Employee Rights. Neither the
establishment of the Plan, nor anything contained herein or in the Trust
Agreement nor any modification thereof, nor the operation of the Trust
Fund or any account, nor the payment of any benefits, shall be deemed to
give or be construed as conferring any legal or equitable rights upon any
Employee, Member, Beneficiary, or other person whomsoever, unless such
right shall be specifically provided for in the Plan or Trust Agreement,
or as giving any Employee, Member, or other person whomsoever the right
to require the Company either to continue his employment or to continue
the Plan or the making of contributions thereunder to the Trust, nor
shall it interfere with the right of the Company to discharge or retire
any Employee, Member, or other person whomsoever, at any time, without
regard to the effect which such treatment might have upon him as a Member
in the Plan, and all Employees and Members shall remain subject to
discharge to the same extent as if this Plan had never been adopted.
9.10 Expenses of Administration. The compensation of the
Trustee, any reasonable and proper attorney's fee incurred in the
administration of the Trust Fund, or other reasonable and proper Plan
expenses may be paid by the Trust, to the extent that they are not paid
directly by the Company.
9.11 Facility of Distribution. In the event that the
Committee shall find that a Member or any other person entitled to any
distribution under the Plan is unable to care for his affairs because of
illness or accident or any other reason, any such distributions due may,
unless claim shall have been made
PAGE 62
therefor by a duly appointed guardian, conservator, or other legal
representative, be made at the direction of the Committee to the spouse,
child, parent, or other blood relative or to any person deemed by it to
have incurred expenses for such Member or other person entitled to
distributions under the Plan, and such distribution so made shall be a
complete discharge of the liabilities of the Plan therefor.
9.12 Indemnity. The Company shall indemnify each member of
the Committee (which, for purposes of this subsection, includes any
Employee to whom the Committee has delegated fiduciary duties) against
any and all claims, losses, damages, and expenses, including counsel
fees, incurred by the Committee or member and any liability, including
any amounts paid in settlement with the Company's approval, arising from
the member's or Committee's action or failure to act, except when the
same is judicially determined to be attributable to the gross negligence
or willful misconduct of such member. The right of indemnity described
in the preceding sentence shall be conditioned upon (a) the timely
receipt of notice by the Company of any claim asserted against the
Committee member, which notice, in the event of a lawsuit, shall be given
within ten days after receipt by the Committee member of the complaint,
and (b) the receipt by the Company of an offer from the Committee member
of an opportunity to participate in the settlement or defense of such
claim.
9.13 Non-Alienation. No benefit payable at any time under
the Plan shall be subject to the debts or liabilities of a Member or his
Beneficiary. Any attempt to alienate, sell, transfer, assign, pledge, or
otherwise encumber any such benefit, whether presently or thereafter
payable, shall be void. No benefit under the Plan shall be subject in
any manner to alienation, sale, transfer, assignment, pledge, attachment,
garnishment, or encumbrance of any kind, except as provided under
Internal Revenue Code sections 401(a)(13) or 414(p) or under Article XIII
of the Plan.
PAGE 63
Article X. Amendment; Termination; Merger
------------------------------------------
10.1 Right to Amend or Terminate. The Company reserves the
right at any time and from time to time to amend this agreement, or
discontinue or terminate the Plan by delivering to the Committee a copy
of an amendment or appropriate Board resolution of discontinuance or
termination certified by an officer of the Company; provided, however,
that except as provided in section 10.2, the Company shall have no power
to amend or terminate this agreement in such manner as would cause or
permit any of the Trust assets to be diverted to purposes other than for
the exclusive benefit of the Employees of the Company or their
Beneficiaries or would cause any reduction in the amount theretofore
credited to any Member or would cause or permit any portion of the Trust
assets to revert to or become the property of the Company; and provided,
further, that the duties or liabilities of the Committee shall not be
changed without its written consent.
10.2 Amendment for Tax Exemption. The Company reserves the
right to amend this agreement in such manner as may be necessary or
advisable so that said Plan may continue to qualify as a qualified
employee benefit plan under the provisions of the Code as now in force or
as it may hereafter be changed or amended, and any such amendment may be
made retroactively.
10.3 Terminations and Partial Terminations. In the event of,
and upon, the Company's termination or partial termination of the Plan or
the Company's complete discontinuance of contributions, the interest in
the Accounts of each Member who shall be an Employee of the Company on
the date of such termination or complete discontinuance (or, in the case
of a partial termination, the Members affected thereby) shall vest. For
the purposes hereof "partial termination" shall have the same meaning as
under section l.4ll(d)-2 of the Treasury Regulations.
PAGE 64
10.4 Mergers; Consolidations; Transfers of Assets. The Plan
shall not be merged or consolidated with, nor shall any of its assets or
liabilities be transferred to, another plan unless, immediately after
such merger, consolidation or transfer, each Member and Beneficiary shall
be entitled to receive a benefit which is at least as large as the
benefit he or she would have been entitled to receive if the Plan had
been terminated immediately prior to such merger, consolidation, or
transfer.
PAGE 65
Article XI. Leased Employees
-----------------------------
11.1 Treatment of Leased Employees Under the Plan.
(a) Eligibility. Solely for purposes of determining when an
individual is eligible to participate in the Plan, hours
of service as a Leased Employee (as defined below) shall
be treated as Hours of Service as an Employee.
(b) Vesting. For purposes of determining when an
individual vests in amounts in his or her Matching
Contributions Account, the individual shall be treated
as an Employee in the active service of the Company as
of the close of a Plan Year if he or she is performing
services as a Leased Employee as of the close of such
Plan Year.
(c) Limitation on Annual Additions. For purposes of
determining the maximum Annual Additions which may be
contributed to this Plan on behalf of a Leased Employee
for any Plan Year:
(1) any contributions or benefits which are
provided under a plan maintained by a
Leasing Organization (as defined below) and
which are attributable to an individual's
service as a Leased Employee performed for
the Company or a Related Person (as defined
below) shall be treated as provided by the
recipient of such services, and
(2) Limitation Compensation shall include the
amounts specified in section 4.17(c)(4)
which are received by the individual for his
or her service as a Leased Employee.
(d) Eligibility to Participate. A Leased Employee shall not
be eligible to become a Member under the Plan unless and
except to the extent that he or she shall qualify as an
Eligible Employee without regard to the provisions of
this Article XI.
PAGE 66
11.2 Service Not Counted. This Article XI shall not apply to
any Leased Employee for the entire period during which such individual is
covered by a Leasing Organization Pension Plan (as defined below), unless
Leased Employees constitute more than 20 percent of the Company's
Nonhighly Compensated Work Force (as defined below).
11.3 Definitions. For purposes of this Article--
(a) Leased Employee shall mean any individual who provides
services for the Company if:
(1) such services are provided pursuant to an
agreement between the Company and a Leasing
Organization;
(2) such services are of a type historically
performed in the business field of the
Company by a common law employee;
(3) such individual is not a common law employee
of the Company; and
(4) such individual has performed such services
as a Leased Employee for the Company and any
Related Person on a substantially full-time
basis for a period of at least one year.
For purposes of the preceding sentence, an individual is
considered to have performed services on a substantially
full-time basis for a period of at least one year if
during any consecutive twelve-month period such person
has either (A) performed at least 1,500 Hours of Service
for the Company and any Related Person (as defined
below), or (B) performed services for the Company and
any Related Person for a number of hours of service at
least equal to 75 percent of the number of hours
customarily performed by a common law employee of the
Company or Related Person in the particular position.
(b) Leasing Organization shall have the same meaning as
under Code section 414(n)(2)(A).
PAGE 67
(c) Leasing Organization Pension Plan shall mean a plan
maintained by a Leasing Organization which with respect
to the Leased Employee:
(1) is a money purchase pension plan with a
nonintegrated Company contribution rate of
at least 10 percent,
(2) provides for immediate participation and for
full and immediate vesting, and
(3) provides for immediate participation for
each Leased Employee (other than Leased
Employees who perform substantially all of
their services for the Leasing Organization
and Leased Employees whose compensation
(within the meaning of Code
section 414(n)(5)(C)(iii)) from the Leasing
Organization is less than $1,000 in each
Plan Year during the four-plan-year period
ending with the Plan Year for which a
determination is being made).
(d) Related Person shall have the meaning prescribed in Code
section 144(a)(3).
(e) Nonhighly Compensated Work Force shall have the meaning
in Code section 414(n)(5)(C)(ii).
11.4 Construction. The purpose of this Article XI is to
comply with the provisions of Code section 414(n). All provisions of
this Article shall be construed consistently therewith, and, without
limiting the generality of the foregoing, no individual shall be treated
as a Leased Employee except as required under such Code section 414(n).
PAGE 68
Article XII. Top-Heavy Plan Provisions
---------------------------------------
12.l General Rule. In the event that the Plan becomes
top-heavy, or is a member of a top-heavy group, the provisions of this
Article shall apply.
12.2 When Plan is Top-Heavy. The Plan shall be top-heavy for
a Plan Year if, as of the Determination Date (as defined below), the
aggregate of the Account balances of Key Employees (as defined below)
under the Plan exceeds 60 percent of the aggregate of the Account
balances of all Employees under the Plan. For purposes of this section
and section 12.3:
(a) Account balances shall include the aggregate amount of
any distributions (including distributions from
terminated plans) made with respect to the Employee
during the five-year period ending on the Determination
Date and any contributions due but unpaid as of said
determination date, and
(b) the Account balance of any individual who has not
performed services for the Company or the Affiliates at
any time during the five-year period ending on the
Applicable Determination Date shall not be taken into
account.
The determination of the foregoing ratio shall be made in accordance with
Code section 4l6(g), which is incorporated herein by this reference.
Notwithstanding the foregoing, the Plan shall not be top-heavy if it is
part of an affiliation group of plans, as defined in section 12.3(a),
that is not a top-heavy group.
12.3 When Plan is in Top-Heavy Group. A Plan is a member of
a top-heavy group with respect to a Plan Year if, as of the Determination
Date, it is part of an affiliation group of plans which is top-heavy.
For purposes of this section:
(a) An "affiliation group of plans" includes all plans
qualified under Code section 40l(a) which are
PAGE 69
maintained by the Company or an Affiliate and (1) in
which a Key Employee is a Member or (2) which enables
any other plan described in paragraph (1) to meet the
requirements of Code section 40l(a)(4) or 4l0.
(b) An affiliation group of plans shall be a "top-heavy
group" with respect to a Plan Year if, as of the
Determination Date, the sum of:
(1) the present value of the cumulative accrued
benefits for Key Employees under all defined
benefit plans included in such group and
(2) the aggregate of the accounts of Key
Employees under all defined contribution
plans included in such group exceeds 60
percent of a similar sum determined for all
Employees covered under the affiliation
group of plans. In making this
determination, the provisions of
section 12.2 (other than the first sentence
thereof) shall be applicable.
12.4 Minimum Contribution. For each Plan Year with respect
to which the Plan is top-heavy or is a member of a top-heavy group, the
minimum amount allocated under the Plan (other than Elective
Contributions) for the benefit of each Member who is not a Key Employee
and who is otherwise eligible for such an allocation, together with
amounts allocated under all other qualified defined contribution plans
maintained by the Company or an Affiliate, shall be the lesser of:
(a) 3 percent of the Member's Compensation for the Plan Year
or
(b) the Member's Compensation times a percentage equal to
the largest percentage of such Compensation allocated
under such plans with respect to any Key Employee for
the Plan Year (including Elective Contributions).
The minimum contribution is determined without regard to any Social
Security contribution. The minimum contribution shall be
PAGE 70
made to any non-key Member who is employed on the last day of the Plan
Year without regard to the Member's failure to complete 1,000 Hours of
Service during the Plan Year, the Member's failure to make Elective
Contributions to the Plan, or the Member's Compensation. This section
shall not apply to an Employee covered under a qualified defined benefit
plan maintained by the Company if the Employee's vested accrued benefit
thereunder satisfies the requirements of Code section 4l6(c).
12.5 Adjustment in Maximum Limitation on Account Additions.
For any Plan Year with respect to which the Plan is top-heavy, or a
member of a top-heavy group, sections 4.17(c)(2)(A) and (3)(A) shall be
applied by substituting "l.0" for "l.25".
12.6 Definitions. For purposes of this Article XII--
(a) Determination Date with respect to a Plan Year shall
mean (1) the last date of the preceding Plan Year, or
(2) in the case of the first Plan Year of any plan, the
last day of such Plan Year.
(b) Key Employee shall mean an Employee, former Employee, or
a Beneficiary as prescribed in Code section 4l6(i)(l).
(c) Non-key Employee shall mean any Employee who is not a
Key Employee.
12.7 Top-Heavy Vesting Schedule. In the event a Member's
employment with the Company terminates for reasons other than retirement,
disability, or death, such Member shall have a fully vested interest in
his or her Elective Contributions Account, Matched After-Tax
Contributions Account, Unmatched After-Tax Contributions Account,
Qualified Nonelective Contributions Account, Qualified Matching
Contributions Account, and Rollover
PAGE 71
Account plus a vested interest in his or her Matching Contributions
Account in accordance with the following schedule:
Years
of Service Vested Percentage
---------- -----------------
Less than 2 0%
2 but less than 3 30
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
Such minimum vesting schedule applies to the Matching Contributions
Account of the Member, including amounts credited before the effective
date of Code section 416 and amounts credited before the Plan became top-
heavy. However, this schedule does not apply to the Matching
Contributions Account of any Member who does not work an Hour of Service
after the Plan has initially become top-heavy. In the event the Plan
ceases to be top-heavy for any subsequent Plan Year, a Member's vesting
percentage shall in no event be less than the percentage determined under
this section 12.7 as of the last day of the last Plan Year during which
the Plan was top-heavy and a Member who has completed three or more Years
of Service at such time shall continue to have his or her vested interest
in amounts credited to the Matching Contributions Account determined in
accordance with the above vesting schedule.
PAGE 72
Article XIII. Qualified Domestic Relations
-------------------------------------------
Orders
------
13.1 Applicability of Article. The Committee shall apply the
provisions of this Article with regard to a Domestic Relations Order (as
defined below) to the extent not inconsistent with Code section 414(p).
13.2 Establishment of Procedures. The Committee shall
establish procedures, consistent with Code section 414(p), to determine
the qualified status of any Domestic Relations Order, to administer
distributions under any Qualified Domestic Relations Order (as defined
below), and to provide to the Member and the Alternate Payee(s) (as
defined below) all notices required under Code section 414(p) with
respect to any Domestic Relations Order.
13.3 Determination of Qualified Domestic Relations Order
Status. Within a reasonable period of time after the receipt of a
Domestic Relations Order (or any modification thereof), the Committee
shall determine whether such order is a Qualified Domestic Relations
Order.
13.4 Establishment of Segregated Accounts and Payment
Procedures.
(a) Separate Account for Members Not Yet Entitled to Receive
Benefits. If a Domestic Relations Order has been
determined to be a Qualified Domestic Relations Order in
accordance with section 13.3, a separate account for the
benefit of the Alternate Payee named in such order shall
be established. The Committee shall cause to be
transferred from the affected Member's Accounts to the
Alternate Payee's account such amount as the Committee
deems reasonable and necessary to satisfy such order.
If the Committee subsequently determines that the
amounts it has caused to be so transferred are less than
are reasonable and necessary to satisfy such order, the
Committee may cause to be
PAGE 73
transferred such additional amounts as it deems
reasonable and necessary to satisfy such order. If the
Committee subsequently determines that the amounts it
has caused to be so transferred are more than are
reasonable or necessary to satisfy such order, the
Committee may cause any such excess amounts to be paid
to the person or persons who would have been entitled to
such amounts if there had been no order; provided,
however, that if the Member or the Member's
Beneficiaries are not yet entitled, or have not elected,
to receive benefit payments under the Plan, such excess
amounts shall be credited to the Member's Accounts and
invested in accordance with the investment election most
recently submitted by the Member pursuant to
section 5.3. The amount of any transfers caused to be
made by the Committee pursuant to this subsection (a)
shall be determined in the sole and absolute discretion
of the Committee.
(b) Temporary Holding Account for Members Entitled to
Receive Benefits. If, during any period in which the
issue of whether a Domestic Relations Order is a
Qualified Domestic Relations Order is being determined
(by the Committee, by a court of competent jurisdiction,
or otherwise), the Alternate Payee would be entitled to
any payment if the order had been determined to be a
Qualified Domestic Relations Order, the Committee shall
cause to be segregated in a separate account all amounts
which would have been payable to any Alternate Payee
during such period if such order had been determined to
be a Qualified Domestic Relations Order.
(c) Payment from Temporary Holding Account to Plan Member in
Certain Cases. If, by the expiration of the eighteen-
month period beginning on the date the first payment
would be required to be made to an Alternate Payee under
a Domestic Relations Order, either it has been
determined that a Domestic Relations Order is not
PAGE 74
a Qualified Domestic Relations Order or the issue as to
whether such order is a Qualified Domestic Relations
Order has not been resolved, the Committee shall cause
to be paid all amounts which have been segregated by
reason of such order pursuant to subsection (b) above,
including any earnings accrued thereon, to the person or
persons who would have been entitled to such amounts if
there had been no order. Notwithstanding the preceding
sentence, if the Member or the Member's Beneficiaries
are not yet entitled, or have not elected, to receive
benefit payments under the Plan, such segregated
amounts, including all earnings having accrued thereon,
shall be restored to the Member's Accounts and invested
in accordance with the investment election most recently
submitted by the Member pursuant to section 5.3.
(d) Payment from Separate Account and Temporary Holding
Account to Alternate Payee if Order is Determined to be
a Qualified Domestic Relations Order. If a Domestic
Relations Order (or any modification thereof) is
determined to be a Qualified Domestic Relations Order,
the Committee shall instruct the Trustee to apply, on a
prospective basis, the terms and provisions of such
Qualified Domestic Relations Order, and, in the
event any amounts were segregated by reason of such
order pursuant to subsection (b) above, the Committee
shall cause to be paid in accordance with the provisions
of the Plan all amounts which have been so segregated
(and have not been released pursuant to subsection (c)),
including any earnings accrued thereon, to the Alternate
Payee(s) entitled thereto.
13.5 Subsequent Determination or Order to be Applied
Prospectively. If a determination is made after the expiration of the
18-month period beginning on the date the first payment would be required
to be made to an Alternate Payee under a
PAGE 75
Domestic Relations Order that such order (or any modification thereof) is
a Qualified Domestic Relations Order, such order shall be applied
prospectively only.
13.6 Withdrawals, Distributions, and Loans by or to Members.
(a) Withdrawals and Distributions. A Member shall not be
permitted to withdraw from the Plan, nor shall there be
distributed to a Member, any amounts being held in a
segregated account by reason of a Domestic Relations
Order.
(b) Loans. In determining the maximum amount of any loan to
a Member pursuant to Article VIII, the Committee shall
not include in the Vested Balance of the Member the
vested portion of his or her Accounts being held in a
segregated account by reason of a Domestic Relations
Order.
13.7 Investment. To the extent the Committee, in its sole
and absolute discretion, deems reasonable and necessary to satisfy the
terms of a Domestic Relations Order, the Committee shall limit the
investment discretion of the Member and any Alternate Payee(s) under
section 5.3 and shall direct the investment of all amounts held in a
segregated account by reason of such order in any investment vehicle
which the Committee shall select in its sole and absolute discretion.
13.8 Definitions. For purposes of this Article:
(a) Alternate Payee shall mean any spouse, former spouse,
child, or other dependent of a Member who is recognized
by a Domestic Relations Order as having a right to
receive all, or a portion of, the benefits payable under
the Plan with respect to such Member.
(b) Domestic Relations Order shall mean any judgment,
decree, or order (including approval of a property
settlement agreement) which:
(1) relates to the provision of child support,
alimony
PAGE 76
payments, or marital property rights to a
spouse, former spouse, child, or other
dependent of a Member and
(2) is made pursuant to a state domestic
relations law (including a community
property law).
(c) Qualified Domestic Relations Order shall mean a Domestic
Relations Order which meets the requirements of Code
section 414(p)(1).
Article XIV. Miscellaneous Provisions
--------------------------------------
14.l Construction. Except as otherwise provided in
section 5l4 of the Act, the Plan shall be construed and regulated in
accordance with the laws of the State of New Jersey.
14.2 Nonassignability. Except to the extent permissible
under Code sections 40l(a)(l3) and 414(p) and Article XIII, no Account or
interest under this Plan shall be anticipated, assigned (either at law or
in equity), alienated or subject to attachment, garnishment, levy,
execution, or other legal or equitable process (whether voluntary or
involuntary); provided, however, that nothing herein shall prevent a
Member from assigning such Member's interest under this Plan as security
for the repayment of any loan made to him or her from the Plan pursuant
to Article VIII. Any attempt at such a prohibited assignment,
alienation, attachment, garnishment, levy, execution, pledge, transfer,
mortgage, or encumbrance shall be void and unenforceable.
14.3 Missing Persons. If the Company is unable to locate a
proper payee within one year after an Account becomes payable, the
Company may treat the balance credited to the Account as a forfeiture;
however, if a claim for benefits is subsequently presented by a person
entitled to a payment, the forfeited amount shall be recredited to the
Account upon verification of the claim, except for those amounts that
have been paid pursuant to
PAGE 77
an escheat or other applicable law. Forfeitures restored under this
subsection shall be paid from forfeitures under section 6.3 and, to the
extent these are not sufficient, from an additional Company contribution.
14.4 Interest of Members. The sole interest of each Member
and the Member's respective Beneficiaries under the Plan shall be to
receive the benefits provided for hereunder as and when the same shall
become due and payable in accordance with the terms hereof, and neither
any Member nor any such Beneficiary shall have any right, title or
interest in or to any asset of the Plan.
14.5 No Right to Employment Granted by Plan. Nothing
contained herein shall require the Company to continue any Member in its
employ, or require any Member to continue in the employ of the Company,
or require the Company to continue to compensate any Member during a
leave of absence, or require the Company to compensate any Member during
any leave of absence at the same rate as prior to the commencement
thereof, or require the Company to rehire any former Member.
14.6 Incompetency. Every person receiving or claiming
benefits under the Plan shall be conclusively presumed to be mentally
competent and of age until the Committee receives written notice, in a
form and manner acceptable to it, that such person is incompetent or a
minor, and that a guardian, conservator, or other person legally vested
with the care of his or her estate has been appointed. In the event that
such a guardian or conservator of the estate of any person receiving or
claiming benefits under the Plan shall be so appointed, payments shall be
made to such guardian or conservator, provided that proper proof of
appointment is furnished in a form and manner suitable to the Committee.
To the extent permitted by law, any payment under the provisions of this
section shall be a complete discharge of liability under the Plan.
PAGE 78
14.7 Titles. The titles of sections are included only for
convenience and shall not be construed as part of this Plan or in any
respect affecting or modifying its provisions.
PAGE 79
* * * * *
IN WITNESS WHEREOF, SELECTIVE INSURANCE COMPANY OF AMERICA has
caused this instrument to be executed by its duly authorized officers
this 15th day of August, l996, effective as of July 1, 1993.
Corporate Seal SELECTIVE INSURANCE COMPANY
OF AMERICA
By: /s/ James W. Entringer
------------------
James W. Entringer
Attest: /s/ Susan Perretta
------------------
Susan Perretta
Title: Corporate Secretary
PAGE - APPENDIX A
APPENDIX A
----------
PARTICIPATING COMPANIES
-----------------------
PAGE - SUPPLEMENT ONE
AMENDMENT NO. 1 TO THE
-----------------------
SELECTIVE INSURANCE RETIREMENT SAVINGS PLAN
-------------------------------------------
The Selective Insurance Retirement Savings Plan (the "Plan") is amended
effective July 1, 1993, unless otherwise noted, as follows:
1. Section 3.7 of Article III is hereby amended by replacing One-Year
Period of Severance with five (5) consecutive One-Year Periods of
Severance.
2. Section 3.7(c)(2)(A) of Article III is hereby amended by deleting the
phrase "be reinstated" and replacing it with "continue to be
credited."
3. Sections 4.8(a) and (b) of Article IV are hereby amended to read as
follows:
"(a) Change. A Member may change the amount of his or her
Elective Contributions and/or After-Tax Contributions as of
the first payroll period of any month by giving reasonable
notice to the Committee in accordance with procedures
adopted by the Committee from time to time.
(b) Suspension. A Member may suspend his or her Elective
Contributions and/or After-Tax Contributions as of the first
payroll period of any month by giving reasonable notice to
the Committee in accordance with procedures adopted by the
Committee from time to time. During a period of suspension
of Elective Contributions and After-Tax Contributions, no
Matching Contributions shall be made on behalf of such
Member."
4. Section 4.9 of Article IV is hereby amended by adding the following to
the end thereof:
"In the event a matching contribution relates to an excess
Elective Contribution under Section 4.09, or an Excess
Contribution under Section 4.12, the Matching Contribution and
income allocable thereto shall be forfeited. The income
allocable to a Matching Contribution shall be determined in
accordance with the procedure for determining income allocable to
excess Matching Contributions set forth in Section 4.14."
5. Section 4.12(a) of Article IV is hereby amended by adding the
following to the end thereof:
"The income or loss allocable to the Excess Contributions shall
be the amount determined by multiplying the income or loss
allocable to the Member's accounts containing the excess amounts
for the Plan Year by a fraction, the numerator of which is the
Excess Contributions on behalf of the Member for the Plan Year
and the denominator of which is the Member's account balance in
the accounts containing the excess amounts as of the Valuation
Date of the Plan Year in which the Excess Contribution is made
without regard to any gain or loss allocable to such total amount
for the Plan Year."
6. Section 4.12(b) of Article IV is hereby amended by adding the
following to the end thereof:
Excess Elective Contributions shall be allocated to Members who
are subject to the family member aggregation rules as defined in
Section 414(q)(6) of the Code in proportion to the Election
Contributions and amounts treated as Elective Contributions of
each family member that is combined to determine the combined
actual deferral percentage, in the manner prescribed by the
regulations."
7. Section 4.12(c) of Article IV is hereby amended by adding the
following to the end thereof:
"Excess Contributions and income allocable thereto shall be
distributed no later than March 15 of the Plan Year following the
Plan Year in which any such Excess Contributions were made, but
in no event shall the Excess Contributions be distributed later
than the last day of the Plan Year following the Plan Year in
which the contributions giving rise to the Excess Contributions
were allocated. If Excess Contributions are distributed more
than 2 1/2 months after the last day of the Plan Year in which
such excess amounts arose, a ten (10) percent excise tax will be
imposed on the Company maintaining the Plan with respect to those
amounts."
8. Section 4.13 of Article IV is hereby amended by adding to the end of
the third sentence "...; provided, however, Elective Contributions
satisfy the limitation of Section 4.12 both before and after they are
applied to determine the contribution percentage."
9. Section 4.14(a) of Article IV is hereby amended by adding the
following to the end thereof:
"The income or loss allocable to the excess Matching
Contributions and After-Tax Contributions shall be the amount
determined by multiplying the income or loss allocable to the
Member's accounts containing the excess amounts for the Plan Year
by a fraction, the numerator of which is the excess amounts on
behalf of the Member for the Plan Year and the denominator of
which is the Member's account balance in the accounts containing
the excess amounts as of the Valuation Date of the Plan Year in
which the Excess Matching Contributions and After-Tax
Contributions are made without regard to any gain or loss
allocable to such total amount for the Plan Year."
10. Section 4.14(b) of Article IV is hereby amended by adding the
following to the end thereof:
"Excess Matching Contributions and After-Tax Contributions shall
be allocated to Members who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code in proportion
to the Matching and After-Tax Contributions or amounts treated as
Matching Contributions of each family member that is combined to
determine the combined actual contribution percentage, in the
manner prescribed by the regulations."
11. Section 4.14(c) of Article IV is hereby amended by adding the
following to the end thereof:
"Excess Matching Contributions and After-Tax Contributions and
income allocable thereto shall be distributed no later than March
15 of the Plan Year following the Plan Year in which any such
excess contributions were made, but in no event shall the excess
contributions be distributed later than the last day of the Plan
Year following the Plan Year in which the contributions giving
rise to the excess Matching and After-Tax Contributions were
allocated. If Excess Matching and After-Tax Contributions are
distributed more than 2 1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Company maintaining the Plan
with respect to those amounts. In order to satisfy Section
4.14(c), the Committee, in its discretion, may forfeit nonvested
Matching Contributions and the income allocable thereto in lieu
of distributing Excess Matching Contributions."
12. Section 4.18 of Article IV is hereby amended by adding the following
to the end thereof:
"The amount returned will not exceed the amount of the
contribution reduced by any loss incurred by the Trust."
13. Section 6.4 of Article VI is hereby amended by deleting the first
sentence and in its place substituting the following:
"If a Member terminated employment before his interest in his
Matching Contributions Account is fully vested, that portion
which is not vested shall be forfeited as of the last day of the
Plan Year in which (i) he receives a distribution of the
nonforfeitable portion of his Vested Balance or (ii) experiences
five (5) consecutive One-Year Periods of Severance in accordance
with Section 6.3. If the value of the Member's vested Matching
Contributions Account is zero, the Member shall be deemed to have
received a distribution of such Vested Balance. In the case
of a Member who is deemed to have received a distribution and is
rehired before he incurs five (5) consecutive One-Year Periods of
Severance, his forfeited Matching Contributions Account shall be
restored upon reemployment.
If a Member who has received a distribution of the nonforfeitable
portion of his Vested Balance is rehired before he incurs five
(5) consecutive One-Year Periods of Severance, he may repay to
the Trustee an amount equal to the distribution amount. The
Member must make repayment prior to the earlier of the date he
would incur five (5) consecutive One-Year Periods of Severance
after such distribution, or five (5) years after the date on
which he is reemployed. Such repayment shall be credited to his
Vested Balance and an additional amount equal to the forfeited
portion of his Matching Contributions Account will either be
allocated to the Member's Vested Balance out of current
forfeitures or contributed by the Company as of the last day of
that Plan Year. It shall be the duty of the Company to give
timely notification to any rehired Employee if such Employee is
eligible to make a repayment, of his right to make such a
repayment, and of the consequences of not making such repayment.
Any amount reinstated pursuant to this Section shall be invested
in the Investment Funds in the proportions selected in the most
recent direction filed with the Committee pursuant to Section 5.3
of the Plan."
14. Section 6.5 of Article VI is hereby amended by deleting the first
sentence and in its place substituting the following:
"If a Member with a partially vested interest in his or her
Matching Contributions Account receives a distribution or
withdrawal, other than a cash-out distribution described in
Section 6.4, and at such time the Member has not incurred five
consecutive One-Year Periods of Severance, then the portion of
such Member's Matching Contributions Account which is later
distributable shall be determined as follows:
P ( AB + [R x D] ) - ( R x D )."
15. Section 7.4 of Article VII is hereby amended by replacing the phrase
"section 6.3" with the phrase "section 6.4."
16. Section 7.5(d) of Article VII is hereby amended by deleting the phrase
"Vested Balances" and replacing it with "Accounts."
17. Section 10.3 of Article X is hereby amended by deleting the clause
"who shall be an Employee of the Company."
IN WITNESS WHEREOF, the Company has directed its duly authorized officer to
execute this Amendment No. 1 this 15th day of August, 1996.
Corporate Seal SELECTIVE INSURANCE COMPANY
OF AMERICA
By: /s/ James W. Entringer
------------------
James W. Entringer
Attest: /s/ Susan Perretta
------------------
Susan Perretta
Title: Corporate Secretary
PAGE - SUPPLEMENT TWO
AMENDMENT NO. 2 TO THE
----------------------
SELECTIVE INSURANCE RETIREMENT SAVINGS PLAN
-------------------------------------------
WHEREAS, Selective Insurance Company of America (the "Company")
maintains the Selective Insurance Retirement Savings Plan (the "Plan") for
the benefit of its employees; and
WHEREAS, the Company restated the Plan in its entirety in order to
comply with the Tax Reform Act of 1986 and other recent tax legislation; and
WHEREAS, the Company now desires to further amend the Plan to comply
with the Omnibus Budget Reconciliation Act of 1993 and to incorporate a
clarification issued by the Internal Revenue Service with respect to the
consent rules;
NOW, THEREFORE, be it
RESOLVED, that the Plan is hereby amended effective January 1, 1994
unless otherwise noted as follows:
1. Section 2.14 of Article II is hereby amended by substituting the
number "$150,000" for the number "$200,000", and deleting the phrase "the
last sentence of" from the first sentence of the last paragraph. The
sentence, as revised, shall read "[t]he maximum amount of Compensation taken
into account under the Plan for any Plan Year shall be $150,000, or such
other amount as determined by the Secretary of the Treasury to reflect a
cost-of-living adjustment under Code section 401(a)(17)".
2. Section 7.5(c)(1) of Article VII is hereby amended by adding the
following to the end thereof:
"Distribution may commence less than 30 days after the participant is
advised that he can elect an immediate distribution, provided that:
(i) the Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution, and
(ii) the Participant, after receiving the notice, affirmatively
elects an immediate distribution."
IN WITNESS WHEREOF, the Company has authorized and directed its duly
authorized officer to execute this Amendment No. 2 to the Plan this 15th day
of August, 1996.
Corporate Seal Selective Insurance Company of America
By: /s/ James W. Entringer
------------------
James W. Entringer
Attest: /s/ Susan Perretta
------------------
Susan Perretta
Title: Corporate Secretary
PAGE - SUPPLEMENT THREE
Third Amendment to the
----------------------
Selective Insurance Company of America
--------------------------------------
Retirement Savings Plan
-----------------------
Whereas, Selective Insurance Company of America (the "Company") has reviewed
the Selective Insurance Company of America Retirement Savings Plan as amended
and restated as of July 1, 1993 and as subsequently amended as of July 1,
1993 and as of January 1, 1994 (the "Savings Plan");
Whereas, Section 10.1 of Article X of the Savings Plan provides, in part,
that the Savings Plan may be amended at any time and from time to time by the
Company; and
Whereas, the Company has examined the Savings Plan provisions and the current
maintenance and administration of the Savings Plan and has determined, after
consultation with the appropriate personnel of the Company, that the Savings
Plan should be amended.
Now, therefore, the Savings Plan is hereby amended, effective July 1, 1996,
unless otherwise specified, as follows:
First: Article II is amended by adding new sections 2.30 and 2.57 as follows,
by renumbering former sections 2.30 through 2.55 as now sections 2.31 through
2.56 respectively, and by renumbering former sections 2.56 through 2.64 as
now sections 2.58 through 2.66 respectively:
"2.30 "Fair Market Value" shall mean, with respect to the purchase or
sale of Selective Insurance Group, Inc. common stock, the price of a
share of such common stock as reported on the principal securities
exchange on which such shares of common stock are then listed or
admitted to trading at such time. Notwithstanding the above, with
respect to the purchase of shares of the Selective Insurance Group, Inc.
common stock held in the Selective Insurance Stock Fund on any day,
"Fair Market Value" shall mean, (i) the closing price at the end of the
preceding business day of a share of such common stock as reported on
the principal securities exchange on which shares of such common stock
are then listed or admitted to trading, (ii) if not reported on such
day, the closing price at the end of the business day two days prior to
such day of a share of such common stock as reported on such principal
securities exchange, or (iii) if not reported on such day, the fair
market value of a share of such common stock, as determined in good
faith by the Committee in its absolute discretion."
"2.56 "Selective Insurance Stock Fund" shall mean an investment fund
comprised of shares of Selective Insurance Group Inc. common stock, $2
par value, in which dividends, if any, are used to purchase additional
shares of such common stock. Notwithstanding the foregoing, the
Selective Insurance Stock Fund may also hold, from time to time, cash,
short-term obligations of the United States Government, commercial
paper, or other instruments of a short-term nature, unless otherwise
provided by applicable law."
Second: Section 5.2 of Article V of the Savings Plan is hereby amended by
deleting said section and replacing it with the following:
"5.2 Investment Funds. The Investment Funds, as listed on Appendix A
attached hereto, shall be established and maintained by the Trustee as
directed by the Committee. The Committee shall also have the discretion
to direct the Trustee to establish and terminate Investment Funds from
time to time as it deems appropriate."
Third: Section 5.3 of Article V of the Savings Plan is hereby amended by
deleting paragraphs (a) and (b) and replacing them with (a) and (b) below:
"(a) Election. At such time and in such manner as the Committee shall
prescribe, and subject to the provisions of Article XIII (Qualified
Domestic Relations Orders), each Member, including each Member who
is a former Employee and the Beneficiary of a deceased Member, may
file with the Committee (or its designated agent) such Member's
direction with respect to the percentage of the Member's Elective
Contribution Account and, if applicable, the portion of future
contributions to the Elective Contributions Account to be allocated
to each of the Investment Funds. Each Member may elect to have the
amounts in his or her Elective Contributions Account invested in
increments equal to any whole percentage of the total in such
Account in one or more of the Investment Funds. Except as provided
in subsection 5.3(c) hereof, a Member's investment elections with
respect to his or her Elective Contributions Account shall apply
equally to his or her Matching Contributions Account, Matched
After-Tax Contributions Account, Unmatched After-Tax Contributions
Account, Qualified Nonelective Contributions Account and Qualified
Matching Contributions Account. A Member may also make an
investment direction with respect to his or her Rollover Account;
provided, however, that if the Member does not make such an
election, the Member's election with respect to his or her Elective
Contributions Account shall apply equally to his or her Rollover
Account, if any. Each Member is solely responsible for the
selection of his or her investment options. The fact that an
Investment Fund is available to Members for investment under the
Plan shall not be construed as a recommendation for investment in
that Investment Fund.
(b) Change of Election - Future Contributions. Any investment direction
given by a Member shall be deemed to be a continuing direction
until changed. A Member may change his or her investment elections
under this paragraph (b) in increments equal to any whole
percentage of the total amount in his or her Elective Contributions
Account with respect to future contributions via telephone fund
transfer, provided the Member had previously authorized such
telephonic transactions on a form supplied by the Committee (or its
designated agent). A Member may elect to change his or her
investment election with respect to future contributions via
telephone transfer as often an the Member chooses. The election
shall be effective as of that date, or as of the following date if
the date of transfer is not a business day or if the election is
made after the time which the Committee (or its designated agent)
establishes as the deadline for effectuating a same day election.
Fourth: Section 5.3 of Article V of the Savings Plan is amended by adding a
new paragraph (e) to the end thereof as follows:
"(e) Cessation of Transfers Into and Future Contributions to Terminated
Investment Funds. Upon the termination of an Investment Fund by the
Committee pursuant to section 5.2 hereof, no Member may transfer
amounts in his or her Accounts into such a terminated Investment
Fund nor shall any Member be permitted to direct any future
contributions to such terminated Investment Fund. Each Member who
immediately prior to the date of the termination of an Investment
Fund had a portion or all of his or her Accounts invested in such
terminated Investment Fund shall be permitted to either transfer
such amounts to other Investment Funds or to continue the
investment of such amounts in the terminated Investment Fund for a
one-year period following the termination of such Investment Fund.
If such Member does not transfer the amounts invested in the
terminated Investment Fund by the end of the one-year period, such
Member will be deemed to have elected to transfer such amounts to
the T. Rowe Price Prime Reserve Fund. Each Member who, as of the
date of the termination of an Investment Fund, has in place a
continuing investment direction for a portion or all of his or her
future contributions to be invested in the terminated Investment
Fund shall be permitted to amend such continuing investment
direction to direct such future contributions to other Investment
Funds as of the date such Investment Fund is terminated. If any
such Member does not change his or her continuing investment
direction by the date of such termination, such Member shall be
deemed to have directed such future contributions to be invested in
the T. Rowe Price Prime Reserve Fund. The Committee shall attempt,
but shall not be required to, give affected Members at least
30 days prior notice of the termination of an Investment Fund, the
cessation of transfers into and future contributions to such
Investment Fund, and the opportunity to redirect affected
investments as described in this subsection 5.3(e)."
Fifth: Effective September 1, 1996, section 5.3 of Article V of the Savings
Plan is hereby amended by adding a new paragraph (f) to the end thereof as
follows:
"(f) Direction of Matching Contributions Account. Notwithstanding
anything contained herein to the contrary, effective September 1,
1996, a Member shall be permitted to direct the investment of 100%
of the amount in his or her Matching Contributions Account into the
Selective Insurance Stock Fund. If a Member has made such an
election with respect to his or her Matching Contributions Account,
he or she may terminate such election with respect to future
contributions to such Account at any time. If such a termination
election is made, future contributions to the Member's Matching
Contributions Account shall be invested in accordance with the
Member's investment election with respect to his or her Elective
Contributions Account, as described in subsection 5.3(a) hereof. If
a Member has made an election to invest 100% of his Matching
Contributions Account in the Selective Insurance Stock Fund as
described in this subsection 5.3(f), such Member may also elect, at
any time, to transfer the Fair Market Value of such Account from
the Selective Insurance Stock Fund to the other available
Investment Funds by dollar amount, by number of shares, or by whole
percentages. A termination election or a transfer election
described under this subsection 5.3(c) shall be made via telephonic
request, provided the Member had previously authorized such
telephonic transactions on a form supplied by the Committee (or its
designated agent). Such a termination election or a transfer
election shall be effective as soon as administratively practicable
after the Member has made such request."
Sixth: Effective September 1, 1996, section 7.5(a) of Article VII of the
Savings Plan is hereby amended by adding the following to the end thereof:
"Notwithstanding the above, if any portion of the Member's Accounts is
invested in the Selective Insurance Stock Fund, the Member or the
Member's designated Beneficiary may elect to receive a distribution in
kind of the whole shares of Selective Insurance Group, Inc. common stock
held in such Accounts plus cash equal to the Fair Market Value of any
fractional shares of Selective Insurance Group, Inc. common stock to
which such Member or Member's designated Beneficiary would otherwise be
entitled."
Seventh: The following shall be attached to the end of the Savings Plan as
Appendix A:
"Appendix A
-----------
Effective July 1, 1996, the Investment Funds offered under the Selective
Insurance Company of America Retirement Savings Plan shall be:
The T. Rowe Price Prime Reserve Fund
The T. Rowe Price Stable Value Fund
The T. Rowe Price New Income Fund
The T. Rowe Price Equity Income Fund
The T. Rowe Price International Stock Fund
The T. Rowe Price Small-Cap Value Fund
The T. Rowe Price New America Growth Fund
The T. Rowe Price Science & Technology Fund
Effective September 1, 1996, the following additional Investment Fund shall
be offered:
The Selective Insurance Stock Fund"
Except to the extent hereinabove set forth, the Plan shall remain in full
force and effect without change or modification.
It is also resolved, that the officers and other appropriate personnel of the
Company are hereby authorized and directed to take such further steps and
actions as are deemed necessary and appropriate to implement the actions and
purposes of the foregoing recitals and amendments.
Certificate
-----------
Selective Insurance Company of America (the "Company") hereby adopts the
changes to the Selective Insurance Company of America Retirement Savings Plan
(the "Savings Plan") and the resolution relating to the Savings Plan which
are in the attached copy of an amendment to the Savings Plan which is
identified as being the "Third Amendment to the Selective Insurance Company
of America Retirement Savings Plan."
Selective Insurance Company of America
- --------------------------------------
by: /s/ James W. Entringer
------------------
James W. Entringer
August 15, 1996
Selective Insurance Group, Inc.
40 Wantage Avenue
Branchville, New Jersey 07890
Ladies and Gentlemen:
We have acted as special counsel to Selective Insurance Group, Inc., a
New Jersey corporation (the "Company"), in connection with the preparation
and filing under the Securities Act of 1933, as amended (the "Act"), of a
Registration Statement on Form S-8 (the "Registration Statement") relating to
the offer and sale of up to 500,000 shares of the Company's common stock, par
value $2.00 per share (the "Shares") pursuant to the Selective Insurance
Retirement Savings Plan.
For purposes of this opinion, we have examined originals or copies,
certified or otherwise, identified to our satisfaction, of the Registration
Statement, together with exhibits filed as a part thereof, and all such other
documents, records, certificates, including certificates of public officials,
and other instruments as we have deemed necessary or appropriate.
Based upon the foregoing, we are of the opinion that:
i. The Company has been duly incorporated and is validly
existing under the laws of the State of New Jersey.
ii. The Shares have been duly authorized and, when sold in
the manner and for the consideration contemplated by the
Registration Statement, will be validly issued, fully
paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name therein. By giving the
foregoing consent, we do not admit that we are persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ SHANLEY & FISHER, P.C.
--------------------------
SHANLEY & FISHER, P.C.
Consent of Independent Auditors
-------------------------------
The Board of Directors and Stockholders
Selective Insurance Group, Inc.
We consent to the incorporation by reference herein of our reports dated
January 23, 1996, relating to the consolidated balance sheets of Selective
Insurance Group, Inc. and subsidiaries as of December 31, 1995 and 1994, and
the related consolidated statements of income, stockholders' equity and cash
flows and related schedules for each of the years in the three-year period
ended December 31, 1995, which reports appear in the December 31, 1995 Annual
Report on Form 10-K of Selective Insurance Group, Inc.
As discussed in notes 1 and 3 to the consolidated financial statements, the
Company adopted the provisions of the Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" in 1994.
/s/ KPMG
- --------
KPMG
August 15, 1996
Short Hills, New Jersey
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ A. David Brown
--------------
A. David Brown
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ William A. Dolan, II
--------------------
William A. Dolan, II
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ William C. Gray
---------------
William C. Gray
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ C. Edward Herder
----------------
C. Edward Herder
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ Frederick H. Jarvis
-------------------
Frederick H. Jarvis
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ William M. Kearns, Jr.
----------------------
William M. Kearns, Jr.
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ Joan Lamm-Tennant
-----------------
Joan Lamm-Tennant
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ Russell R. Moffett
------------------
Russell R. Moffett
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ William M. Rue
--------------
William M. Rue
- -----------------------------------------------------------------------------
-----------------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ J. Brian Thebault
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J. Brian Thebault
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POWER OF ATTORNEY
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KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company and the Salary and Benefits Committee of the Board
of Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ Thomas D. Sayles, Jr.
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Thomas D. Sayles, Jr.
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POWER OF ATTORNEY
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KNOW ALL MEN BY THESE PRESENTS that the undersigned constitutes and
appoints James W. Entringer his true and lawful attorney and agent to do any
and all acts and things and to execute any and all instruments which said
attorney and agent may deem necessary or desirable to enable Selective
Insurance Group, Inc. (the "Company") to comply with the Securities Act of
1933, as amended (the "Act"), and any rules, regulations and requirements of
the Securities and Exchange Commission (the "Commission") thereunder in
connection with the registration under the Act of plan interests and shares
of common stock of the Company, to be offered and sold pursuant to the
Selective Insurance Retirement Savings Plan, including, without limiting the
generality of the foregoing, power and authority to sign the name of the
undersigned in the undersigned's capacity as a member of the Board of
Directors of the Company and the Salary and Benefits Committee of the Board
of Directors of the Company to a Registration Statement on Form S-8 or other
appropriate form covering the said plan interests and shares of common stock
(the "Registration Statement"), and any amendments thereto, to be filed with
the Commission, and to any and all instruments or documents filed as part of
or in connection with the Registration Statement or any amendments thereto;
and the undersigned hereby ratifies and confirms all that said attorney and
agent shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this power of attorney
this 15th day of August, 1996.
/s/ S. Griffin McClellan III
------------------------
S. Griffin McClellan III
