<PAGE> 1
As filed with the Securities and Exchange Commission on August 3, 1994
REGISTRATION NO.
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SARA LEE CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
MARYLAND 36-2089049
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
THREE FIRST NATIONAL PLAZA
SUITE 4600
CHICAGO, ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
60602-4260
(ZIP CODE)
------------------------
SARA LEE CORPORATION 401(K) SUPPLEMENTAL SAVINGS PLAN
PLAYTEX APPAREL, INC. SAVINGS AND PROFIT SHARING PLAN
PLAYTEX APPAREL, INC. EMPLOYEES' 401(K) RETIREMENT PLAN
PLAYTEX APPAREL RETIREMENT SAVINGS PLAN FOR
HOURLY PUERTO RICAN EMPLOYEES
SPRING CITY KNITTING CO., INC. RETIREMENT SAVINGS PLAN
(FULL TITLE OF THE PLANS)
------------------------
GORDON H. NEWMAN
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
SARA LEE CORPORATION, THREE FIRST NATIONAL PLAZA, SUITE 4600,
CHICAGO, ILLINOIS 60602-4260
(NAME AND ADDRESS OF AGENT FOR SERVICE)
TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE:
312/726-2600
------------------------
THIS POST-EFFECTIVE AMENDMENT NO. 2 ADDS THE SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN TO THIS REGISTRATION STATEMENT, BUT DOES NOT INCREASE
THE NUMBER OF SHARES OF COMMON STOCK REGISTERED HEREUNDER. THIS REGISTRATION
STATEMENT NOW COVERS AN INDETERMINATE NUMBER OF INTERESTS TO BE OFFERED AND SOLD
PURSUANT TO THE EMPLOYEE BENEFIT PLANS DESCRIBED HEREIN.
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<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of the Corporation and the Plans filed or to be
filed with the Commission are incorporated herein by reference as of their
respective dates:
(a) Annual Report on Form 10-K of the Corporation for the fiscal year
ended July 3, 1993, and Annual Reports on Form 11-K for the fiscal year
ended June 30, 1993, of the Sara Lee Corporation 401(k) Supplemental
Savings Plan, Playtex Apparel, Inc. Savings and Profit Sharing Plan,
Playtex Apparel, Inc. Employees' 401(k) Retirement Plan, and Playtex
Apparel Retirement Savings Plan for Hourly Puerto Rican Employees,
respectively.
(b) All other reports filed by the Corporation pursuant to Sections
13(a) or 15(d) of the Exchange Act since July 3, 1993.
(c) Registration Statement No. 33-18488 filed with the Commission on
November 12, 1987, Registration Statement No. 34-397183 on Form 8-A filed
with the Commission on May 11, 1988 (as amended by Form 8 thereto, filed
with the Commission on November 15, 1989), as to Description of the Common
Stock of the Corporation.
All documents subsequently filed by the Corporation pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 prior to the
filing of a post-effective amendment to the Registration Statement relating to
the Common Stock offered hereby which indicates that all such Common Stock has
been sold, or which deregisters all such Common Stock then remaining unsold,
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the Common Stock offered hereby has been
passed upon for the Corporation by Gordon H. Newman, Esq., Senior Vice
President, Secretary and General Counsel of the Corporation. As of June 30,
1994, Mr. Newman owned 371,611 shares of Common Stock and had the right to
acquire 120,941 shares of Common Stock through the exercise of options pursuant
to stock option plans of the Corporation.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 2-418 of the Maryland General Corporation Law provides for
indemnification of the Corporation's directors, officers, employees and agents
under specified circumstances, which may include indemnity against expenses,
including attorney's fees and judgments, fines, and amounts paid in settlement
under the Securities Act. The Corporation has purchased and maintains insurance
as is permitted in said Section 2-418 on behalf of directors and officers, which
insurance may cover liabilities under the Securities Act. Article V of the
By-Laws of the Corporation provides for such indemnification to the extent and
under the circumstances permitted by said Section 2-418.
Article V of the By-Laws of the Corporation provides as follows:
"SECTION 1. Right to Indemnification. Subject to the provisions of Section
3 of this Article V, the Corporation (a) shall indemnify its directors and
officers, whether serving the Corporation or at its request any other entity, to
the full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses under the
procedures and to the full extent permitted by law and (b) may indemnify other
employees and agents to such extent, if any, as shall be authorized by the Board
of Directors and be permitted by law.
"SECTION 2. Time for Payment Enforcement. Any indemnification, or payment
of expenses in advance of the final disposition of any proceeding, shall be made
promptly, and in any event within sixty (60) days, upon the written request of
the director or officer entitled to seek indemnification (the "Indemnified
Party").
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<PAGE> 3
The right to indemnification and advances hereunder shall be enforceable by the
Indemnified Party in any court of competent jurisdiction, if (i) the Corporation
denies such request, in whole or in part, or (ii) no disposition thereof is made
within 60 days. The Indemnified Party's costs and expenses incurred in
connection with successfully establishing his or her right to indemnification,
in whole or in part, in any such action shall also be indemnified by the
Corporation.
"SECTION 3. Standard of Conduct. Anything in these By-Laws to the contrary
notwithstanding, except in circumstances where indemnification is required under
the General Laws of the State of Maryland now or hereafter in force, no
indemnification of a director or officer may be made hereunder unless a
determination has been made in accordance with the procedures set forth in
Section 2-418(e) of the Maryland General Corporation Law that the party seeking
indemnification has met the requisite standard of conduct. A party seeking
indemnification shall be deemed to have met the requisite standard of conduct
unless it is proved that:
"(a) The act or omission of the director or officer was material to the
cause of action giving rise to the proceeding; and
(i) was committed in bad faith; or
(ii) was the result of active and deliberate dishonesty; or
"(b) The director or officer actually received an improper benefit in
money, property or services; or
"(c) In the case of a criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful.
"SECTION 4. General. The indemnification and advance of expenses provided
by this By-Law shall not be deemed exclusive of any other rights to which a
person seeking indemnification or advance of expenses may be entitled under any
law (common or statutory), or any agreement, vote of stockholders or
disinterested directors or other provision that is not contrary to law, both as
to action in his official capacity and as to action in another capacity while
holding office or while employed by or acting as agent for the Corporation,
shall continue in respect of all events occurring while a person was a director
or officer after such person has ceased to be a director or officer, and shall
inure to the benefit of the estate, heirs, executors and administrators of such
person. All rights to indemnification and advance of expenses hereunder shall be
deemed to be a contract between the Corporation and each director or officer of
the Corporation who serves or served in such capacity at any time while this
By-Law is in effect.
"SECTION 5. Effective Time. This By-Law shall be effective from and after
the date of its adoption [August 26, 1988] and shall apply to all proceedings
arising prior to or after such date, regardless of whether relating to facts or
circumstances occurring prior to or after such date. Nothing herein shall
prevent an amendment of this By-Law, provided that no such amendment shall
diminish the rights of any person hereunder with respect to events occurring or
claims made before the adoption of such amendment or as to claims made after
such adoption in respect of events occurring before such adoption.
"SECTION 6. Further Action. The Board of Directors may take such action as
is necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law."
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<PAGE> 4
ITEM 8. EXHIBITS.
The following are filed as exhibits to this Registration Statement:
<TABLE>
<S> <C>
4.1 Articles of Restatement of the Charter of the registrant, dated April 5,
1990, defining the rights of holders of the registrant's securities,
incorporated by reference to Exhibit 4.1 of the Registration Statement No.
33-35760 on Form S-8 filed with the Commission on July 6, 1990.
4.2 Articles Supplementary to the Charter of the registrant, dated May 18,
1990, defining the rights of holders of the registrant's securities,
incorporated by reference to Exhibit 4.2 of the Registration Statement No.
33-37575 on Form S-8 filed with the Commission on November 1, 1990.
4.3 Articles Supplementary to the Charter of the registrant, dated October 30,
1992, defining the rights of holders of the registrant's securities,
incorporated by reference to Exhibit 4.3 of the Registration Statement No.
33-59002 filed with the Commission on March 4, 1993.
4.4 Amended By-Laws of the registrant, dated June 24, 1993, defining the rights
of holders of the registrant's securities, incorporated by reference to
Exhibit 3(b) of the registrant's Annual Report on Form 10-K for the fiscal
year ended July 3, 1993.
4.5 Rights Agreement dated as of April 28, 1988 between the Corporation and the
First National Bank of Chicago as Rights Agent, (incorporated by reference
to the Registration Statement No. 34-397183 on Form 8-A filed with the
Commission on May 11, 1988 (as amended by Form 8 thereto, filed with the
Commission on November 15, 1989)).
4.6 Sara Lee Corporation 401(k) Supplemental Savings Plan (as amended and
restated effective June 30, 1990), incorporated by reference to Exhibit 4.4
of the Registration Statement No. 33-35760 filed with the Commission on
July 6, 1990.
4.7 Sara Lee Corporation 401(k) Supplemental Savings Plan Trust (as amended),
incorporated by reference to Exhibit 4.5 of the Registration Statement No.
33-35760 filed with the Commission on July 6, 1990.
4.8+ Playtex Apparel, Inc. Savings and Profit Sharing Plan (as amended and
restated effective January 1, 1993).
4.9 Playtex Apparel, Inc. Employees' 401(k) Retirement Plan (as amended and
restated effective January 1, 1993).
4.10 Playtex Apparel Retirement Savings Plan for Hourly Puerto Rican Employees.
4.11 Spring City Knitting Co., Inc. Retirement Savings Plan (effective February
1, 1987), as amended.
5+ Opinion of Gordon H. Newman, Esq., Senior Vice President, Secretary and
General Counsel.
24.1+ Consent of Arthur Andersen & Co.
24.2+ Consent of Gordon H. Newman, Esq.--contained in the opinion appearing as
Exhibit 5.
25+ Power of Attorney.
</TABLE>
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+Previously filed
The undersigned hereby undertakes to submit the Plans and any amendments
thereto to the Internal Revenue Service, for the purpose of receiving a
determination letter as to the qualification of the Plans under Section 401 of
the Internal Revenue Code, in a timely manner, and to make all changes required
by the Internal Revenue Service in order to qualify the Plans.
II-3
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ITEM 9. UNDERTAKINGS.
(A) RULE 415 OFFERING
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 to include
any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change
to such information in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(H) FILING OF REGISTRATION STATEMENT ON FORM S-8
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 provisions described in Item 6, 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.
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SIGNATURES
The Registrant. 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
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Chicago, Illinois on
the 3rd day of August, 1994.
SARA LEE CORPORATION
By: /s/ GORDON H. NEWMAN
--------------------------------
Gordon H. Newman
Senior Vice President, Secretary
and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 2 to the Registration Statement has been signed
below by the following persons in the capacities indicated on the
day of August, 1994:
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
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<S> <C>
* Chairman, Chief Executive Officer
- --------------------------------------------- and Director
John H. Bryan
/s/ DONALD J. FRANCESCHINI Executive Vice President and Director
- ---------------------------------------------
Donald J. Franceschini
/s/ C. STEVEN MCMILLAN Executive Vice President and Director
- ---------------------------------------------
C. Steven McMillan
/s/ MICHAEL E. MURPHY Vice Chairman, Chief
- --------------------------------------------- Financial and Administrative
Michael E. Murphy Officer and Director
/s/ WAYNE R. SZYPULSKI Vice President and Controller
- ---------------------------------------------
Wayne R. Szypulski
* Director
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Paul A. Allaire
Director
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Duane L. Burnham
* Director
- ---------------------------------------------
Charles W. Coker
* Director
- ---------------------------------------------
Willie D. Davis
* Director
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Allen F. Jacobson
Director
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F.H.J.J. Andriessen
</TABLE>
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<TABLE>
<CAPTION>
SIGNATURE CAPACITY
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<S> <C>
* Director
- ---------------------------------------------
Vernon E. Jordan, Jr.
* Director
- ---------------------------------------------
James L. Ketelsen
* Director
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Baron Gaultherus Kraijenhoff
* Director
- ---------------------------------------------
Joan D. Manley
* Director
- ---------------------------------------------
Newton N. Minow
Director
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Sir Arvi H. Parbo
Director
- ---------------------------------------------
Rozanne L. Ridgway
* Director
- ---------------------------------------------
Richard L. Thomas
</TABLE>
The Plans. Pursuant to the requirements of the Securities Act of 1933, as
amended, the Sara Lee Corporation 401(k) Supplemental Savings Plan has duly
caused this Post-Effective Amendment No. 2 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in Chicago,
Illinois, on the 3rd day of August, 1994.
SARA LEE CORPORATION 401(k)
SUPPLEMENTAL SAVINGS PLAN
By:SARA LEE CORPORATION 401(k)
SUPPLEMENTAL SAVINGS PLAN
COMMITTEE
By: /s/ GORDON H. NEWMAN
--------------------------------
Gordon H. Newman,
As a Committee Member
on Behalf of the Committee
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<PAGE> 8
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Playtex Apparel, Inc. Savings and Profit Sharing Plan has duly caused this
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Chicago, Illinois, on
the 3rd day of August, 1994.
PLAYTEX APPAREL, INC. SAVINGS AND
PROFIT SHARING PLAN
By: PLAYTEX APPAREL, INC. SAVINGS AND
PROFIT SHARING PLAN COMMITTEE
By: /s/ GORDON H. NEWMAN
-----------------------------------
Gordon H. Newman,
As a Committee Member
on Behalf of the Committee
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Playtex Apparel, Inc. Employees' 401(k) Retirement Plan has duly caused this
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Chicago, Illinois, on
the 3rd day of August, 1994.
PLAYTEX APPAREL, INC. EMPLOYEES'
401(k) RETIREMENT PLAN
By: PLAYTEX APPAREL, INC. EMPLOYEES'
401(k) RETIREMENT PLAN COMMITTEE
By: /s/ GORDON H. NEWMAN
----------------------------------
Gordon H. Newman,
As a Committee Member
on Behalf of the Committee
II-7
<PAGE> 9
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Playtex Apparel Retirement Savings Plan for Hourly Puerto Rican Employees has
duly caused this Post-Effective Amendment No. 2 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Chicago, Illinois, on the 3rd day of August, 1994.
PLAYTEX APPAREL RETIREMENT SAVINGS
PLAN FOR HOURLY PUERTO RICAN
EMPLOYEES
By: PLAYTEX APPAREL RETIREMENT SAVINGS
PLAN FOR HOURLY PUERTO RICAN
EMPLOYEES COMMITTEE
By: /s/ GORDON H. NEWMAN
---------------------------------
Gordon H. Newman,
As a Committee Member
on Behalf of the Committee
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Spring City Knitting Co., Inc. Retirement Savings Plan has duly caused this
Post-Effective Amendment No. 2 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto authorized, in Chicago, Illinois, on the
3rd day of August, 1994.
SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
By: SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
COMMITTEE
By: /s/ GORDON H. NEWMAN
---------------------------------
Gordon H. Newman,
As a Committee Member
on Behalf of the Committee
*By Gordon H. Newman as Attorney-in-Fact pursuant to Powers of Attorney
executed by the officers and directors listed above, which Powers of Attorney
have been filed with the Securities and Exchange Commission.
By: /s/ GORDON H. NEWMAN
---------------------------------
Gordon H. Newman
As Attorney-in-Fact
II-8
<PAGE> 10
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE
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<S> <C> <C>
4.1 Articles of Restatement of the Charter of the registrant, dated
April 9, 1990, defining the rights of holders of the registrant's
securities, incorporated by reference to Exhibit 4.1 of the
Registration Statement No. 33-35760 on Form S-8 filed with the
Commission on July 6, 1990.
4.2 Articles Supplementary to the Charter of the registrant, dated May
18, 1990, defining the rights of holders of the registrant's
securities, incorporated by reference to Exhibit 4.2 of the
Registration Statement No. 33-37575 on Form S-8 filed with the
Commission on November 1, 1990.
4.3 Articles Supplementary to the Charter of the registrant, dated
October 30, 1992, defining the rights of holders of the
registrant's securities, incorporated by reference to Exhibit 4.3
of the Registration Statement No. 33-59002 filed with the
Commission on March 4, 1993.
4.4 Amended By-Laws of the registrant, dated June 24, 1993, defining
the rights of holders of the registrant's securities, incorporated
by reference to Exhibit 3(b) of the registrant's Annual Report on
Form 10-K for the fiscal year ended July 3, 1993.
4.5 Rights Agreement dated as of April 28, 1988 between the
Corporation and the First National Bank of Chicago as Rights
Agent, (incorporated by reference to the Registration Statement
No. 34-397183 on Form 8-A filed with the Commission on May 11,
1988 (as amended by Form 8 thereto, filed with the Commission on
November 15, 1989)).
4.6 Sara Lee Corporation 401(k) Supplemental Savings Plan (as amended
and restated effective June 30, 1990), incorporated by reference
to Exhibit 4.4 of the Registration Statement No. 33-35760 filed
with the Commission on July 6, 1990.
4.7 Sara Lee Corporation 401(k) Supplemental Savings Plan Trust (as
amended), incorporated by reference to Exhibit 4.5 of the
Registration Statement No. 33-35760 filed with the Commission on
July 6, 1990.
4.8+ Playtex Apparel, Inc. Savings and Profit Sharing Plan (as amended
and restated effective January 1, 1993).
4.9 Playtex Apparel, Inc. Employees' 401(k) Retirement Plan (as
amended and restated effective January 1, 1993).
4.10 Playtex Apparel Retirement Savings Plan for Hourly Puerto Rican
Employees.
4.11 Spring City Knitting Co., Inc. Retirement Savings Plan (effective
February 1, 1987), as amended.
5+ Opinion of Gordon H. Newman, Esq., Senior Vice President,
Secretary and General Counsel.
24.1+ Consent of Arthur Andersen & Co.
24.2+ Consent of Gordon H. Newman, Esq.--contained in the opinion
appearing as Exhibit 5.
25+ Powers of Attorney.
</TABLE>
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+Previously filed.
<PAGE> 1
Exhibit 4.9
PLAYTEX APPAREL, INC. EMPLOYEES' 401(K) RETIREMENT PLAN
(As Amended and Restated Effective as of January 1, 1993)
McDermott, Will & Emery
Chicago
<PAGE> 2
C E R T I F I C A T E
I, Gordon Newman, Vice President of Playtex Apparel,
Inc., hereby certify that the attached document is a correct copy of the
Playtex Apparel, Inc. Employees' 401(k) Retirement Plan, as amended and
restated effective as of January 1, 1993.
Dated this 28th day of March , 1994.
/s/ GORDON H. NEWMAN
________________ as Aforesaid
(Corporate Seal)
<PAGE> 3
TABLE OF CONTENTS
PAGE
----
SECTION 1 1
Introduction 1
Purpose 1
Effective Date 1
Plan Year, Plan Quarter 1
Employers 2
Administration of the Plan 2
Funding of Benefits 3
Plan Supplements 4
SECTION 2 5
Eligibility 5
Participation 5
Notice of Participation 5
Leave of Absence 6
Maternity and Paternity Absence 6
Controlled Group Member 7
Covered Group 7
Leased Employees 8
SECTION 3 9
Employer Contributions 9
Pretax Contribution 9
Matching Contribution 9
Compensation 10
Individual Employer Contribution 11
Limitations on Employer Contributions 11
Payment of Employer Contributions 11
Verification of Employer Contributions 12
No Interest in Employers 12
Limitation on Pretax Contributions 13
Limitation on Matching Contributions 15
Multiple Use of Alternative Limitation 16
Highly Compensated Employee 18
Dollar Limitation on Pretax Contributions 19
Special Family Aggregation Rules 20
Rules Governing Pretax Contributions 21
SECTION 4 23
Period of Participation 23
Settlement Date 23
Restricted Participation 24
SECTION 5 26
Accounting; Contribution and Benefit Limitations 26
Separate Accounts 26
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<PAGE> 4
Valuation Dates 27
Employer Contributions Considered Made on Last
Day of Plan Year 27
Adjustment of Participants' Accounts 27
Allocation of Pretax Contributions 29
Allocation of Matching Contributions 29
Charging Distributions 30
Rollovers 30
Statement of Account 31
Contribution Limitations 31
Combined Benefit Limitations 32
SECTION 6 34
Payment of Account Balances 34
Retirement or Death 34
Resignation or Dismissal 34
Forfeitures 36
Manner of Distribution 36
Commencement of Distributions 38
Designation of Beneficiary 40
Missing Participants or Beneficiaries 41
Facility of Payment 42
Hardship Withdrawals of Pretax Contributions 42
Direct Transfer of Eligible Rollover
Distributions 45
Distribution to Alternate Payees 45
SECTION 7 47
The Trust Fund and Investment of Trust Assets 47
The Trust Fund 47
The Investment Funds 47
Investment Elections 48
Change in Investment Elections 49
Elections to Reallocate Balances Between Accounts 49
Elections After Retirement or Other Termination of
Employment 50
Voting of Sara Lee Stock; Tender Offers 50
Form of Elections 51
SECTION 8 53
Reemployment 53
Resumption of Participation 53
Reinstatement of Forfeiture 54
SECTION 9 56
Administration 56
Committee's General Powers, Rights and Duties 56
Secretary of the Committee 57
Manner of Action 57
Interested Committee Member 58
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<PAGE> 5
Resignation or Removal of Committee Members 58
Committee Expenses 58
Information Required by Company or Committee 59
Uniform Rules 59
Claims Procedure 59
Decisions Final 61
Indemnification 61
SECTION 10 63
General Provisions 63
Additional Employers 63
Action by Employers 63
Waiver of Notice 63
Gender and Number 63
Controlling Law 63
Employment Rights 64
Litigation by Participants 64
Interests Not Transferable 64
Absence of Guaranty 65
Evidence 65
SECTION 11 66
Amendment and Termination 66
Amendment 66
Termination 66
Vesting and Distribution on Termination 67
Notice of Amendment or Termination 67
Plan Merger, Consolidation, etc. 67
Discontinuance of Contributions 67
SUPPLEMENT A
Exhibit A
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<PAGE> 6
PLAYTEX APPAREL, INC. EMPLOYEES' 401(k) RETIREMENT PLAN
(As Amended and Restated Effective as of January 1, 1993)
SECTION 1
Introduction
1.1. Purpose. The Playtex Apparel, Inc. Employees' 401(k)
Retirement Plan (the "plan") is maintained by Playtex Apparel, Inc. (the
"company") to enable eligible employees to provide for their future security by
accumulating funds and sharing in the contributions of their employer.
1.2. Effective Date. The plan originally was established
prior to January 1, 1976. The plan was last amended and restated effective
January 1, 1989, and was named The Playtex Apparel Hourly Employees' Retirement
Plan - 401(k). This amendment and restatement of the plan is effective as of
January 1, 1993. Prior to January 1, 1993, the company maintained the JBI,
Inc. Employees' Retirement Plan (the "JBI Plan"). The amendment and
restatement of the plan as set forth herein is intended to reflect the merger,
consolidation and continuation of the JBI Plan into the plan, effective as of
January 1, 1993.
1.3. Plan Year, Plan Quarter. Effective July 1, 1993, a
"plan year" is the twelve month period beginning each July 1 and ending on the
next following June 30. Prior to December 31, 1992, the plan year was the
calendar year. The
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<PAGE> 7
period from January 1, 1993 to June 30, 1993, shall constitute a short plan
year. If any plan year constitutes a short plan year, any dollar limitation
contained in the plan which is defined by reference to Sections 401(a)(17) or
415 of the Internal Revenue Code (the "Code") shall be multiplied by a
fraction, the numerator of which is the number of months in the short plan year
and the denominator of which is 12. A "plan quarter" is the period beginning
immediately after a valuation date (as defined in subsection 5.2) and ending on
the next following valuation date.
1.4. Employers. Any subsidiary or affiliate of the company
may adopt the plan with the company's consent, as described in subsection 10.1.
A "subsidiary" of the company is any corporation more than 50 percent of the
voting stock of which is owned, directly or indirectly, by the company. An
"affiliate" of the company is any corporation more than 50 percent of the
voting stock of which is owned, directly or indirectly, by the owner or owners
of more than 50 percent of the voting stock of the company. The company and
any subsidiaries or affiliates of the company which adopt the plan are referred
to below collectively as the "employers" and sometimes individually as an
"employer."
1.5. Administration of the Plan. The plan is administered by
the company. The company has the discretionary authority to determine all
questions arising under the plan,
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<PAGE> 8
including the power to determine the rights or eligibility of employees or
participants and any other persons, and the amounts of their benefits under the
plan, and to remedy ambiguities, inconsistencies or omissions. The company may
from time to time adopt such rules and regulations as may be necessary or
desirable for the proper and efficient administration of the plan and as are
consistent with the terms of the plan. The company also, from time to time,
may appoint such individuals to act as the company's representatives as the
company considers necessary or desirable for the efficient administration of
the plan. Any notice or document required to be given to or filed with the
company will be properly given or filed if delivered or mailed, by registered
mail, postage prepaid, to the company, in care of Sara Lee Corporation, at
Three First National Plaza, Chicago, Illinois 60602.
1.6. Funding of Benefits. Funds contributed under the plan
are held and invested, until distribution, by one or more trustees (the
"trustees") appointed by the company, in accordance with the terms of a trust
agreement between the company and the trustees which implements and forms a
part of the plan. The trustees shall be named fiduciaries for control,
management and investment of the assets of the trust fund. Participants will
be notified of the identity of the trustees, and of any change in trustees.
Copies of the plan and trust agreement, and any amendments thereto, will be on
file at the
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<PAGE> 9
office of the Secretary of the company and of each other employer which adopts
the plan where they may be examined by any participant or other person entitled
to benefits under the plan. The provisions of and benefits under the plan are
subject to the terms and provisions of the trust agreement.
1.7. Plan Supplements. The provisions of the plan may be
modified by supplements to the plan. The terms and provisions of each
supplement are a part of the plan and supersede the provisions of the plan to
the extent necessary to eliminate inconsistencies between the plan and the
supplement.
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SECTION 2
Eligibility
2.1. Participation. Subject to the conditions and
limitations of the plan, each employee of an employer who is a participant in
the plan immediately preceding January 1, 1993 will continue as a participant
on and after that date. Beginning January 1, 1993, each other employee of an
employer will become a participant in the plan on the first July 1 or January 1
on which the employee meets all of the following requirements:
(a) The employee has attained age 21 years; and
(b) The employee is a member of a covered group
(as defined in subsection 2.6).
If an employee who fails to meet the requirements of subparagraph 2.1(b) has
satisfied the requirements of subparagraph 2.1(a), the employee will become a
participant in the plan on the date the employee subsequently meets the
requirements of subparagraph 2.1(b). Effective January 1, 1994, each other
employee of an employer will become a participant in the plan on the first
January 1, April 1, July 1 or October 1 on which the employee meets the
requirements contained in subparagraphs 2.1(a) and (b).
2.2. Notice of Participation. The company will notify each
employee of the date on which the employee becomes a participant in the plan
and will furnish each participant and
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<PAGE> 11
each beneficiary receiving benefits under the plan with a copy of a summary
plan description.
2.3. Leave of Absence. A leave of absence will not interrupt
continuity of service or participation in the plan. A "leave of absence" for
plan purposes means an absence from work which is not treated by the employers
as a termination of employment or which is required by law to be treated as a
leave of absence. Leaves of absence will be granted under employer rules
applied uniformly to all employees similarly situated.
2.4. Maternity and Paternity Absence. In the case of a
maternity or paternity absence (as defined below), an employee shall be
credited, for the first plan year in which the employee otherwise would have
incurred a one-year break in service (and solely for purposes of determining
whether such a break in service has occurred), with the hours of service which
normally would have been credited to the employee but for such absence (or, if
the company is unable to determine the hours which would have been so credited,
8 hours for each work day of such absence), but in no event more than 501 hours
for any one absence. A "maternity or paternity absence" means an employee's
absence from work because of the pregnancy of the employee or birth of a child
of the employee, the placement of a child with the employee in connection with
the adoption of such child by the employee, or for purposes of caring for the
child immediately following such birth or placement. An "hour of ser-
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<PAGE> 12
vice" means an hour for which an employee is directly or indirectly paid or
entitled to payment by an employer or controlled group member for the
performance of duties and for reasons other than the performance of duties (but
no more than 501 hours for any single continuous period during which no duties
are performed), including each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by an employer or
controlled group member, determined and credited in accordance with Department
of Labor Reg. Sec. 2530.200b-2. The company may require the employee to
furnish such information as the company considers necessary to establish that
the employee's absence was for one of the reasons specified above.
2.5. Controlled Group Member. A "controlled group member"
means:
(a) any corporation which is not an employer but is a
member of a controlled group of corporations (within
the meaning of Section 1563(a) of the Code,
determined without regard to Sections 1563(a)(4) and
1563(e)(3)(C) thereof) which contains an employer; or
(b) any trade or business (whether or not incorporated)
which is under common control with an employer
(within the meaning of Section 414(c) of the Code).
2.6. Covered Group. A "covered group" means a group or class
of employees to which the plan has been extended by their employer. A listing
of the covered groups under the plan
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<PAGE> 13
is attached as Exhibit A hereto. Designation of a covered group when made by
an employer shall be effected by action of such employer's board of directors.
2.7. Leased Employees. A leased employee (as defined below)
shall not be eligible to participate in the plan. A "leased employee" means
any person who is not an employee of an employer, but who has provided services
to an employer of a type which have historically (within the business field of
the employers) been provided by employees, on a substantially full-time basis
for a period of at least one year, pursuant to an agreement between an employer
and a leasing organization. If a leased employee is hired as a common law
employee of an employer, the period during which a leased employee performs
services for an employer shall be taken into account for purposes of
subsections 2.1 and 6.2 of the plan unless: (i) such leased employee is a
participant in a money purchase pension plan maintained by the leasing
organization which provides a non-integrated employer contribution rate of at
least 10 percent of compensation, immediate participation for all employees and
full and immediate vesting, and (ii) leased employees do not constitute more
than 20 percent of the employers' nonhighly compensated workforce.
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SECTION 3
Employer Contributions
3.1. Pretax Contribution. Subject to the other provisions of
this Section 3 and to the limitations stated herein, a participant may elect to
have his compensation reduced, and to have the employer contribute an amount
equal to the reduction to the plan on behalf of the participant (a "pretax
contribution"). The pretax contribution shall be a whole percentage of the
participant's compensation ranging from a minimum of 2% to a maximum of 15% of
compensation. Pre-tax contributions shall be made from such items of
compensations and pursuant to such other limits as may be established by the
company. A pretax contribution is an employer contribution for all purposes
hereunder.
3.2. Matching Contribution. For each plan year, the company
may make a "matching contribution" to the trustee in an amount of up to 50% of
the first 8% of pretax contributions made during such plan year by those
participants employed by it and entitled to share in the matching contribution
for that year; provided, that in the case of participants employed by the
company in its JBI Division (the "JBI Division"), the company may make a
matching contribution to the trustee in an amount of up to 20% of the first 6%
of pretax contributions made during such plan quarter by those participants
employed by it in its JBI Division and entitled to share in the matching
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<PAGE> 15
contribution for the plan quarter. Such matching contribution, if any, shall
be allocated among eligible participants as provided in subsection 5.6. The
company's total matching contribution for a plan year shall not exceed 4% of
its participants' compensation; provided, that in the case of the participants
employed in the JBI Division its total matching contribution for a plan year
shall not exceed 1.2% of such participants' compensation. An employer may
determine that a smaller matching contribution will be made.
3.3. Compensation. A participant's "compensation" means the
total wages (as defined in Section 3401(a) of the Code) paid to the participant
for the period in question for services rendered as an employee of a controlled
group member, which are subject to income tax withholding at the source,
determined without regard to any exceptions to the withholding rules that limit
the remuneration included in such wages and that are based on the nature or
location of the employment or the services performed. Except for purposes of
applying the limitations on annual additions set forth in subsection 5.10 of
the plan, or for applying the special rules for top-heavy plans described in
Supplement A, a participant's compensation under the plan also shall include
all elective contributions made on behalf of the employee pursuant to the
employee's salary reduction agreement under Sections 401(k) and 125 of the
Code. The term 'compensation' shall not include compensation in excess of
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<PAGE> 16
$200,000 for any plan year (as adjusted from time to time pursuant to Section
401(a)(17) of the Code). For purposes of applying this limitation on
compensation, the rules of Section 414(q)(6) of the Code shall apply except
that in applying such rules, the term 'family' shall include only the spouse of
the participant and any lineal descendants of the participant who have not yet
attained age 19 before the close of the plan year.
3.4. Individual Employer Contribution. For each plan year,
each employer will contribute to the trustee:
(a) an amount equal to the pretax contributions made
under subsection 3.1 for such plan year by
participants employed by it, and
(b) an amount equal to the matching contributions for the
relevant allocation period (as defined in subsection
5.6) to be made on behalf of participants employed by
it as determined under subsections 3.2 and 5.6.
3.5. Limitations on Employer Contributions. Each employer's
total contribution for a plan year is conditioned on its deductibility under
Section 404 of the Code, shall comply with the contribution limitations set
forth in subsection 5.10, and shall not exceed an amount equal to the maximum
amount deductible on account thereof by the employer for that year for purposes
of federal taxes on income.
3.6. Payment of Employer Contributions. With respect to
employees in the JBI Division, the company shall pay its matching contribution
under subsection 3.2 as soon as
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practicable after each valuation date. All other employer matching
contributions under the plan for any plan year shall be paid on or before the
time prescribed by law for filing each employer's federal income tax return for
the taxable year of the employer coinciding with or ending within the plan year
for which the contribution is made, including extensions thereof. All pretax
contributions shall be paid to the trustee within 30 days of the date amounts
are withheld from compensation.
3.7. Verification of Employer Contributions. If for any
reason the company decides to verify the correctness of any amount or
calculation relating to an employer's contribution for any plan year, the
certificate of an independent accountant selected by the company as to the
correctness of any such amount or calculation shall be conclusive on all
persons.
3.8. No Interest in Employers. The employers shall have no
right, title or interest in the trust fund, nor shall any part of the trust
fund revert or be repaid to an employer, directly or indirectly, unless:
(a) the Internal Revenue Service initially determines
that the plan, as applied to such employer, does not
meet the requirements of Section 401(a) of the Code,
in which event the contributions made to the plan by
such employer shall be returned to it within one year
after such adverse determination;
(b) a contribution is made by such employer by mistake of
fact and such contribution is returned to the
employer within one year after payment to the
trustee; or
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<PAGE> 18
(c) a contribution conditioned on the deductibility
thereof is disallowed as an expense for federal
income tax purposes and such contribution (to the
extent disallowed) is returned to the employer within
one year after the disallowance of the deduction.
Contributions may be returned to an employer pursuant to subparagraph (a) above
only if they are conditioned upon initial qualification of the plan, and an
application for determination was made by the time prescribed by law for filing
the employer's Federal income tax return for the taxable year in which the plan
was adopted (or such later date as the Secretary of the Treasury may
prescribe). The amount of any contribution that may be returned to an employer
pursuant to subparagraph (b) or (c) above must be reduced by any portion
thereof previously distributed from the trust fund and by any losses of the
trust fund allocable thereto, and in no event may the return of such
contribution cause any participant's account balances to be less than the
amount of such balances had the contribution not been made under the plan.
3.9. Limitation on Pretax Contributions. Notwithstanding the
foregoing provisions of this Section 3, in no event shall the average deferral
percentage (as defined below) for any plan year of the highly compensated
employees (as defined in subsection 3.12) who are plan participants exceed the
greater of:
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(a) the average deferral percentage of all other
participants for such plan year multiplied by 1.25; or
(b) the average deferral percentage of all other
participants for such plan year multiplied by 2.0;
provided that the average deferral percentage of such
highly compensated employees does not exceed that of
all other participants by more than 2 percentage
points.
The "average deferral percentage" of a group of participants for a plan year
means the average of the ratios (determined separately for each participant in
such group) of: (i) the pretax contributions made on behalf of such
participant for such plan year; to (ii) the participant's compensation (as
defined in subsection 3.12) for such plan year. For purposes of this
subsection 3.9, a participant means any employee who is eligible to make pretax
contributions under the plan. The pretax contributions made on behalf of the
highly compensated employees will be reduced (in the order of their average
deferral percentages beginning with the highest percentage) to the extent
necessary to meet the requirements of this subsection 3.9. If, because of the
foregoing limitations, a portion of the pretax contributions made on behalf of
a highly compensated employee may not be credited to his account for a plan
year, such portion (and the earnings thereon) shall be distributed to such
employee within two and one-half months after the end of that plan year. The
earnings allocable to pretax contributions distributed pursuant to this
subsection 3.9 shall be determined by multiplying the earnings attributable to
the pretax contrib-
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<PAGE> 20
utions for the year by a fraction, the numerator of which is the excess amount
and the denominator of which is the balance in the appropriate account of the
participant on the last day of the year reduced by gains (or increased by
losses) attributable to such account for the year. A pretax contribution
distributed under this subsection 3.9 shall be an annual addition to the plan
for the plan year(s) during which the amount was contributed to the plan.
3.10. Limitation on Matching Contributions. Notwithstanding
the foregoing provisions of this Section 3, in no event shall the contribution
percentage (as defined below) for any plan year of the highly compensated
employees (as defined in subsection 3.12) who are plan participants exceed the
greater of:
(a) the contribution percentage of all other participants
for such plan year multiplied by 1.25; or
(b) the contribution percentage of all other participants
for such plan year multiplied by 2.0; provided that
the contribution percentage of such highly
compensated employees does not exceed that of all
other participants by more than 2 percentage points.
The "contribution percentage" of a group of participants for a plan year means
the average of the ratios (determined separately for each participant in such
group) of: (i) the matching contributions (as defined in subsection 3.2) made
on behalf of such participant for such plan year; to (ii) the participant's
compensation (as defined in subsection 3.12) for such plan
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<PAGE> 21
year. For purposes of this subsection 3.10, a participant means any employee
who is eligible to make pretax contributions under the plan. The matching
contributions on behalf of the highly compensated employees will be reduced (in
the order of their contribution percentages beginning with the highest
percentage) to the extent necessary to meet the requirements of this subsection
3.10. If, because of the foregoing limitations, a portion of the matching
contributions made on behalf of a highly compensated employee may not be
credited to his account for a plan year, such portion (and the earnings
thereon) shall be forfeited and applied as provided in subsection 6.3. The
earnings allocable to matching contributions forfeited pursuant to this
subsection 3.10 shall be determined by multiplying the earnings attributable to
the matching contributions for the year by a fraction, the numerator of which
is the excess amount and the denominator of which is the balance in the
appropriate account of the participant on the last day of the year reduced by
gains (or increased by losses) attributable to such account for the year.
3.11. Multiple Use of Alternative Limitation.
Notwithstanding the provisions of subsections 3.9 and 3.10, the limitations of
subsections 3.9 and 3.10 can be satisfied with the alternative limitations of
subparagraphs 3.9(b) and 3.10(b) only if the combined deferral percentage for
the highly compensated employees does not exceed the aggregate deferral limit.
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<PAGE> 22
For purposes of this subsection 3.11, the "combined deferral percentage" for
the highly compensated employees shall mean the sum of the average deferral
percentages of the entire group of eligible highly compensated employees under
subsection 3.9 and the contribution percentages of the entire group of eligible
highly compensated employees under subsection 3.10. The "aggregate limit"
shall mean the greater of:
(a) the sum of 125 percent of the greater of (i) the
contribution percentages of the group of non-highly
compensated employees under subsection 3.10 for the
plan year and (ii) the average deferral percentages
of the group of non-highly compensated employees
under subsection 3.9 for the plan year; and two plus
the lesser of (i) or (ii) next above provided that
such amount shall in no event exceed two times the
lesser of (i) or (ii) above; and
(b) the sum of 125 percent of the lesser of (i) the
contribution percentages of the group of non-highly
compensated employees under subsection 3.10 for the
plan year and (ii) the average deferral percentages
of the group of non-highly compensated employees
under subsection 3.9 for the plan year; and two plus
the greater of (i) or (ii) above provided that such
amount shall in no event exceed two times the greater
of (i) or (ii) above.
In the event that the combined deferral percentages for the
highly compensated employees exceeds the aggregate limit and the limitations of
subsections 3.9 and 3.10 can only be satisfied with the alternative limitations
under subparagraphs 3.9(b) and 3.10(b), matching contributions for the group of
highly compensated employees shall be reduced in the same
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manner as provided in subsection 3.10 until such limitation is satisfied or no
longer applies.
3.12. Highly Compensated Employee. A "highly compensated
employee" means any present or former employee who, during the current or
immediately preceding plan year:
(a) was a 5 percent owner of an employer;
(b) received annual compensation from the employers of
more than $75,000 (or such greater amount as may be
determined by the Commissioner of Internal Revenue
for that year);
(c) received annual compensation from the employers of
more than $50,000 (or such greater amount as may be
determined by the Commissioner of Internal Revenue
for that year) and was in the top-paid 20% of the
employees; or
(d) was an officer of an employer receiving annual
compensation greater than 50% of the limitation in
effect under Section 415(b)(1)(A) of the Code;
provided, that for purposes of this subparagraph (d),
no more than 50 employees of the employers (or if
lesser, the greater of 3 employees or 10 percent of
the employees) shall be treated as officers.
Notwithstanding the foregoing, an employee who meets the criteria of
subparagraphs (b), (c) or (d) for the current plan year but not for the
immediately preceding plan year, will not be considered a highly compensated
employee for the current plan year unless such person is one of the 100
highest-paid employees of all the employers aggregated. For purposes of
subsections 3.9 and 3.10, an employee's compensation means his total
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cash compensation for services rendered to the employers as an employee,
determined in accordance with Section 415(c)(3) of the Code and the regulations
thereunder.
3.13. Dollar Limitation on Pretax Contributions. In no event
shall the participant's pretax contributions for any calendar year exceed
$8,994 (or such higher amount as the Secretary of the Treasury shall specify
from time to time pursuant to Section 402(g)(5) of the Code). As of each
December 31, the company shall determine the total pretax contributions made on
behalf of each participant during the preceding calendar year. In the event
that the total exceeds the limitation amount imposed under Section 402(g) of
the Code and this subsection 3.13 for any participant ("excess deferrals"),
such excess deferrals (and the earnings thereon) shall be distributed to the
participant by the following April 15. The earnings attributable to excess
deferrals distributed pursuant to this subsection 3.13 shall be determined by
multiplying the earnings attributable to the excess deferrals for the year by a
fraction, the numerator of which is the excess amount and the denominator of
which is the balance in the appropriate account of the participant on the last
day of the year reduced by gains (or increased by losses) attributable to such
account for the year. An excess deferral distributed under this subsection
3.13 shall be an annual addition to the plan for the plan year(s) during which
the amount was contributed to the plan.
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<PAGE> 25
3.14. Special Family Aggregation Rules. In applying the
limitations and tests set forth in subsections 3.9 and 3.10, the following
family aggregation rules shall apply:
(a) Family members of a highly compensated employee who
is either a five percent owner of an employer or one
of the ten most highly compensated employees with
respect to any plan year, shall not be treated as
separate participants and a single ratio shall be
determined for the family members and the highly
compensated employee ("family group"). The term
"family member" for these purposes shall mean with
respect to any employee, such employee's spouse and
lineal ascendants and descendants and the spouses of
such lineal ascendants and descendants. The family
group shall be treated as a single highly compensated
employee having a ratio for the plan year equal to
the greater of:
(i) The ratio determined by combining the
compensation and contributions and/or
deferrals of all members of the family group
who are highly compensated employees without
regard to family aggregation; and
(ii) The ratio determined by combining the
compensation and contributions and/or
deferrals of all members of the family group.
(b) If a family group has an excess contribution and/or
deferral, the portion of such excess contribution
and/or deferral to be allocated to each member of the
family group shall be determined in accordance with
(i) or (ii) below, whichever applies:
(i) If the ratio for the family group was
determined under subparagraph (a)(i) next
above, excess contributions and/or deferrals
resulting from the required reduction of the
ratio (but not below the ratio obtained by
combining the
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compensation and/or deferrals
and contributions of members of the family
group who are not highly compensated
employees) shall be allocated among the
highly compensated employees in proportion to
their deferrals and/or contributions; if the
ratio for the family group must be reduced
below the ratio of the family members who are
not highly compensated employees, the excess
contribution and/or deferrals resulting from
such further reduction shall be allocated
among all members of the family group in
proportion to their contributions and/or
deferrals.
(ii) If the ratio for the family group was
determined under subparagraph (a)(ii) next
above, the excess contribution and/or
deferrals resulting from the reduction in the
ratio shall be allocated among all members of
the family group in proportion to their
contributions and/or deferrals.
3.15. Rules Governing Pretax Contributions. Unless otherwise
allowed by the company on a uniform and nondiscriminatory basis, the following
rules apply to all elections under subsection 3.1 to make pretax contributions,
to change the rate of such pretax contributions, to suspend such pretax
contributions and to resume pretax contributions after a suspension:
(a) All elections must be made on a form provided by the
company for that purpose.
(b) A pretax contribution election by an employee
eligible to become a participant for the first time
shall become effective as soon as administratively
feasible, and the election shall be effective no
earlier than the first day of a regular pay period.
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(c) A former participant who again becomes a participant,
or a participant who did not make a pretax
contribution election when first eligible must make a
new election. The election shall be effective as
soon as administratively feasible, as of the first
day of a regular pay period.
(d) A participant may elect to suspend the pretax
contribution being contributed on behalf of the
participant at any time. The election shall be
effective as of the first day of the regular pay
period beginning at least 15 days after the date of
the election. If a participant discontinues his
pretax contributions, he may not subsequently elect
under subsection 3.1 to resume making pretax
contributions until the beginning of the pay period
coincident with or next following the first day of
the next following plan quarter.
(e) A Participant also may elect to change the rate of
his pretax contributions (but not retroactively) as
of the beginning of the pay period coincident with or
next following the first day of any plan quarter.
(f) If the company determines that the average deferral
percentage test of subsection 3.9 will be violated,
the company may suspend or reduce pretax
contributions for participants who are highly
compensated employees. The suspension or reduction
shall be made for all or part of the remainder of the
plan year.
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SECTION 4
Period of Participation
4.1. Settlement Date. A participant's "settlement date" will
be the last day of the valuation period in which his employment with all of the
employers is terminated because of the first to occur of the following:
(a) Retirement. The date the participant attains age 65
is the participant's "normal retirement date." A
participant's right to his account balances shall be
nonforfeitable on and after his normal retirement
date.
(b) Total Disability. The total and permanent inability
of the participant engage in any occupation or
perform any work for profit because of disability
(physical or mental), as determined by a qualified
physician selected or approved by the company. This
term shall not include any total disability which:
(i) was contracted suffered or incurred while
the participant was engaged in, or
resulted from his having engaged in, a
criminal act;
(ii) was intentionally self-inflicted; or
(iii) arose out of service in the armed forces
of any country.
(c) Death. The date of the participant's death.
(d) Termination of Employment. Separation from the
service of the employers for any reason.
If a participant is transferred from employment with an employer to employment
with a controlled group member then, for the
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purpose of determining when the participant's settlement date occurs under this
subsection 4.1, the participant's employment with such controlled group member
(or any controlled group member to which he is subsequently transferred) shall
be considered as employment with the employers.
4.2. Restricted Participation. If (i) payment of all of a
participant's account balances is not made at the participant's settlement
date; or (ii) a participant transfers to a controlled group member or no longer
meets the requirements of subparagraph 2.1(b); the participant or the
participant's beneficiary will be treated as a participant for all purposes of
the plan, except as follows:
(a) The participant will not share in matching
contributions after his employment with all of the
employers is terminated, or during any period the
participant is either employed by a controlled group
member or fails to meet the requirements of
subparagraph 2.1(b); except as provided in subsection
5.6.
(b) The participant may not make pretax contributions
under Section 3 after his employment with all of the
employers is terminated, or during any period the
participant is either employed by a controlled group
member or fails to meet the requirements of
subparagraph 2.1(b).
(c) The beneficiary of a deceased participant cannot
designate a beneficiary under subsection 6.6.
If a participant whose participation in the plan is restricted for the reason
specified in (ii) above subsequently is employed by an employer or meets the
requirements of subparagraph 2.1
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(b), he will again become an active participant in the plan on the date he is
reemployed or satisfies such requirements.
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SECTION 5
Accounting; Contribution and Benefit Limitations
5.1. Separate Accounts. The company will maintain in the
name of each participant, to the extent applicable, the following accounts:
(a) A "pretax contribution account" to reflect (i) the
pretax contributions, if any, credited to the
participant's account under the plan or under the JBI
Plan on or before December 31, 1992, (ii) the pretax
contributions, if any, made on or after January 1,
1993 by an employer on a participant's behalf
pursuant to the participant's election under
subsection 3.1, and (iii) the income, losses,
appreciation and depreciation attributable thereto.
A participant shall at all times have a
nonforfeitable right to the net credit balance in his
pretax contribution account.
(b) A "matching contribution account" to reflect (i) the
matching contributions credited to the participant's
account under the plan or under the JBI Plan on or
before December 31, 1992, (ii) the participant's
share of the matching contributions made on or after
January 1, 1993 pursuant to subsection 3.2 and
credited to the participant's account pursuant to
subsection 5.6, and (iii) the income, losses,
appreciation and depreciation attributable thereto.
The company also may maintain such other accounts in the names of participants
or otherwise as it considers advisable, including "rollover" accounts. Unless
the context indicates otherwise, references in the plan to a participant's
"accounts" means all accounts maintained in the participant's name under the
plan.
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5.2. Valuation Dates. A "valuation date" is September 30,
December 31, March 31 and June 30, and any other date designated as such by the
company and the trustee, and a special valuation date occurring under
subsection 11.3. A "valuation period" is a period between valuation dates.
5.3. Employer Contributions Considered Made on Last Day of
Plan Year. For purposes of this Section 5, each employer's pretax
contributions and matching contributions for any plan year will be considered
to have been made on the last day of that year or, if earlier, when actually
paid to the trustee.
5.4. Adjustment of Participants' Accounts. As of each
valuation date the company shall:
(a) First, charge to the proper accounts one-half of all
hardship withdrawals made during the valuation period
but prior to the valuation date established for such
purpose, and adjust the subaccounts under such
accounts accordingly;
(b) Next, allocate and credit the balances in the
accounts of all participants with one-half of the
pretax contributions, matching contributions and
rollovers, if any, made on their behalf for the
valuation period ending on that valuation date in
accordance with subsections 5.5, 5.6 and 5.8,
respectively, and adjust the subaccounts under such
accounts accordingly;
(c) Next, adjust the credit balances in the subaccounts
of all participants invested in each investment fund
upward or downward, pro rata, to reflect the
appreciation, depreciation, income or losses
attributable to the investment fund so that the total
of the credit balances will equal the then
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adjusted net worth (as defined below) of that
investment fund;
(d) Next, charge to the proper accounts the remaining
one-half of all hardship withdrawals made during the
valuation period but prior to the valuation date
established for such purpose, and adjust the
subaccounts under such accounts accordingly;
(e) Next, allocate and credit the balances in the
accounts of all participants with the remaining
one-half of the pretax contributions, matching
contributions and rollovers, if any, made on their
behalf for the valuation period ending on that
valuation date in accordance with subsections 5.5,
5.6 and 5.8, respectively, and adjust the subaccounts
under such accounts accordingly;
(f) Finally, charge to the proper accounts all
withdrawals or distributions which are to be made as
of the current valuation date, and adjust the
subaccounts under such accounts accordingly.
The "adjusted net worth" of an investment fund as at any date means the then
net worth of that investment fund as determined by the trustee, including any
contributions paid to the trustee and invested in that investment fund that are
required to be credited to participants' accounts as of that valuation date in
accordance with subparagraph (b), but disregarding any contributions that are
required to be credited to participants' accounts as of that valuation date in
accordance with subparagraph (e) and disregarding any withdrawals or
distributions which are to be deducted in accordance with subparagraphs (d) and
(f). Forfeitures will not be adjusted in accordance with subparagraph (c)
above.
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5.5. Allocation of Pretax Contributions. Subject to
subsection 3.9, as of each valuation date, each participant's pretax
contribution account shall be allocated pretax contributions in an amount equal
to all pretax contributions contributed during the valuation period ending on
that valuation date on behalf of each participant who is an employee of the
company. The allocation shall be made no later than the first valuation date
after the trustee receives the pretax contribution; provided, however, that
amounts paid to the trustee within 30 days after the close of the plan year
shall be allocated as of the close of the plan year.
5.6. Allocation of Matching Contributions. Subject to
subsection 3.10, as of the end of each plan quarter, a portion of the matching
contribution made on behalf of JBI Division employees shall be allocated to the
matching contribution account of each participant for whom a pretax
contribution is contributed to the plan. Subject to subsection 3.10, as of the
end of each plan year, a portion of each other employer matching contribution
shall be allocated to the matching contribution account of any other
participant for whom a pretax contribution is contributed to the plan by such
employer (excluding participants who were credited with less than 1,000 hours
of service for such plan year and excluding participants who were terminated
from the employ of all the employers during that year before attaining age 65
years and for a reason
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other than death or total disability). The matching contribution allocated to
a participant's matching contribution account for the relevant allocation
period shall be in the same proportion to the total employer matching
contribution of his employer as the pretax contribution for the participant for
the relevant allocation period bears to the total pretax contribution of all
participants employed by that employer for the relevant allocation period. For
participants employed in the JBI Division, the "relevant allocation period"
means a plan quarter. For all other participants, the "relevant allocation
period" means the plan year; further, for such other participants, the matching
contribution may be made prior to the end of the plan year and allocated at any
time after receipt by the trustee, on a provisional basis.
5.7. Charging Distributions. All payments or distributions
made to a participant or his beneficiary will be charged to the appropriate
accounts of such participant.
5.8. Rollovers. At the direction of the company, and in
accordance with such rules as the company may establish from time to time,
rollover amounts and contributions credited to a participant's account under
the plan or the JBI Plan on or before December 31, 1992, rollover amounts
described in Section 402(c) of the Code, rollover contributions described in
Section 408(d)(3) of the Code and benefits of an employee under another plan
which meets the requirements of Section 401(a) of the Code
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may be received by the trustee, and will be credited to an account established
in the name of the employee, will be invested in the interest income fund, and
may not be invested in another fund until the valuation date next following the
acceptance of the rollover contribution pursuant to a change in investment
elections under subsection 7.5. Provided, however, that no portion of a
rollover amount or contribution which consists of nondeductible employee
contributions will be accepted by the trustee. Any amount received by the
trustee for an employee in accordance with the preceding sentence shall be
adjusted from time to time in accordance with subparagraph 5.4(c) and shall be
fully vested in the employee for whom it is held under the plan.
5.9. Statement of Account. As soon as practicable after the
last day of each valuation date and on any other date as determined by the
company, each participant will be furnished with a statement reflecting the
condition of his accounts in the trust fund as of that date. No participant,
except one authorized by the company, shall have the right to inspect the
records reflecting the accounts of any other participant.
5.10. Contribution Limitations. For each plan year, the
annual addition (as defined below) to a participant's accounts under the plan
shall not exceed the lesser of $30,000 (or, if greater, 1/4 of the dollar
limitation in effect under
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Section 415(b)(1)(A) of the Code for the calendar year which begins with or
within that plan year) or 25 percent of the participant's Section 415
compensation (as defined below) during that plan year. The term "annual
addition" for any plan year means the sum of the pretax contributions and
matching contributions credited to a participant's accounts for that year. If
a participant's annual addition exceeds the limitation of this subsection 5.10,
the amount of matching contributions allocated to such participant for that
plan year shall be reduced to the extent necessary to meet the above
limitations and the amount of such matching contributions which cannot be
allocated to the participant's accounts shall be applied to reduce matching
contributions in succeeding plan years in order of time. If, after the
reduction described in the immediately preceding sentence, the limitations of
this subsection 5.10 are still exceeded, such participant's pretax
contributions shall be returned to him so that the annual addition to the
participant's account under the plan meets the limitation of this subsection.
A participant's "Section 415 compensation" means his total cash compensation
for services rendered to the employers as an employee, determined in accordance
with Section 415(c)(3) of the Code and the regulations thereunder.
5.11. Combined Benefit Limitations. If a participant in this
plan also is a participant in a defined benefit plan maintained by an employer,
the aggregate benefits payable
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to, or on account of, him under both plans will be determined in a manner
consistent with Section 415 of the Code and Section 1106 of the Tax Reform Act
of 1986. Accordingly, there will be determined with respect to the participant
a defined contribution plan fraction and a defined benefit plan fraction in
accordance with said Sections 415 and 1106. The benefits provided for the
participant under the defined benefit plan will be adjusted to the extent
necessary so that the sum of such fractions determined with respect to the
participant does not exceed 1.0.
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SECTION 6
Payment of Account Balances
6.1. Retirement or Death. If a participant's employment with
all of the employers is terminated because of retirement under subparagraph
4.1(a), total disability under subparagraph 4.1(b), or death under subparagraph
4.1(c), the balances in his pretax contribution account and matching
contribution account (after all adjustments required under the plan have been
made) shall be nonforfeitable and shall be distributable to him, or in the
event of his death to his beneficiary, under subsection 6.4.
6.2. Resignation or Dismissal. If a participant is
terminated for any reason other than retirement under subparagraph 4.1(a),
total disability under subparagraph 4.1(b) or death under subparagraph 4.1(c),
the balances in his pretax contribution account (after all adjustments required
under the plan have been made) shall be nonforfeitable and shall be
distributable to him in accordance with subsection 6.4. The balance in the
participant's matching contribution account as at his settlement date (after
all adjustments required under the plan have been made) will be reduced to the
vested percentage computed in accordance with the following schedule:
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If the Participant's The Vested Percentage of
Number of Years of His Matching Contribution
Service Is: Sharing Account Will Be:
-------------------- ---------------------------
Less than 5 years 0%
5 years or more 100%
Notwithstanding the foregoing, the balance in the matching contributions
account as at a participant's settlement date (after all adjustments required
under the plan have been made) will be reduced to the vested percentage
computed in accordance with the following schedule if such participant was a
participant in the JBI Plan on or before December 31, 1992:
If the Participant's The Vested Percentage of
Number of Years of His Employer Profit Sharing
Service Is: Sharing Account Will Be:
-------------------- ---------------------------
Less than 1 years 0%
1 years but less than 2 years 20%
2 years but less than 3 years 40%
3 years but less than 4 years 60%
4 years but less than 5 years 80%
5 years or more 100%
The resulting vested percentage in the participant's matching contribution
account will be distributable to the participant under subsection 6.4. A "year
of service" shall mean any plan year (commencing with the year the plan
originally was established) in which the participant has completed at least
1,000 hours of service, subject to the following:
(a) A period of concurrent employment with two or more
employers or controlled group members will be
considered as employment with only one of them during
the period.
(b) Termination of employment of a participant with one
employer or a controlled group member will not
interrupt his service for purposes of the plan if,
concurrently with
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or immediately after such termination, he is
employed by one or more other employers or
controlled group members.
If a participant completes 1,000 hours of service in both the period from
January 1, 1993 to December 31, 1993 and the period from July 1, 1993 to June
30, 1994, such participant shall be credited with two years of service.
6.3. Forfeitures. The amount by which a participant's
matching contribution account is reduced under subsection 6.2 shall be a
"forfeiture." On the last day of the relevant allocation period, all
forfeitures arising during the relevant allocation period shall be allocated
among and credited to the matching contribution accounts of participants
reemployed by the employer to which the forfeiture is attributable to the
extent required by subsection 8.2 and then shall be used to reduce the matching
contribution required of the employer to which the forfeiture is attributable
by subsections 3.2 and 3.4.
6.4. Manner of Distribution. Subject to the conditions set
forth below, after each participant's settlement date, distribution of the net
credit balances in the participant's accounts will be made to or for the
benefit of the participant, or in the case of the participant's death to or for
the benefit of his beneficiary, by either or both of the following methods:
(a) By payment in a lump sum.
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(b) By payment in a series of annual or more frequent
installments (but not more frequently than quarterly)
over a period not exceeding the life expectancy of
the participant or the joint life expectancy of the
participant and his designated beneficiary; provided
that, if such beneficiary is not the participant's
spouse and is more than 10 years younger than the
participant, the installments shall be paid over a
period not exceeding the joint life expectancy of the
participant and a beneficiary 10 years younger than
the participant.
The life expectancy of a participant, the participant's spouse or the
participant's designated beneficiary shall be determined by use of the expected
return multiples contained in the regulations under Section 72 of the Code. If
a participant so elects, the life expectancy of the participant and the
participant's spouse shall be recalculated annually. In the absence of such an
election, life expectancies shall not be recalculated. If a participant dies
after his required commencement date (as defined in subsection 6.5), the
remaining portion of the participant's benefits must be distributed over a
period not exceeding the period over which payments were being made to the
participant. If a participant dies before his required commencement date, his
benefits must be distributed over a period not exceeding the greatest of: (i)
five years from the death of the participant; (ii) in the case of payments to a
designated beneficiary other than the participant's spouse, the life expectancy
of such beneficiary, provided payments begin within one year of the
participant's death; or (iii) in the case of payments to the participant's
spouse, the life expectancy of
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such spouse, provided payments begin by the date the participant would have
attained age 70-1/2. A participant may select, in accordance with such rules
as the company may establish, the method of distributing his benefits to him; a
participant, if he so desires, may direct how his benefits are to be paid to
his beneficiary; and the beneficiary shall select the method of distributing
the participant's benefits to his beneficiary if the participant has not filed
a direction with the company. If a participant or a beneficiary fails to make
an election within a reasonable time, or if one or more beneficiaries cannot
agree on the election to be made hereunder, it shall be presumed conclusively
that payment in lump sum form was elected. Distributions of amounts invested
in the Sara Lee Corporation common stock fund made pursuant to subsections 6.1
or 6.2 may be made in cash or in shares, as elected by the participant,
provided such shares are distributed at their fair market value at the date of
distribution, as determined by the trustees. All other distributions,
including distributions of amounts invested in the Sara Lee Corporation common
stock fund that are not made pursuant to subsections 6.1 or 6.2, shall be made
in cash. All distributions under the plan shall comply with the requirements
of Section 401(a)(9) of the Code and the regulations thereunder.
6.5. Commencement of Distributions. Except as provided below
in this subsection, payment of a participant's
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benefits will be made (or installment payments will commence) within a
reasonable time after the participant's settlement date, but not later than 60
days after the latest to end of the plan year in which the participant (a)
attains age 65, (b) completes 10 years of participation in the plan, (c)
terminates his employment with all the employers, or (d) such later date on
which the amount of the payment can be ascertained by the company. A
distribution hereunder shall be valued as of the valuation date immediately
preceding the date of payment.
(a) If a participant's settlement date occurs before he
attains his normal retirement date and if his account
balance as of the date payments or distributions are
to commence exceeds $3,500, no payment or
distribution of his account balance shall be made
prior to the participant's normal retirement date
unless the participant consents in writing to receive
a payment or distribution. Effective January 1,
1994, the participant may elect to defer payment of
his account balance until any regular valuation date
following his settlement date, but not later than the
first regular valuation date of the first calendar
year beginning after the participant's normal
retirement date.
(b) Effective January 1, 1994, if a participant's account
balance is less than or equal to $3,500 or if a
participant's settlement date occurs on or after his
normal retirement date, payment of such account
balance may be deferred until the first regular
valuation date of the first calendar year beginning
after the participant's settlement date occurs.
(c) Distribution of a participant's benefits shall be
made (or installment payments shall commence) by
April 1 of the calendar year next following the
calendar year in which the participant attains age
70-1/2 (his "required commencement date").
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6.6. Designation of Beneficiary. Each participant from time
to time, by signing a form furnished by the company, may designate any person
or persons (who may be designated concurrently, contingently or successively)
to whom his benefits are to be paid if he dies before he receives all of his
benefits. A beneficiary designation form will be effective only when the form
is filed with the company while the participant is alive and will cancel all
beneficiary designation forms previously filed with the company. If a
participant designates someone other than (or in addition to) his spouse as his
primary beneficiary, the participant's spouse must consent in writing to the
designation. Such a consent will be effective only if it acknowledges the
specific beneficiary and the effect of the beneficiary designation, is
witnessed by a plan representative or a notary public, and may not be changed
without further spousal consent (unless the consent expressly permits
subsequent beneficiary designations without spousal consent). If a participant
designates someone other than (or in addition to) his spouse as his primary
beneficiary, and the participant's spouse does not (or cannot) consent and is
living at his death, the participant's beneficiary designation shall be
ineffective, and his benefits shall be distributed to his spouse. If a
deceased participant failed to designate a beneficiary as provided above, or if
the designated beneficiary dies before the participant or before complete
payment of the participant's benefits, the participant's benefits shall be
distributed to
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the legal representative or representatives of the estate of the last to die of
the participant and his designated beneficiary, if then under the active
administration of a probate court, or, if not, to those persons who would then
take the last to die of the participant or beneficiary's property under the
applicable state intestate laws then in force and in the proportions provided
therein. The term "designated beneficiary" as used in the plan means the
person or persons (including a trustee or other legal representative acting in
a fiduciary capacity) designated by a participant as his beneficiary in the
last effective beneficiary designation form filed with the company under this
subsection and to whom a deceased participant's benefits are payable under the
plan. The term "beneficiary" as used in the plan means the natural or legal
person or persons to whom a deceased participant's benefits are payable under
this subsection 6.6. The term "spouse" as used in this subsection means the
spouse to whom the participant was married at the earlier of the date of his
death or the date payment of his benefits commenced, and who is living at the
date of the participant's death. The company shall determine the proper
individual or individuals to whom payment should be made hereunder, and its
decision shall be final and binding on all persons.
6.7. Missing Participants or Beneficiaries. Each participant
and each designated beneficiary must file with the
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company from time to time in writing his post office address and each change of
post office address. Any communication, statement or notice addressed to a
participant or beneficiary at his last post office address filed with the
company, or if no address is filed with the company then, in the case of a
participant, at his last post office address as shown on the employers'
records, will be binding on the participant and his beneficiary for all
purposes of the plan. Neither the employers nor the company will be required
to search for or locate a participant or beneficiary.
6.8. Facility of Payment. When a person entitled to benefits
under the plan is under legal disability, or, in the company's opinion, is in
any way incapacitated so as to be unable to manage his financial affairs, the
company may direct the trustee to pay the benefits to such person's legal
representative, or to a relative or friend of such person for such person's
benefit, or the company may direct the application of such benefits for the
benefit of such person. Any payment made in accordance with the preceding
sentence shall be a full and complete discharge of any liability for such
payment under the plan.
6.9. Hardship Withdrawals of Pretax Contributions. A
participant in the active service of an employer may withdraw all or a portion
of his pretax contributions account attributable to pretax contributions
(excluding earnings credited to
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his pretax contributions on or after January 1, 1989) provided that (i) such
withdrawal both is made on account of an immediate and heavy financial need of
the participant and is necessary to satisfy such financial need; (ii) such
withdrawal is at least $250.00, and (iii) such withdrawal does not exceed the
amount required to meet the immediate and heavy financial need and pay any
taxes that will be incurred by the participant on account of such withdrawal.
Such immediate and heavy financial need must be shown by positive evidence
submitted to the company. The determination of whether a participant has an
immediate and heavy financial need shall be made on the basis of all relevant
facts and circumstances in a consistent and nondiscriminatory manner, and shall
not fail to qualify because it was reasonably foreseeable or voluntarily
incurred by the participant. Immediate and heavy financial needs are limited
to amounts necessary for:
(a) Medical expenses incurred by the participant, his
spouse or his dependents.
(b) Purchase (excluding mortgage payments) of a principal
residence for the participant.
(c) Payment of tuition and related educational fees for
the next twelve months of post-secondary education
for the participant, his spouse or his dependents.
(d) Preventing foreclosure on or eviction from the
participant's principal residence.
Whether, in any case, the requirement that the withdrawal not exceed the amount
required to meet the immediate financial need (and taxes attributable thereto)
created by the serious finan-
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cial hardship is satisfied shall be made on the basis of all relevant facts and
circumstances in a consistent and nondiscriminatory manner; provided that, the
participant must provide the company with a written statement on which the
company may reasonably rely, certifying that the participant's financial need
cannot be relieved by all of the following means:
(a) Through reimbursement or compensation by insurance or
otherwise,
(b) By reasonable liquidation of the participant's
assets, to the extent such liquidation would not
itself cause an immediate and heavy financial need,
(c) By cessation of pretax contributions under this plan,
or other distributions from this plan, and
(d) By other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the company
(including this plan) or by any other employer, or by
borrowing from commercial sources on reasonable
commercial terms.
For purposes of this subsection 6.9, the participant's resources shall be
deemed to include those assets of the participant's spouse and minor children
that are reasonably available to the participant. Property owned by the
participant and the participant's spouse, whether as community property, joint
tenants, tenants by the entirety, or tenants in common, will be deemed a
resource of the participant. However, property held for the participant's
child under an irrevocable trust or under the Uniform Transfers to Minors Act
will not be treated as a resource of the participant. A participant may not
request more
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than two withdrawals per calendar year under this subsection 6.9. A withdrawal
under this subsection 6.9 shall be made as of a regular valuation date, after
all adjustments as of that date have been made pursuant to subsection 5.4.
Alternatively, a withdrawal may be made before a regular valuation date in
accordance with rules established by the company; provided that, the amount of
such withdrawal shall be limited to the lesser of the amount required to
satisfy the immediate and heavy financial need (as determined above) or eighty
percent of the balance of the participant's accounts as of the immediately
preceding valuation date. Withdrawals under this subsection 6.9 made from the
Sara Lee Corporation Common Stock Fund shall be paid in cash.
6.10. Direct Transfer of Eligible Rollover Distributions. If
payment of a participant's benefits constitutes an eligible rollover
distribution under Section 402(c)(4) of the Code, then the participant may
elect to have such distribution paid directly to an eligible retirement plan
described in Section 402(c)(8)(B) of the Code. Each election by a participant
under this subsection 6.10 shall be made at such time and in such manner as the
committee shall determine, and shall be effective only in accordance with such
rules as shall be established from time to time by the committee.
6.11. Distribution to Alternate Payees. The company may
direct the trustee to distribute benefits to an alternate
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payee on the earliest date specified in a qualified domestic relations order,
without regard to whether such distribution is made or commences prior to the
participant's earliest retirement age (as defined in Section 414(p)(4)(B) of
the Code) or the earliest date that the participant could commence receiving
benefits under the plan.
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SECTION 7
The Trust Fund and Investment of Trust Assets
7.1. The Trust Fund. The trust fund will consist of all
money, stocks, bonds, securities and other property of any kind held and
acquired by the trustee in accordance with the plan and the trust instrument.
7.2. The Investment Funds. The following "investment funds"
shall be maintained within the trust fund:
(a) Interest Income Fund. An "interest income fund," the
assets of which are primarily invested in fixed
interest instruments (including investment contracts
between the trustee and a legal reserve life
insurance company, commercial bank, savings and loan
association or other financial institution or
corporation) intended to provide for safety of
principal and a positive rate of return.
(b) Diversified Equity Fund. A "diversified equity
fund," the assets of which are primarily invested in
a diversified pool of a large number of stocks (or
mutual fund shares) intended to provide a greater
rate of return than the interest income fund, but
entailing a risk of loss of principal.
(c) Balanced Fund. A "balanced fund," the assets of
which are primarily invested in a diversified
portfolio of stocks and investment grade bonds,
intended to provide current income and a potential
for long-term growth of income and capital, and a
greater rate of return than the interest income fund,
but entailing a risk of loss of principal. The
balanced fund shall be maintained within the trust
fund only for plan years beginning after June 30,
1993.
(d) International Equity Fund. An "international equity
fund," the assets of which
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are primarily invested in securities representing
interests in companies located outside of the
United States, intended to provide long-term
growth of capital, and a greater rate of return
greater than the balanced fund, but entailing a risk
of loss of principal. The international fund shall
be maintained within the trust fund only for plan
years beginning after June 30, 1993.
(e) Small Stock Fund. A "small stock fund," the assets
of which are primarily invested aggressively in a
portfolio of growth-oriented stocks (or mutual fund
shares), intended to provide a greater rate of return
than the diversified equity fund, but entailing a
greater risk of loss of principal. The small stock
fund will be referred to as the "aggressive equity
fund" for plan years beginning before July 1, 1993.
(f) Sara Lee Corporation Common Stock Fund. A "Sara Lee
Corporation common stock fund," the assets of which
are primarily invested in shares of Sara Lee
Corporation common stock ("Sara Lee stock").
The interest income fund, diversified equity fund, balanced fund, international
equity fund, small stock fund and Sara Lee Corporation common stock fund are
sometimes referred to individually as an "investment fund" and collectively as
the "investment funds." A portion of each investment fund may be invested from
time to time in the short-term investment fund (STIF) of a custodian bank.
7.3. Investment Elections. In accordance with rules
established by the company, a participant may elect by writing filed with the
company to have his account balances invested in one or more of the investment
funds in even multiples of ten
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percent. If a participant does not (or is not permitted to) make the election
described above within such reasonable period as may be determined by the
company, the participant shall be deemed to have elected that his entire
account balances be invested in the interest income fund. Amounts credited to
a participant's accounts after his investment election shall be invested in
accordance with that election, subject to any subsequent elections the
participant makes under subsections 7.4 and 7.5.
7.4. Change in Investment Elections. Effective as of the
first day of any valuation period, a participant may elect to change his
investment election in accordance with the rules described in subsection 7.8.
Such change shall apply only with respect to contributions made by or on behalf
of the participant that are received by the trustee after having been notified
of the change.
7.5. Elections to Reallocate Balances Between Accounts.
Effective as of the beginning of any valuation period, a participant may elect
to reallocate ten percent, or an even multiple of ten percent, of the balance
in his accounts in an investment fund from that fund to another of the
investment funds. The participant's accounts for the investment fund from
which such reallocation is made will be charged, and his accounts for the
investment fund to which such reallocation is made will be credited, with the
amount so reallocated in accor-
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dance with rules established by the company. Such transfers of balances in
accounts between investment funds shall be made on the valuation date preceding
the beginning of the valuation period for which the investment election is
effective after all of the accounting steps set forth in subsection 6.4 of the
plan have been completed. The foregoing provisions of this subsection 7.5 are
contingent upon the availability of reallocations between investment funds
under the terms of the investments made by each investment fund.
7.6. Elections After Retirement or Other Termination of
Employment. Notwithstanding the foregoing provisions of this Section 7, if a
participant's settlement date occurs for any reason, all of the participant's
account balances shall be transferred to the interest income fund, as of April
1 of the calendar year following the calendar year in which the participant's
settlement date occurs, until all benefits to which such participant (or his
beneficiaries) are entitled under the plan have been distributed.
7.7. Voting of Sara Lee Stock; Tender Offers. The company
shall notify participants of each meeting of the shareholders of Sara Lee
Corporation and shall furnish to them copies of the proxy statements and other
communications distributed to shareholders in connection with any such meeting.
The company also shall notify the participants that they are entitled to give
the trustees voting instructions as to the shares
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of Sara Lee stock credited to their accounts. If a participant furnishes
timely instructions to the trustees, the trustees (in person or by proxy) shall
vote the shares (including fractional shares) of Sara Lee stock credited to the
participant's accounts in accordance with the directions of the participant.
The trustees shall vote shares for which they have not received timely
direction, including shares which have not yet been credited to participant's
accounts, in the same proportion as directed shares are voted. Similarly, the
company shall notify participants of any tender offer for, or a request or
invitation for tenders of Sara Lee stock and shall request from each
participant instructions for the trustees as to the tendering of Sara Lee stock
credited to his accounts. The trustees shall tender such Sara Lee stock as to
which they receive (within the time specified in the notification) instructions
to tender. Any Sara Lee stock credited to the accounts of participants as to
which instructions not to tender are received and as to which no instructions
are received shall not be tendered. With respect to uncredited shares of Sara
Lee stock, the trustees in their discretion may tender or refrain from
tendering such shares.
7.8. Form of Elections. Subject to such rules and
restrictions as the company may establish, any election described in
subsections 7.4 or 7.5 shall be made pursuant to one of the following methods
as determined by the company in its
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sole discretion: (i) in writing, by filing a written election form specified by
the company, (ii) by telephone through a telephone system established by the
company for this purpose, or (iii) by any other method designated by the
company. If the company in its discretion determines that elections under this
subsection 7.8 shall be made in a manner other than in writing, any participant
who makes an election pursuant to such method shall receive written
confirmation of such election; further, any such election and confirmation will
be the equivalent of a writing for all purposes.
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SECTION 8
Reemployment
8.1. Resumption of Participation. If a participant's
employment with all of the employers should terminate and such participant is
subsequently reemployed by an employer, he shall again become a participant as
of his date of rehire if he then meets the requirements of subparagraph 2.1(b),
and if he was a vested participant at his termination of employment, the years
of service to which he was then entitled shall be reinstated. If an employee
who is not participating in the plan should terminate employment and then
subsequently be reemployed by an employer, his eligibility for participation
shall be determined in accordance with subsection 2.1, and he shall become a
participant as of his date of rehire if he then meets the requirements of
subparagraph 2.1(b) and had met the requirements of subparagraph 2.1(a) prior
to his termination. The years of service accrued prior to termination of
employment by a non-vested participant or by an employee who was not a
participant shall be disregarded for purposes of subsection 6.2 only if the
individual's number of consecutive one-year breaks in service (as defined
below) occurring after his termination equal or exceed the greater of (i) five,
or (ii) his years of service prior to his termination. In no event shall years
of service occurring after a participant incurs five consecutive one-year
breaks in service be used to determine the percentage
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of his employer contribution account to which he was entitled as of a prior
settlement date. A "one-year break in service" shall occur on the valuation
date at the end of any plan year during which a terminated employee or
participant does not complete more than 500 hours of service (250 hours of
service for the short plan year ending June 30, 1993). A "vested participant"
is a participant who, at his prior termination of employment, had a
nonforfeitable right under subsection 6.2 to all or part of his accounts; a
"nonvested participant" is a participant who had no such nonforfeitable right.
8.2. Reinstatement of Forfeiture. If a participant whose
employment had terminated for reasons other than retirement under subparagraph
4.1(a), total disability under subparagraph 4.1(b) or death under subparagraph
4.1(c) before he was entitled to the full balance in his accounts is reemployed
by an employer or controlled group member before he incurs five consecutive
one-year breaks in service, he may repay to the trustee (within five years of
his date of reemployment) the total amount distributed to him from his accounts
as a result of his earlier termination of employment. If a participant makes
such a repayment to the trustee, both the amount of the repayment and the
forfeiture which resulted from his earlier termination of employment shall be
credited to his accounts as of the regular accounting date coincident with or
next following the date of repayment (after all other adjustments required
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under the plan as of that date have been made). Forfeitures which are credited
to participants' accounts as of a regular accounting date under this subsection
8.2 shall reduce: first, forfeitures attributable to that employer to be
allocated as of that date under subsection 6.3; then, income and gains of the
trust fund to be credited as of that date under subparagraph 5.4(c); and
finally, matching contributions of that employer to be allocated as of that
date under subsection 5.6.
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SECTION 9
Administration
9.1. Committee's General Powers, Rights and Duties. Except
as otherwise specifically provided and in addition to the powers, rights and
duties specifically given to the company elsewhere in the plan and the trust
agreement, the company may, but shall not be required to, appoint a committee
of such number as it may determine to act as a named fiduciary for operation
and management of the plan. The committee shall have the following
discretionary powers, rights and duties:
(a) To adopt such regulations and rules of procedure as
in its opinion may be necessary for the proper and
efficient administration of the plan and as are
consistent with the plan and trust agreement.
(b) To determine all questions arising under the plan and
make factual determinations thereunder, including the
power to determine the rights or eligibility of
employees or participants and any other persons, and
to remedy ambiguities, inconsistencies or omissions.
(c) To enforce the plan in accordance with its terms and
the terms of the trust agreement.
(d) To construe the plan and trust agreement and make
factual determinations thereunder, to reconcile and
correct any errors or inconsistencies and to make
adjustments for any mistakes or errors made in the
administration of the plan.
(e) To furnish the employers with such information as may
be required by them for tax or other purposes.
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(f) To employ agents and counsel and to delegate to them
such powers it considers advisable.
9.2. Secretary of the Committee. The committee may appoint a
secretary to act upon routine matters connected with the administration of the
plan, to whom the committee may delegate such authorities and duties as they
deem expedient.
9.3. Manner of Action. During a period in which two or more
committee members are acting, the following provisions apply where the context
admits:
(a) A committee member by writing may delegate any or all
of such member's rights and duties to any other
member, with the consent of the latter.
(b) The committee may act by meeting or by writing signed
without meeting, and may sign any document by signing
one document or concurrent documents.
(c) An action or a decision of a majority of the members
of the committee as to a matter shall be as effective
as if taken or made by all members of the committee.
(d) If, because of the number qualified to act, there is
an even division of opinion among the committee
members as to a matter, a disinterested party
selected by the committee may decide the matter and
such party's decision shall control.
(e) The certificate of the secretary of the committee or
of a majority of the members that the committee has
taken or authorized any action shall be conclusive in
favor of any person relying on the certificate.
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9.4. Interested Committee Member. If a member of the
committee is also a participant in the plan, he may not decide or determine any
matter or question concerning distributions of any kind to be made to him or
the nature or mode of settlement of his benefits unless such decision or
determination could be made by him under the plan if he were not serving on the
committee.
9.5. Resignation or Removal of Committee Members. A member
of the committee may be removed by the company at any time by 10 days' prior
written notice to him and the other members of the committee. A member of the
committee may resign at any time by giving 10 days' prior written notice to the
company and the other members of the committee. The company or the remaining
members of the committee may fill any vacancy in the membership of the
committee. The company shall give prompt written notice thereof to the other
members of the committee. Until any such vacancy is filled, the remaining
members may exercise all of the powers, rights and duties conferred on the
committee.
9.6. Committee Expenses. All costs, charges and expenses
reasonably incurred by the committee will be paid by the employers in such
proportions as the committee may direct. No compensation will be paid to a
committee member as such.
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9.7. Information Required by Company or Committee. Each
person entitled to benefits under the plan shall furnish the company or the
committee, as the case may be, with such documents, evidence, data or
information as the company or the committee, as the case may be, considers
necessary or desirable for the purpose of administering the plan. The
employers shall furnish the company or the committee, as the case may be, with
such data and information as the company or the committee, as the case may be,
may deem necessary or desirable in order to administer the plan. The records
of the employers as to an employee's or participant's period of employment,
hours of service, termination of employment and the reason therefor, leave of
absence, reemployment and earnings will be conclusive on all persons unless
determined to the company or the committee's satisfaction, as the case may be,
to be incorrect.
9.8. Uniform Rules. The company or the committee, as the
case may be, shall administer the plan on a reasonable and nondiscriminatory
basis and shall apply uniform rules to all persons similarly situated.
9.9. Claims Procedure. A determination by the company or the
committee, as the case may be, with respect to eligibility to a participate,
service credits, vested percentage, eligibility for a benefit, the amount of a
benefit, or another matter relating to a particular participant or beneficiary,
shall be reviewed by the company or the committee, as
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the case may be, or an individual designated by the company or the committee,
as the case may be, for this purpose, upon application by the affected
participant or beneficiary. The initial decision of the company or the
committee, as the case may be, or designated individual upon the application
shall be rendered in writing within a reasonable period of time after receipt
of the application. The written decision shall set forth in a manner
calculated to be understood by the applicant: (i) the decision and the specific
reason for the decision; (ii) specific reference to the plan provisions on
which the decision is based; (iii) a description of additional material,
information or acts, if any, pertinent to the decision and which may change or
modify the decision, together with an explanation of the same; and (iv) an
explanation of the procedure for further review of the decision. Within 60
days of receipt of the written decision, the individual filing the original
application, or the individual's duly authorized representative, may, by
written application, request a redetermination by the company or the committee,
as the case may be. Pursuant to the written application, the applicant or the
duly authorized representative may review all pertinent documents and may
submit issues, comments and arguments in writing. Within 60 days of receipt of
an application for redetermination (unless special circumstances required a
longer period of time, in which case within a reasonable period of time, but
not longer than 120 days after receipt of the application), the company or the
committee, as
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the case may be, shall provide the person filing the application for
redetermination with its final decision written in a manner calculated to be
understood by the person filing the application for redetermination, setting
forth specific reasons for the decision with specific reference to plan
provisions on which the decision is based.
9.10. Decisions Final. Subject to applicable law, any
interpretation of the provisions of the plan (including factual determinations
thereunder) and any decisions on any matter within the discretion of the
company or the committee, as the case may be, made by the company or the
committee, as the case may be, in good faith shall be binding on all persons.
A misstatement or other mistake of fact shall be corrected when it becomes
known and the company or the committee, as the case may be, shall make such
adjustment on account thereof as it considers equitable and practicable.
9.11. Indemnification. The company shall indemnify and hold
harmless each of its employees or agents to whom responsibilities for the
operation and administration of this plan have been delegated against any and
all claims, loss, damages, expense and liability arising from any action or
failure to act, except when the same is judicially determined to be due to
gross negligence or willful misconduct of such person. The company may choose,
at its own expense and discretion, to purchase and keep in effect liability
insurance for each such
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person to cover a part or all of any such claims, loss, damage, expense and
liability.
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SECTION 10
General Provisions
10.1. Additional Employers. Any subsidiary or affiliate of
the company may adopt the plan and become a party to the trust agreement by
filing with the company a written instrument (approved by the company) to that
effect which specifies the group or class of employees to which the plan has
been extended.
10.2. Action by Employers. Any action required or permitted
to be taken by an employer under the plan shall be by resolution of its Board
of Directors, by resolution of a duly authorized committee of its Board of
Directors, or by a person or persons authorized by resolution of its Board of
Directors or such committee.
10.3. Waiver of Notice. Any notice required under the plan
may be waived by the person entitled to such notice.
10.4. Gender and Number. Where the context admits, words in
the masculine gender shall include the feminine and neuter genders, the
singular shall include the plural, and the plural shall include the singular.
10.5. Controlling Law. Except to the extent superseded by
laws of the United States, the laws of Delaware shall be controlling in all
matters relating to the plan.
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10.6. Employment Rights. The plan does not constitute a
contract of employment, and participation in the plan will not give any
employee the right to be retained in the employ of an employer, nor any right
or claim to any benefit under the plan, unless such right or claim has
specifically accrued under the terms of the plan.
10.7. Litigation by Participants. If a legal action begun
against the trustee, an employer, the company or the committee or any member
thereof by or on behalf of any person results adversely to that person, or if a
legal action arises because of conflicting claims to a participant's or other
person's benefits, the cost to the trustee, the employers the company or the
committee or any member thereof of defending the action will be charged to the
extent permitted by law to the sums, if any, which were involved in the action
or were payable to the person concerned.
10.8. Interests Not Transferable. The interests of persons
entitled to benefits under the plan are not subject to their debts or other
obligations and, except as may be required by the tax withholding provisions of
the Code or any state's income tax act or pursuant to a qualified domestic
relations order as defined in Section 414(p) of the Code, may not be
voluntarily or involuntarily sold, transferred, alienated, assigned or
encumbered.
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10.9. Absence of Guaranty. Neither the company nor the
employers in any way guarantee the trust fund from loss or depreciation. The
liability of the trustee or the company to make any payment under the plan will
be limited to the assets held by the trustee which are available for that
purpose.
10.10. Evidence. Evidence required of anyone under the plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
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SECTION 11
Amendment and Termination
11.1. Amendment. While the employers expect and intend to
continue the plan, the company reserves the right to amend the plan from time
to time, except as follows:
(a) The duties and liabilities of the committee cannot be
changed substantially without its consent;
(b) No amendment shall reduce the value of a
participant's benefits to less than the amount he
would be entitled to receive if he had resigned from
the employ of all of the employers on the date of the
amendment (subject to subsequent investment
experience); and
(c) Except as provided in subsection 3.8, under no
condition shall an amendment result in the return or
repayment to any employer of any part of the trust
fund or the income from it or result in the
distribution of the trust fund for the benefit of
anyone other than persons entitled to benefits under
the plan.
11.2. Termination. The plan will terminate as to all
employers on any date specified by the company if thirty days' advance written
notice of the termination is given to the company, the trustees and the other
employers. The plan will terminate as to an individual employer on the first
to occur of the following:
(a) The date it is terminated by that employer if 30
days' advance written notice of the termination is
given to the company, the trustees and the other
employers.
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(b) The date that employer is judicially declared
bankrupt or insolvent.
(c) The date required by ERISA or the Code.
11.3. Vesting and Distribution on Termination. On
termination or partial termination of the plan, the date of termination will be
a "valuation date" and, after all adjustments then required have been made,
each affected participant's benefits will be nonforfeitable and will be
distributable to the participant or the participant's beneficiary in accordance
with the provisions of Section 6.
11.4. Notice of Amendment or Termination. Participants will
be notified of an amendment or termination of the plan within a reasonable
time.
11.5. Plan Merger, Consolidation, etc. In the case of any
merger or consolidation with, or transfer of assets or liabilities to, any
other plan, each participant's benefits if the plan terminated immediately
after such merger, consolidation or transfer shall be equal to or greater than
the benefits he would have been entitled to receive if the plan had terminated
immediately before the merger, consolidation or transfer.
11.6. Discontinuance of Contributions. If an employer
determines that it is no longer possible or desirable to make contributions to
the trust, it may take appropriate action to permanently discontinue further
contributions without termi-
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nating the trust. Thereafter, the company and the committee shall continue to
administer the plan and trust in accordance with the provisions hereof, except
the provisions relating to such employer's contributions, and the plan and
trust shall remain in force.
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SUPPLEMENT A
Special Rules for Top-Heavy Plans
A-1. Purpose and Effect. The purpose of this Supplement A is
to comply with the requirements of Section 416 of the Code. The provisions of
this Supplement A shall be effective for each plan year in which the plan is a
"top-heavy plan" within the meaning of Section 416(g) of the Code.
A-2. Top-Heavy Plan. In general, the plan will be a
top-heavy plan for any plan year beginning after December 31, 1983 if, as of
the last day of the preceding plan year (the "determination date"), the
aggregate account balances of participants who are key employees (as defined in
Section 416(i) (1) of the Code) exceed 60 percent of the aggregate account
balances of all participants. In making the foregoing determination, the
following special rules shall apply:
(a) A participant's account balances shall be increased
by the aggregate distributions, if any, made with
respect to the participant during the 5-year period
ending on the determination date.
(b) The account balances of a participant who was
previously a key employee, but who is no longer a key
employee, shall be disregarded.
(c) The accounts of a beneficiary of a participant shall
be considered accounts of the participant.
(d) The account balances of a participant who did not
perform any services for an employer during the
5-year period ending on the determination date shall
be disregarded.
A-3. Key Employee. In general, a "key employee" is an
employee who, at any time during the 5-year period ending on the determination
date, is:
(a) an officer of an employer receiving annual
compensation greater than 50% of the limitation in
effect under Section 415(b)(1)(A) of the Code;
provided, that for purposes of this subparagraph (a),
no more than 50 employees of the employers (or if
lesser,
A-1
<PAGE> 75
the greater of 3 employees or 10 percent of the
employees) shall be treated as officers;
(b) one of the ten employees receiving annual
compensation from the employers of more than the
limitation in effect under Section 415(c)(1)(A) of
the Code and owning both more than a 1/2 percent
interest and the largest interests in the employers;
(c) a 5 percent owner of an employer; or
(d) a 1 percent owner of an employer receiving annual
compensation from the employers of more than $150,000.
A-4. Minimum Vesting. For any plan year in which the plan is
a top-heavy plan, a participant's vested percentage in his matching
contribution account shall not be less than the percentage determined under the
following table:
Years of Service Vested Percentage
---------------- -----------------
Less than 2 0
2 20
3 40
4 60
5 80
6 or more 100
If the foregoing provisions of this paragraph A-4 become effective, and the
plan subsequently ceases to be a top-heavy plan, each participant who has then
completed three or more years of service may elect to continue to have the
vested percentage of his matching contribution account determined under the
provisions of this paragraph A-4.
A-5. Minimum Employer Contribution. For any plan year in
which the plan is a top-heavy plan, the matching contribution, if any, credited
to each participant who is not a key employee shall not be less than 3 percent
of such participant's compensation for that year. In no event, however, shall
the matching contribution credited in any year to a participant who is not a
key employee exceed the maximum matching contribution credited in that year to
a key employee (expressed as a percentage of such key employee's compensation
up to $200,000 (or such other amount as may be determined by the Commissioner
of Internal Revenue for that year)).
A-2
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A-6. Maximum Earnings. For any plan year in which the plan
is a top-heavy plan, a participant's earnings in excess of $200,000 (or such
other amount as may be determined by the Commissioner of Internal Revenue for
that plan year) shall be disregarded for purposes of subsection 6.5 of the
plan.
A-7. Aggregation of Plans. In accordance with Section
416(g)(2) of the Code, other plans maintained by the employers may be required
or permitted to be aggregated with this plan for purposes of determining
whether the plan is a top-heavy plan.
A-8. No Duplication of Benefits. If the employers maintain
more than one plan, the minimum employer contribution otherwise required under
paragraph A-5 above may be reduced in accordance with regulations of the
Secretary of the Treasury to prevent inappropriate duplication of minimum
contributions or benefits.
A-9. Adjustment of Combined Benefit Limitations. For any
plan year in which the plan is a top-heavy plan, the determination of the
defined contribution plan fraction and defined benefit plan fraction under
subsection 6.11 of the plan shall be adjusted in accordance with the provisions
of Section 416(h) of the Code.
A-10. Use of Terms. All terms and provisions of the plan
shall apply to this Supplement A, except that where the terms and provisions of
the plan and this Supplement A conflict, the terms and provisions of this
Supplement A shall govern.
A-3
<PAGE> 77
Exhibit A
Covered Groups under the
Playtex Apparel, Inc.
Employees' 401(k) Retirement Plan
(As Amended and Restated Effective January 1, 1993)
Employees of the following employers who have adopted the
Playtex Apparel, Inc. Employees' 401(k) Retirement Plan shall, unless otherwise
noted, be members of the covered group as of January 1, 1993:
Playtex Apparel, Inc. - Persons employed by Playtex Apparel, Inc. on
a full-time hourly basis in Dover,
Delaware. The covered group shall not
include persons who are: (i) paid on a salary
basis; (ii) in the field sales force; (iii)
independent contractors; or (iv) covered
under a collective bargaining agreement
unless such agreement provides for
participation in this plan. An employee
shall be considered "full-time" if such
employee is regularly scheduled to work at
least 35 hours in each week during the year,
or if such employee completes 1,000 hours of
service in the twelve month period beginning
on such employee's date of hire (or any
subsequent twelve month period beginning on
the anniversary of such date).
Playtex Apparel, Inc.
JBI Division - Any person employed by Playtex Apparel,
Inc. in its JBI Division, but excluding any
independent contractor.
<PAGE> 1
EXHIBIT 4.10
PLAYTEX APPAREL RETIREMENT SAVINGS PLAN
FOR HOURLY PUERTO RICAN EMPLOYEES
McDermott, Will & Emery
Chicago
<PAGE> 2
ADOPTION
OF
PLAYTEX APPAREL RETIREMENT SAVINGS PLAN
FOR HOURLY PUERTO RICAN EMPLOYEES
Pursuant to resolutions adopted by the Board of Directors of Playtex
Apparel, Inc. (the "corporation") on June 24, 1993, the officers of the
corporation hereby adopt PLAYTEX APPAREL RETIREMENT SAVINGS PLAN FOR HOURLY
PUERTO RICAN EMPLOYEES, effective as of July 1, 1993, on behalf of the
corporation in the form attached hereto.
Dated this 25th day of April, 1994.
PLAYTEX APPAREL, INC.
By /s/ W.S. Lipsman
Its Vice President
ATTEST
/s/ James C. Clausarif
Its Asst Secretary
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1 1
Introduction 1
Purpose 1
Effective Date, Plan Year; Plan Year Quarter 1
Funding of Benefits 1
Administration of the Plan 2
Employers 2
Plan Supplements 3
SECTION 2 4
Eligibility and Participation 4
Eligibility 4
Credited Service 4
Restricted Participation 6
Reemployment 7
Settlement Date 8
Controlled Group Member 9
Leased Employees 9
Leave of Absence 10
SECTION 3 11
Pre-Tax Compensation Deferral Contributions 11
Election to Make and Deduction of Pre-tax Com-
pensation Deferral Contributions 11
Variation, Discontinuance and Resumption of
Pre-tax Compensation Deferral
Contributions 11
Nonforfeitability of Pre-tax Compensation
Deferral Contributions 12
Compensation 13
SECTION 4 14
After-Tax Voluntary Contributions 14
After-Tax Voluntary Contributions 14
SECTION 5 15
Employer Contributions 15
Employer Contribution of Pre-tax Compensation
Deferral Contributions 15
Employer Match Contributions 15
Contribution Requirements 16
Verification of Contributions 16
No Interest in Employers 17
SECTION 6 18
Accounting 18
Separate Accounts 18
Accounting Dates 19
General Accounting Rules 19
</TABLE>
-i-
<PAGE> 4
<TABLE>
<S> <C>
Employer Contributions Considered Made on Last Day of
Plan Year Quarter 19
Charging Withdrawals and Distributions 19
Crediting of Pre-tax Compensation Deferral Con-
tributions 20
Crediting of Employer Match Contributions 20
Account Adjustments 20
Statement of Account 22
Rollover Contributions 23
Direct Transfer of Eligible Rollover
Distributions 24
SECTION 7 26
Limitations Under the Internal Revenue Code 26
Contribution Limitations 26
Combined Benefit Limitations 27
Controlled Group Member 27
Limitations on Pre-tax Compensation Deferral
Contributions 27
Higher Compensated Eligible Employee 28
Contribution Adjustments 30
Dollar Limitation on Pre-Tax Contributions 31
Distribution of Excess Deferrals 32
Special Family Aggregation Rules 33
Allocation of Earnings to Distributions of
Excess Deferrals and Excess Contributions 34
Multiple Use of Alternative Limitation 35
SECTION 8 37
Limitations Under the Puerto Rico Income Tax Act 37
ITA Dollar Limitation on Pre-Tax Contributions 37
Distribution of Excess ITA Deferrals 37
Limitations on Pre-Tax Compensation Deferral
Contributions 38
Contribution Adjustments 39
Distribution of Excess ITA Savings 40
Higher Compensated Eligible Employee Under ITA 40
SECTION 9 41
Payment of Account Balances 41
Payment at Settlement Date 41
Spouse as Beneficiary 41
Commencement of Distributions 42
Designation of Beneficiary 44
Missing Participants or Beneficiaries 46
Facility of Payment 47
SECTION 10 48
Withdrawals 48
Hardship Withdrawals 48
Pre-Termination Distribution 50
</TABLE>
-ii-
<PAGE> 5
<TABLE>
<S> <C>
Number, Manner and Distribution of Withdrawals 51
Nonforfeiture Provision 52
SECTION 11 53
The Trust Fund and Investment of Trust Assets 53
The Trust Fund 53
The Investment Funds 53
Investment Elections 54
Change in Investment Elections 55
Elections to Reallocate Balances Between
Accounts 55
Elections After Retirement or Other Termination of
Employment 56
Voting of Sara Lee Stock; Tender Offers 56
SECTION 12 58
Administration 58
Membership 58
Committee's General Powers, Rights and Duties 58
Manner of Action 59
Interested Committee Member 60
Resignation or Removal of Committee Members 60
Committee Expenses 61
Information Required by Company or Committee 61
Uniform Rules 62
Claims Procedure 62
Decisions Final 63
SECTION 13 65
General Provisions 65
Additional Employers 65
Action by Employers 65
Waiver of Notice 65
Gender and Number 65
Controlling Law 65
Employment Rights 66
Litigation by Participants 66
Interests Not Transferable 66
Absence of Guaranty 67
Evidence 67
Domestic Relations Orders 67
SECTION 14 69
Amendment and Termination 69
Amendment 69
Termination 69
Vesting and Distribution on Termination 70
Notice of Amendment or Termination 71
Plan Merger, Consolidation, Etc. 71
SUPPLEMENT A
</TABLE>
-iii-
<PAGE> 6
PLAYTEX APPAREL
RETIREMENT SAVINGS PLAN FOR HOURLY PUERTO RICAN EMPLOYEES
SECTION 1
Introduction
1.1. Purpose. Effective as of July 1, 1993, Playtex Apparel,
Inc. (the "company") establishes a retirement savings plan for its eligible
hourly employees in Puerto Rico. The plan includes a salary reduction
arrangement intended to meet the requirements of a qualified cash or deferred
arrangement under Section 401(k) of the Internal Revenue Code of 1986, as
amended (the "Code") and Section 165 of the Puerto Rico Income Tax Act
(the "ITA").
1.2. Effective Date, Plan Year; Plan Year Quarter. The
effective date of the plan as set forth herein is July 1, 1993. A "plan year"
is the 12-month period beginning each July 1 and ending on the next following
June 30. A "plan year quarter" is each three month period beginning on July 1,
October 1, January 1 and April 1.
1.3. Funding of Benefits. Funds contributed under the plan
will be held and invested, until distribution, by one or more trustees (the
"trustee") appointed by the company, in accordance with the terms of a trust
agreement between the company and the trustee which implements and forms a
part of the plan. Participants will be notified of the identity of the
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trustee, and of any change in trustee. Copies of the plan and trust agreement,
and any amendments thereto, will be on file at the office of the Secretary of
the company where they may be examined by any participant or other person
entitled to benefits under the plan. The provisions of and benefits under the
plan are subject to the terms and provisions of the trust agreement.
1.4. Administration of the Plan. The plan is administered by
the company. The company may from time to time adopt such rules and
regulations as may be necessary or desirable for the proper and efficient
administration of the plan and as are consistent with the terms of the plan.
The company also, from time to time, may appoint such individuals to act as the
company's representatives as the company considers necessary or desirable for
the efficient administration of the plan. Any notice or document required to
be given to or filed with the company will be properly given or filed if
delivered or mailed, by registered mail, postage prepaid, to the company in
care of Sara Lee Corporation, at Three First National Plaza, Chicago, Illinois
60602-4260.
1.5. Employers. For purposes of the plan, the term
"employer" shall mean the company and any subsidiary of Sara Lee Corporation
that adopts the plan with the company's written consent, as described in
subsection 13.1. A "subsidiary" of Sara Lee Corporation means any corporation
more than 50 percent
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of the voting stock or 80 percent or more of the total value of all classes of
stock of which is owned, directly or indirectly, by Sara Lee Corporation.
1.6. Plan Supplements. The provisions of the plan may be
modified by supplements to the plan. The terms and provisions of each
supplement are a part of the plan and supersede the provisions of the plan to
the extent necessary to eliminate inconsistencies between the plan and the
supplement.
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SECTION 2
Eligibility and Participation
2.1. Eligibility. Each employee of an employer will be
eligible to join the plan and become a participant on July 1, 1993 or on the
first day of the first pay period of the plan year quarter occurring on or
after he meets all of the following requirements:
(a) He has completed 12 months of credited service (as
defined below);
(b) He is not a member of a group or unit of employees
covered by a collective bargaining agreement except
and to the extent such agreement provides for the
inclusion of such group or unit of employees under
the plan provided retirement benefits were the
subject of good faith bargaining between the employer
and the bargaining representative of such group or
unit; and
(c) He is employed by an employer in Puerto Rico on an
hourly basis.
2.2. Credited Service. An employee's "credited service"
shall mean the number of completed calendar years and months during his periods
of service. A period of service shall mean a period beginning on the date an
employee enters service (or reenters service) and ending on the termination
date (as defined below) with respect to such period, subject to the following
special rules:
(a) An employee shall be deemed to enter service on the
date he first completes an hour of service. An "hour
of service" means an hour for which the employee is
paid or entitled to payment by an employer or
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controlled group member for the performance of duties, and for reasons
other than the performance of duties, for the employer or controlled
group member. The rules for crediting hours of service set forth in
paragraphs (b) and (c) of Section 2530.200b-2 of Department of Labor
regulations are incorporated by reference.
(b) An employee shall be deemed to reenter service on the
date following a termination date when he again
completes an hour of service as provided in 2.2(a)
above.
(c) The termination date of an employee shall be the
earlier of (i) the date he quits, is discharged,
retires or dies, or (ii) except as provided below,
the first anniversary of the date he is absent from
service for any other reason (including but not
limited to vacation, holiday, leave of absence, and
layoff). If an employee, absent from service under
circumstances described in (ii), quits, is
discharged, retires or dies before the first
anniversary of commencement of said absence his
termination date shall be the date he quits, is
discharged, retires or dies. An absence described in
(ii) shall be deemed to commence with respect to an
employee on the date he is terminated as an employee
on the payroll records of the employers and
controlled group members. An employee shall be
deemed to have continued in service (and thus not to
have incurred a termination date) for the following
periods:
(i) Any period for which he shall be required to
be given credit for service under any laws of
the United States or any governing laws of
Puerto Rico; and
(ii) The period (referred to herein as "medical
leave") prior to his normal retirement date
during which he shall be unable, by reason of
physical or mental infirmity, or both, to
perform satisfactorily the duties then
assigned to him or which an
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employer or controlled group member is
willing to assign to him, as determined by
the company pursuant to a medical examination
by a medical doctor selected or approved by
the company. Such period shall end with the
earlier of the date of his death, his normal
retirement date (or the date he shall
actually retire, if later), or the date of
cessation of such inability.
(d) All periods of service of an employee shall be
aggregated in determining his credited service, and
in aggregating fractional years thirty days shall be
deemed to constitute a completed month.
(e) If an employee shall be absent from work because he
quits, is discharged or retires, and he reenters
service before the first anniversary of the date of
such absence, such date shall not constitute a
termination date and the period of such absence shall
be included as service.
2.3. Restricted Participation. When payment of all of a
participant's account balances is not made at his settlement date, or if a
participant transfers to the employ of a controlled group member which is not
an employer or continues in the employ of an employer but ceases to be an
eligible employee, the participant or his beneficiary will continue to be
considered as a participant for all purposes of the plan, except as follows:
(a) No employer contributions will be made for any period
beginning after his settlement date occurs, except as
provided in subsection 5.1, or for any subsequent
plan year unless he is reemployed and again becomes a
participant in the plan.
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(b) No employer contributions will be made for any period
in which he is in the employ of an employer but is
not an eligible employee.
(c) No employer contributions will be made for any period
in which he is employed by a controlled group member
which is not an employer under the plan.
(d) A participant whose settlement date occurs cannot
make investment elections under Section 11 as of
April 1 of the calendar year following the calendar
year in which his settlement date occurs.
(e) The beneficiary of a deceased participant cannot name
a beneficiary under subsection 9.4.
2.4. Reemployment. If a former eligible employee or
participant reenters service with an employer, and he meets the requirements of
subsection 2.1, he shall again become a participant as of the date he reenters
service, and may make a pre-tax compensation deferral contribution election
pursuant to subsection 3.1 effective for the first pay period beginning after
the last day of the plan year quarter in which he reenters service. If a
former employee, who has not been an eligible employee or participant, reenters
service with an employer, credited service he had accrued prior to his
termination of employment will be reinstated for purposes of determining his
eligibility to participate in the plan and he shall become a participant in the
plan on the first day of the first plan year quarter occurring on or after he
meets the requirements of subsection 2.1.
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2.5. Settlement Date. A participant's "settlement date" will
be the last day of the plan year quarter in which his employment with all the
employers and controlled group members is terminated because of the first to
occur of the following:
(a) Normal or Late Retirement. The date of the
participant's retirement on or after attaining age 65
years (his "normal retirement age"). A participant's
right to his account balances shall be nonforfeitable
on and after his normal retirement age.
(b) Early Retirement. The date of the participant's
retirement on or after attaining age 55 years and
completing 10 years of credited service but before
attaining age 65 years.
(c) Death. The date of the participant's death.
(d) Resignation or Dismissal. The date the participant
resigns or is dismissed from the employ of all of the
employers before he attains age 55 years and
completes 10 years of credited service.
(e) Total Disability Retirement. The date the
participant becomes totally disabled. Totally
disabled means that condition of the participant
resulting from injury or illness which:
(i) results in such participant's entitlement
to and receipt of monthly disability
insurance benefits under the Federal Social
Security Act;
(ii) results in such participant's entitlement
to and receipt of (or would result in
receipt of but for any applicable benefit
waiting period) disability income benefits
under a disability income plan maintained
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or adopted by such participant's employer;
or
(iii) is determined by the company, in its sole
discretion, to prevent such participant
during the first 180 days of any period of
absence on account of such disability and
during the 24 month period thereafter from
performing each and all of the duties of
such participant's occupation with the
employer and following such 24 month period
to prevent such participant from performing
each and every occupation for wage or
profit for which such participant is
reasonably qualified by education, training
or experience.
2.6. Controlled Group Member. A "controlled group member"
means:
(a) any corporation which is not an employer but is a
member of a controlled group of corporations (within
the meaning of Section 1563(a) of the Code,
determined without regard to Sections 1563(a)(4) and
1563(e)(3)(C) thereof) which contains an employer;
and
(b) any trade or business (whether or not incorporated)
which is under common control with an employer
(within the meaning of Section 414(c) of the Code).
2.7. Leased Employees. A leased employee (as defined below)
shall not be eligible to participate in the plan. A "leased employee" means
any person who is not an employee of an employer, but who has provided services
to an employer of a type which have historically (within the business field of
the employers) been provided by employees, on a
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substantially full-time basis for a period of at least one year, pursuant to an
agreement between an employer and a leasing organization. If the leased
employee is hired as a common-law employee of an employer, the period during
which a leased employee performs services for an employer shall be taken into
account for purposes of subsection 2.1 of the plan; unless (i) such leased
employee is a participant in a money purchase pension plan maintained by the
leasing organization which provides a non-integrated employer contribution rate
of at least 10 percent of compensation, immediate participation for all
employees and full and immediate vesting, and (ii) leased employees do not
constitute more than 20 percent of the employers' nonhigher compensated
workforce.
2.8. Leave of Absence. A leave of absence will not interrupt
continuity of participation in the plan. A "leave of absence" for plan
purposes means an absence from work which is not treated by the participant's
employer as a termination of employment or which is required by law to be
treated as a leave of absence. Leaves of absence will be granted under the
employer's rules applied uniformly to all participants similarly situated.
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SECTION 3
Pre-Tax Compensation Deferral Contributions
3.1. Election to Make and Deduction of Pre-tax Compensation
Deferral Contributions. Subject to the limitations of the plan, each
participant may defer payment of a percentage (in multiples of one percent not
less than one (1) percent nor more than ten (10) percent) of his compensation
(as defined in subsection 3.4) by electing to have such percentage withheld
from his compensation on a pre-tax basis and contributed to the plan on his
behalf by his employer. Each election by a participant under this subsection
shall be in the form of a salary reduction agreement filed with the company in
such manner and at such time as the company determines. Each such election
shall be effective with respect to compensation paid for the first pay period
ending after the effective date or the first pay period for which such election
is effective. An election hereunder shall continue in effect until modified or
revoked by the participant, or until such time as the participant no longer
satisfies the eligibility requirements of subsection 2.1. Pre-tax compensation
deferral contributions shall be made by regular payroll deduction or in any
other manner approved by the company on a pre-tax basis and will be paid to the
trustee by the employer as provided in subsection 5.1.
3.2. Variation, Discontinuance and Resumption of Pre-tax
Compensation Deferral Contributions. Each participant
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who has made an election for any plan year pursuant to subsection 3.1 may
subsequently make an election to discontinue the deferral of his compensation
(but not retroactively) at the beginning of any pay period. A participant also
may elect to change the rate of his pre-tax compensation deferral contributions
(but not retroactively) as of the beginning of the pay period coincident with
or next following the first day of any plan year quarter within the limits
specified in subsection 3.1. If a participant discontinues his pre-tax
compensation deferral contributions he may not subsequently elect under
subsection 3.1 to have such contributions resumed until the beginning of the
pay period coincident with or next following the first day of the next
following plan year quarter. Each election by a participant under this
subsection and under subsection 3.1 must be filed with the company in such
manner and at such time as the company shall determine and shall be effective
with respect to compensation paid for the first pay period ending after the
date on which such election is effective.
3.3. Nonforfeitability of Pre-tax Compensation Deferral
Contributions. Subject to the provisions of subsection 5.3, all pre-tax
compensation deferral contributions made in accordance with subsections 3.1 and
5.1 (as adjusted for investment experience under the plan) shall at all times
be fully vested and nonforfeitable.
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3.4. Compensation. The term "compensation" means the total
wages (as defined in Section 3401(a) of the Code) paid to an individual for the
period in question for services rendered as an employee of a controlled group
member which are subject to income tax withholding at the source, determined
without regard to any exceptions to the withholding rules that limit the
remuneration included in such wages and that are based on the nature or
location of the employment or the services performed. Except for purposes of
applying the limitations on annual additions set forth in subsection 7.1 of the
plan, or for applying the special rules for top-heavy plans described in
Supplement A, an employee's compensation under the plan shall also include all
elective contributions made on behalf of the employee pursuant to the
employee's salary reduction agreement under Sections 401(k) and 125 of the Code
and Section 165 of the ITA. The term "compensation" shall not include
compensation in excess of $235,840 for the plan year beginning in 1993, and
$150,000 for subsequent plan years (as adjusted from time to time pursuant to
Section 401(a)(17) of the Code). For purposes of applying this limitation on
compensation, the rules of Section 414(q)(6) of the Code shall apply except
that, in applying such rules, the term "family" shall include only the spouse
of the employee and any lineal descendants of the employee who have not yet
attained age 19 before the close of the plan year.
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SECTION 4
After-Tax Voluntary Contributions
4.1. After-Tax Voluntary Contributions. No voluntary
after-tax contributions will be required or permitted under the plan.
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SECTION 5
Employer Contributions
5.1. Employer Contribution of Pre-tax Compensation Deferral
Contributions. Subject to the limitations of the plan, for each plan year
quarter, the employer will contribute on behalf of each participant the amount
of pre-tax compensation deferral contributions, if any, such participant has
directed to have withheld from his compensation as provided in subsection 3.1.
Such pre-tax compensation deferral contributions shall be paid to the trustee
as soon as practicable after being withheld but, in any event, no later than 30
days after the last day of the plan year quarter for which such amounts are
withheld.
5.2. Employer Match Contributions. The employer will
contribute an "employer match contribution" on behalf of each participant who
is employed by the employer as of the last day of the plan year quarter to
which such contributions relate in an amount equal to 20 percent of that
portion of such contribution which is not in excess of 5 percent of the
participant's compensation. Employer match contributions made in accordance
with this subsection shall be paid to the trustee as soon as practicable, but
in no event later than 30 days after the last day of the plan year quarter to
which such contributions relate. Employer match contributions made in
accordance with this subsection shall be invested in the Interest
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Income Fund (as defined in paragraph 11.2(a)) until such time as the
participant may elect to reallocate such amounts pursuant to subsection 11.5.
The limitations of subsection 7.4 shall be applied to this subsection 5.2 by
substituting "employer match contributions" for "pre-tax compensation deferral
contributions" where the latter appears in subsection 7.4. If the limitations
of subsection 7.4 are exceeded as applied to employer match contributions, such
contributions to be made on behalf of higher compensated eligible employees
shall be reduced to the extent necessary to satisfy such limitations.
5.3. Contribution Requirements. Pre-tax compensation
deferral contributions and employer match contributions are conditioned on
their deductibility under Section 404 of the Code, shall comply with the
contribution limitations set forth in Sections 7 and 8 and, unless an employer
specifies otherwise, shall not exceed an amount equal to the maximum amount
deductible on account thereof by the employer for that fiscal year for purposes
of U.S. federal taxes on income.
5.4. Verification of Contributions. If for any reason an
employer decides to verify the correctness of any amount or calculation
relating to participants' pre-tax compensation deferral contributions or
employer match contributions for any plan year, the certificate of an
independent accountant
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selected by the employer as to the correctness of any such amount or
calculation shall be conclusive on all persons.
5.5. No Interest in Employers. The employers shall have no
right, title or interest in the trust fund, nor shall any part of the trust
fund revert or be repaid to the employers, directly or indirectly, unless:
(a) a contribution is made by an employer by mistake of
fact and such contribution is returned to the
employer within one year after payment to the
trustee;
(b) a contribution conditioned on the deductibility
thereof is disallowed as an expense for federal
income tax purposes and such contribution (to the
extent disallowed) is returned to the employer within
one year after the disallowance of the deduction; or
(c) the Internal Revenue Service initially determines
that the plan does not meet the requirements of
Section 401(a) of the Code, in which event the assets
of the trust fund attributable to the contributions
made to the plan by the employer with respect to whom
such determination is made shall be returned to such
employer.
The amount of any contribution that may be returned to an employer pursuant to
subparagraph (a) or (b) above shall be reduced by any portion thereof
previously distributed from the trust fund and by any losses of the trust fund
allocable thereto, and in no event may the return of such contribution cause
any participant's account balances to be less than the amount of such balances
had the contribution not been made under the plan.
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SECTION 6
Accounting
6.1. Separate Accounts. The company will maintain on behalf
of each participant the following accounts, as may be appropriate:
(a) An "employee pre-tax account" to reflect the pre-tax
compensation deferral contributions, if any, made
under the plan pursuant to subsections 3.1 and 5.1
and the earnings, losses, appreciation and
depreciation attributable thereto.
(b) An "employer match account" to reflect the employer
match contributions made under the plan pursuant to
subsection 5.2 and the earnings, losses, appreciation
and depreciation attributable thereto.
(c) A "rollover account" to reflect any rollover
contribution made to the plan by or on behalf of a
participant pursuant to subsection 6.13 and the
earnings, losses, appreciation and depreciation
attributable thereto.
A "subaccount" shall be established and maintained under each participant
account reflecting amounts to be invested in each investment fund as provided
in subsection 6.9. The company also may maintain such other accounts in the
names of participants or otherwise as it considers advisable. Unless the
context indicates otherwise, references in the plan to a participant's
"accounts" means all such accounts and subaccounts maintained in his name under
the plan.
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6.2. Accounting Dates. A "regular accounting date" is the
last day of any plan year quarter. A "special accounting date" is any date
designated as such by the company and a special accounting date occurring under
subsection 14.3. The term "accounting date" includes both a regular accounting
date and a special accounting date.
6.3. General Accounting Rules. The accounts of participants
shall be adjusted as of each accounting date to reflect pre-tax compensation
deferral contributions, employee matching contributions, trust income or losses
and appreciation or depreciation with respect to the investment of amounts
under the plan, and withdrawals or other distributions from such accounts.
6.4. Employer Contributions Considered Made on Last Day of
Plan Year Quarter. For purposes of this Section 6, employer contributions for
any plan year quarter will be considered to have been made on the last day of
that plan year quarter, regardless of when paid to the trustee.
6.5. Charging Withdrawals and Distributions. As of each
accounting date, all withdrawals and distributions made under the plan during
the plan year quarter ending on that accounting date to or for the benefit of a
participant or the participant's beneficiary shall be charged to the proper
accounts of such participant in accordance with subsection 6.8.
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<PAGE> 25
All withdrawals shall be paid in cash, with the exception of withdrawals made
pursuant to subsection 10.2 of amounts invested in the Sara Lee Corporation
Common Stock Fund, which amounts may be withdrawn in cash or in shares at the
election of the participant. Withdrawals shall be charged against a
participant's accounts in the following sequence:
(a) First, from his rollover account,
(b) Next, from his employee pre-tax account, and
(c) Finally, from his employer match account.
6.6. Crediting of Pre-tax Compensation Deferral Con-
tributions. As of each accounting date, pre-tax compensation deferral
contributions made for the plan year quarter ending on that accounting date
shall be credited to the employee pre-tax account of each participant in
accordance with subsection 6.8.
6.7. Crediting of Employer Match Contributions. As of each
accounting date, the employer match contributions made on behalf of each
participant entitled to an employer match contribution for the plan year
quarter ending on that accounting date in accordance with subsection 5.2 shall
be credited to the participant's employer match account in accordance with
subsection 6.8.
6.8. Account Adjustments. As of each accounting date, the
company shall adjust participant accounts as follows:
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(a) First, charge to the proper accounts 1/2 of all
prepaid payments or hardship withdrawals made since
the last preceding accounting date and before the
current accounting date that have not been charged
previously, and adjust the subaccounts under such
accounts accordingly;
(b) Next, credit the balances in the employee pre-tax
accounts of all participants with 1/2 of the pre-tax
compensation deferral contributions and made on their
behalf for the accounting period ending on that
accounting date, and adjust the subaccounts under
such accounts accordingly;
(c) Next, credit participants' employer match accounts
and subaccounts thereunder with 1/2 of the employer
match contributions for the plan year quarter ending
on that accounting date that are to be credited as of
that date in accordance with subsections 5.2 and 6.7;
(d) Next, adjust the credit balances of all participants
invested in each investment fund upward or downward,
pro rata, to reflect the appreciation, depreciation,
income or losses attributable to the investment fund
so that the total of the credit balances will equal
the then adjusted net worth (as defined below) of
that investment fund;
(e) Next, charge to the proper accounts and subaccounts
the remaining 1/2 of all prepaid payments and
withdrawals made since the last preceding accounting
date and before the current accounting date that have
not been charged previously;
(f) Next, credit the employee pre-tax accounts and
subaccounts thereunder with the remaining 1/2 of the
pre-tax compensation deferral contributions made on
the participants' behalf for the accounting period
ending on that accounting date;
(g) Next, credit participants' employer match accounts
and subaccounts thereunder with the remaining 1/2 of
the employer match
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contributions for the plan year quarter ending on
that accounting date that are to be credited as of
that date in accordance with subsections 5.2 and 6.7;
(h) Next, charge to the proper accounts and subaccounts
all payments, withdrawals or distributions which are
to be made as of the current accounting date;
(i) Finally, charge and credit the appropriate
participants' subaccounts to reflect transfers of
balances in the subaccounts between investment funds
pursuant to a participant's investment transfers made
in accordance with Section 11.
The "adjusted net worth" of an investment fund as of any accounting date means
the then net worth of that fund as determined by the trustee in accordance with
the provisions of the trust agreement, including any contributions paid to the
trustee and invested in that investment fund that are required to be credited
to participants' accounts as of that accounting date in accordance with
subparagraphs 6.8(b) and (c), but disregarding any contributions that are
required to be credited to participants' accounts as of that accounting date in
accordance with subparagraphs 6.8(f) and (g) and disregarding any payments,
withdrawals or distributions that are to be deducted in accordance with
subparagraphs 6.8(a), (e) and (h).
6.9. Statement of Account. As soon as practicable after each
accounting date, each participant whose account reflects a balance greater than
zero will be furnished with a statement reflecting the condition of his
accounts as of such
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accounting date. No participant, except one authorized by the company, shall
have the right to inspect the records reflecting the accounts of any other
participant.
6.10. Rollover Contributions. In the case of a rollover
contribution to this plan, the company in its discretion may direct the trustee
to accept:
(a) From a trustee or insurance company a direct transfer
of a participant's account balance (or portion
thereof) maintained under any other individual
account, profit sharing or stock bonus plan intended
to meet the requirements of Section 401(a) of the
Code; or
(b) From an "eligible retirement plan" as described in
Section 402(c)(8)(B) of the Code a direct rollover of
a participant's benefits constituting an "eligible
rollover distribution" as defined in Section
402(c)(4) of the Code; or
(b) From a participant as a rollover contribution an
amount (or portion thereof) received by the
participant as an eligible rollover distribution (or
an amount paid or distributed by a qualified trust as
described in Section 165(b)(2) of the ITA) from
another pension, profit sharing or stock bonus plan
intended to meet the requirements of Section 401(a)
of the Code and Section 165 of the ITA;
provided, however, that any such rollover contribution made by a participant
shall comply with the provisions of the Code and the ITA and the rules and
regulations thereunder applicable to tax-free rollovers. If, after a rollover
contribution has been made, the company learns that such contribution did not
meet those provisions, the company may direct the trustee to make a
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distribution to the participant of the entire amount of the rollover
contribution received. Any amount so transferred or contributed to the trustee
will be credited to the account of the participant as determined by the
company. For purposes of transferred amounts or rollover contributions made to
the trustee, the term "participant" shall include an employee of an employer
who is not yet a participant in the plan, but any such transferred amounts or
rollover contributions shall be held in the Interest Income Fund (as defined in
paragraph 11.2(a)), until such a participant may satisfy the requirements of
Section 2 of the plan, and such a participant may not make pre-tax compensation
deferral contributions and investment elections or apply for withdrawals before
satisfying the requirements of Section 2 of the plan. If any portion of a
participant's benefits under the plan is attributable to amounts which were
transferred to the plan, directly or indirectly, from a plan which is subject
to the requirements of Section 401(a)(11) of the Code, then the provisions of
said Section 401(a)(11) shall apply to the benefits of such participant.
6.11. Direct Transfer of Eligible Rollover Distributions. In
the case of a distribution made from the plan, the following rules shall apply:
(a) If payment of all or a portion of a participant's
benefits constitutes an eligible rollover
distribution under Section 402(c)(4) of the Internal
Revenue Code, then the participant may elect to have
such distribution paid directly to an eligible
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retirement plan described in Section 402(c)(8)(B) of
the Internal Revenue Code.
(b) Each election by a participant under this subsection
6.11 shall be made at such time and in such manner as
the company shall determine, and shall be effective
only in accordance with such rules as shall be
established from time to time by the company.
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SECTION 7
Limitations Under the Internal Revenue Code
7.1. Contribution Limitations. For each plan year, the
"annual addition" (as defined below) to a participant's accounts under the plan
and each other defined contribution plan maintained by an employer or a
controlled group member shall not exceed the lesser of $30,000 (or such greater
amount as may be determined by the Commissioner of Internal Revenue of the
United States for calendar years ending after December 31, 1987 which begin
with or within that plan year) or 25 percent of the participant's
"compensation" during that plan year. The term "annual addition" for any plan
year means the sum of the employer contributions (including for this purpose
pre-tax compensation deferral contributions and employer match contributions),
and the participant's after-tax voluntary contributions and forfeitures, if
any, credited to a participant's account for that year. Direct transfers and
rollover contributions accepted by the trustee pursuant to subsection 6.10
shall not be considered as part of any annual addition. If for any plan year
the participant's annual addition would exceed the limitation stated above, the
annual addition shall be reduced by reducing the amount of a participant's
after-tax voluntary contribution, if any, and returning such reduced amounts to
the participant and then, to extent necessary, reducing the amount of employer
contributions allocated to the
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participant and applying such amounts to reduce employer contributions in
succeeding plan years, in order of time.
7.2. Combined Benefit Limitations. If a participant in this
plan is also a participant in one or more defined benefit plans maintained by
an employer or a controlled group member, the aggregate benefits payable to, or
on account of him, under all such plans will be determined in a manner
consistent with Section 415 of the Code and Section 1106 of the Tax Reform Act
of 1986. Accordingly, there will be determined with respect to the participant
a defined contribution plan fraction and a defined benefit plan fraction in
accordance with said Sections 415 and 1106. The benefits provided for the
participant under the defined benefit plans will be adjusted to the extent
necessary so that the sum of such fractions determined with respect to the
participant does not exceed 1.0.
7.3. Controlled Group Member. In determining controlled
group members under this Section 7, the definition of controlled group member
under subsection 2.6 shall be modified as provided in Code Section 415(h).
7.4. Limitations on Pre-tax Compensation Deferral
Contributions. For any plan year the actual deferral percentage (as defined
below) of the higher compensated eligible employees (as defined in subsection
7.5) as determined on the last day of the plan year or at such other time
permitted by
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regulation issued by the Internal Revenue Service shall not exceed the greater
of:
(a) the actual deferral percentage of all other eligible
employees for such plan year multiplied by 1.25; or
(b) the actual deferral percentage of all other eligible
employees for such plan year multiplied by 2;
provided, that the actual deferral percentage of the
higher compensated eligible employees does not exceed
that of all other eligible employees by more than 2
percentage points.
The actual deferral percentage of a group of participants for a plan year means
the average of the ratios (determined separately for each participant in such
group) of A to B where A equals the pre-tax compensation deferral contributions
credited to each such participant's accounts for such plan year, and B equals
the participant's compensation for such plan year.
7.5. Higher Compensated Eligible Employee. For purposes of
the plan, a "higher compensated eligible employee" for any plan year means an
employee who:
(a) at any time during that plan year or the preceding
plan year, was a five percent owner of an employer; or
(b) during the preceding plan year -
(i) received compensation (as defined below)
from an employer in excess of $85,485 (or
such greater amount as may be determined by
the Commissioner of Internal Revenue);
(ii) received compensation from an employer in
excess of $56,990 (or such greater amount
as may
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be determined by the Commissioner of
Internal Revenue) and was among the top 20
percent of the employees of an employer
(disregarding those employees excludable
under Code Section 414(q)(8)) when ranked
on the basis of compensation paid for that
year; or
(iii) was an officer of an employer and either
(A) received compensation in excess of 50
percent of the limitation in effect under
Section 415(b)(1)(A) of the Code for that
year, provided that for this purpose, no
more than 50 employees (or, if less, the
greater of three employees or 10 percent of
the employees) shall be treated as
officers, or (B) was the highest-paid
officer of and employer for that plan year;
or
(c) during the current plan year, is both a member of the
group consisting of the 100 employees of an employer
receiving the greatest compensation for that year and
a member of the group of employees described in
subparagraph (b) above if such subparagraph (b) were
applicable to the current year.
For purposes of the foregoing, if any participant is a family member of a
higher compensated eligible employee who is either a five percent owner or one
of the ten most highly compensated employees with respect to any plan year,
that participant shall not be treated as a separate participant and
compensation will be treated as if paid to said higher compensated eligible
employee; provided, that a "family member" of a higher compensated eligible
employee means such employee's spouse, lineal
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ascendants and descendants and the spouses of such lineal ascendants and
descendants.
7.6. Contribution Adjustments. The company may determine as
of any date from the pre-tax compensation contribution elections then on file
with the company, whether the limitations prescribed under subsections 5.2 and
7.4 will be satisfied and, to the extent necessary to insure compliance with
such limitations or to insure that such contributions and any other employer
contributions are deductible under Section 404 of the Code for such year, may
reduce a participant's rate of pre-tax compensation deferrals or revoke a
participant's pre-tax compensation deferral election, or may direct the
employer to make additional contributions on behalf of participants who are not
highly compensated eligible employees, pro rata, according to the amount
contributed on behalf of each of them under subsection 3.1 for that plan year
and without further reduction in their employment compensation, which
contributions shall be fully vested and nonforfeitable on the date contributed.
In addition, if at the end of any plan year, because of the limitations
prescribed under subsection 7.4, a portion of a participant's pre-tax
compensation deferral contributions cannot be credited to his pre-tax
compensation deferral account, such excess contributions (and the income
thereon) shall be returned to the participant (without regard to any other
provision of the plan) as soon as practicable
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after the end of that plan year (but in no event later than 2-1/2 months
following the end of the plan year to which such excess contributions relate).
Any employer matching contribution which either (a) cannot be credited to a
participant's employer match account because of the limitations prescribed
under subsection 5.2, or (b) is attributable to the portion, if any, of a
participant's excess pre-tax compensation deferral contributions determined in
accordance with the preceding sentence, shall not be credited to the
participant's employer match account but instead shall be applied to reduce the
employer match contributions for the following plan year. The company may
adopt such rules and procedures as it deems necessary or desirable to impose
limitations on the amount of pre-tax compensation deferral contributions and
employer match contributions to be made on behalf of participants in order to
avoid the necessity of adjustments under this paragraph and subsection 7.1.
Any reduction of a participant's rate of pre-tax deferral contributions
(including reductions which result in a distribution of excess contributions)
under this subsection 7.6 shall be made in accordance with the leveling method
described in U.S. Treasury Regulation Section 1.401(k)-1(f)(2).
7.7. Dollar Limitation on Pre-Tax Contributions. In no event
may a participant make a pre-tax compensation deferral contribution election
which will result in his elective deferrals (as defined below) for any calendar
year exceeding $7,979
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(or such greater amount as may be prescribed by the Secretary of the U.S.
Treasury to take into account cost-of-living increases pursuant to Code Section
402(g)(5)). For purposes of this subsection 7.7, the term "elective deferral"
means, with respect to any calendar year, the sum of any contribution made on
behalf of the participant (whether or not made by an employer):
(a) under a cash or deferred arrangement (as defined in
Code Section 401(k)) to the extent not includible in
the participant's gross income for that calendar year
pursuant to Code Section 402(a)(8) (determined
without regard to Code Section 402(g));
(b) to an individual retirement plan pursuant to a
simplified employee pension to the extent not
includible in the participant's gross income for that
calendar year under Code Section 402(h)(1)(B)
(determined without regard to Code Section 402(g));
and
(c) applied toward the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary
reduction agreement (without the meaning of Code
Section 3121(a)(5)(D)).
7.8. Distribution of Excess Deferrals. If a participant's
elective deferrals with respect to any calendar year exceed the annual dollar
limit prescribed under subsection 7.7 above, either solely with respect to this
plan or by combination of the elective deferrals under this plan and
contributions made on a pre-tax basis under other cash-or-deferred arrangements
in which he is a participant, the participant may notify the company in writing
prior to March 1 next following the close of such calendar year of his election
to have all or
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a portion of his pre-tax compensation deferrals under the plan treated as
excess deferrals. In such event, or in the event that the company otherwise
becomes aware of any excess deferrals, the company may, in its sole discretion
and without regard to any other provision of the plan, direct the trustee to
distribute to the participant prior to the April 15 following immediately
thereafter the amount of the participant's pre-tax compensation deferrals
treated as excess deferrals under the plan. The amount of such excess
deferrals distributed to a participant in accordance with the preceding
sentence shall be treated as a contribution for purposes of the limitations
referred to under subsection 7.1, and shall continue to be treated as pre-tax
compensation deferral contributions for purposes of the actual deferral
percentage test described in subsection 7.4; however, excess deferrals by
non-higher compensated eligible employees shall not be taken into account under
subsection 7.4 to the extent such excess deferrals are made under this plan or
any other plan maintained by an employer or controlled group member.
7.9. Special Family Aggregation Rules. In applying the
limitations under subsections 5.2 and 7.4, the following family aggregation
rules shall apply:
(a) Family members (as defined in subsection 7.5) of a
higher compensated eligible employee who is either a
five percent owner of an employer or one of the ten
most higher compensated eligible employees with
respect to any plan year, shall not be
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treated as separate participants and a single ratio
shall be determined for the family members and the
higher compensated eligible employee ("family
group"). The family group shall be treated as a
single higher compensated eligible employee having a
ratio for the plan year equal to the ratio
determined by combining the compensation and pre-tax
compensation deferral contributions or employer match
contributions, as the case may be, of all members of
the family group. For purposes of determining the
family group's ratio under subsection 7.4, the limit
on compensation imposed under Section 401(a)(17) of
the Code shall be applied only to the extent required
by that Section and the regulations thereunder.
(b) If a family group has an excess contribution or
excess match contribution, such excess contribution
or excess match contribution shall be allocated among
all members of the family group in proportion to
their pre-tax compensation deferral contributions or
employer match contributions, as the case may be.
7.10. Allocation of Earnings to Distributions of Excess
Deferrals and Excess Contributions. The earnings allocable to distributions of
excess contributions required under subsection 7.4 and excess deferrals
required under subsection 7.8 shall be determined by multiplying the earnings
attributable to the participant's pre-tax compensation deferral contributions
(for the calendar and/or plan year, whichever is applicable) by a fraction, the
numerator of which is the applicable excess amount, and the denominator of
which is the balance attributable to such contributions in the participant's
account or accounts, as of the last day of such year reduced by gains
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(or increased by losses) attributable to such balance for such year. The
earnings allocable to such excess deferrals and excess contributions for the
period between the end of the applicable year and the date of distribution
shall be determined under the same fractional method described above or,
alternatively, by increasing the earnings determined for the applicable year
above by 10 percent for each calendar month (or portion thereof in excess of 15
days) that has elapsed since the end of such year. Notwithstanding the
foregoing, the earnings allocable to such excess deferrals and excess
contributions may be determined by any reasonable, nondiscriminatory method
selected by the company, which method, at the discretion of the company, may or
may not provide for the allocation of earnings for the period between the end
of the applicable year and the date of distribution, provided that such method
is used consistently for all participants and for all distributions required
under subsections 7.4 and 7.8 under the plan for a calendar or plan year, and
is used by the plan for allocating earnings to participants' accounts.
7.11. Multiple Use of Alternative Limitation. In accordance
with Treasury Regulation Section 1.401(m)-2(c), multiple use of the alternative
limitation which occurs as a result of testing under the limitations described
in subsection 5.2 and 7.4 above shall be corrected in the manner described in
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Treasury Regulation Section 1.401(m)-1(e). The term "alternative limitation"
means the alternate test described in subparagraph 7.4(b) above as applied to
both pre-tax compensation deferral contributions and employer match
contributions.
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SECTION 8
Limitations Under the Puerto Rico Income Tax Act
8.1. ITA Dollar Limitation on Pre-Tax Contributions.
Pursuant to Section 165(e)(7) of the ITA, in no event shall a participant's
pre-tax compensation deferral contributions election result in an elective
deferral for any calendar year exceeding the lesser of ten percent of the
participant's total compensation (as defined in subsection 3.4) or $7,000.
8.2. Distribution of Excess ITA Deferrals. If for any
calendar year a participant's elective deferrals prescribed under subsection
8.1. exceed the annual dollar limit (such portion is referred to as an "excess
ITA deferral"), the company shall direct that the excess ITA deferral (and the
income allocable to such excess ITA deferral) be distributed to the participant
as soon as practicable after the end of that calendar year (but in no event
later than 2-1/2 months following the end of the calendar year to which such
excess contributions relate). If for a plan year a participant has made any
combination of excess ITA deferrals (as defined in this subsection 8.2), excess
ITA savings (as defined in subsection 8.4), contributions exceeding the actual
deferral percentage (as defined in subsection 7.4), or excess elective
deferrals (as defined in subsection 7.7), the distributions of such excess
amounts shall be coordinated to the extent appropriate to eliminate
duplication.
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8.3. Limitations on Pre-Tax Compensation Deferral
Contributions. Participants' pre-tax compensation deferral contributions are
intended to qualify as cash or deferred contributions agreements under Section
165(e) of the ITA, and therefore in no event shall the real deferred percentage
(as defined below) of eligible employees who are higher compensated eligible
employees (as defined in subsection 8.6) for any plan year exceed the greater
of:
(a) the real deferred percentage of all other eligible
employees for such plan year multiplied by 1.25; or
(b) the real deferred percentage of all other eligible
employees for such plan year multiplied by 2.0;
provided that the real deferred percentage of such
higher compensated eligible employees does not exceed
that of all other eligible employees by more than 2
percentage points.
The real deferred percentage of a group of eligible employees for a plan year
means the average of the ratios (determined separately for each eligible
employee in such group) of (1) the pre-tax compensation deferral contributions
credited to each such eligible employee's accounts for the plan year, to (2)
the eligible employee's annual compensation (as defined in subsection 3.4) for
the plan year. For purposes of this subsection, an "eligible employee" for any
plan year means an employee or former employee who at any time during the plan
year was eligible to participate in the plan and make pre-tax compensation
deferral contributions, and also means an employee or former employee who at
any time during the plan year would have
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been eligible to participate in the plan and make such contributions but for a
withdrawal or the Section 415 contribution limitations described in Section 7.
8.4. Contribution Adjustments. The company shall monitor
pre-tax compensation deferral contributions from time to time during each plan
year and, to the extent necessary to ensure compliance with Section 165(e) of
the ITA and this subsection, shall determine (i) whether any pre-tax
compensation deferral contributions that otherwise might be made by higher
compensated eligible employees should be limited (if so, notice of such
limitation shall be given to affected participants); and (ii) whether
additional contributions should be made by an employer on behalf of
participants who are not higher compensated eligible employees, pro rata,
according to the amount contributed on behalf of each of them under subsection
3.1 for that plan year and without further reduction in their employment
compensation. If, notwithstanding actions the company may determine to take
under the preceding sentence, the plan would fail to satisfy the requirements
of Section 165(e) of the ITA and this subsection, the company shall, to the
extent necessary to meet such requirements and to the extent legally
permissable, reduce the pre-tax compensation deferral contributions made by
higher compensated eligible employees, in descending order, beginning with
pre-tax compensation deferral contributions made by higher compensated eligible
employees
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with the highest real deferred percentages. The portions of a participant's
pre-tax compensation deferral contributions that are so reduced are referred to
as "excess ITA savings."
8.5. Distribution of Excess ITA Savings. The company shall
direct that excess ITA savings for any plan year (and income allocable to such
excess savings) be returned to the higher compensated eligible employees who
made them as soon as practicable after the end of that plan year, but not later
than 2-1/2 months following the end of the plan year to which the excess ITA
savings relate.
8.6. Higher Compensated Eligible Employee Under ITA. The
plan is intended to meet the minimum coverage requirements of Section 165(a)(3)
of the ITA, as well as the nondiscrimination test of Section 165(e) of the ITA
(as set forth in subsection 8.3). For purposes of determining whether the
requirements of Section 8 are met, the term "higher compensated eligible
employee" means any employee who receives a higher annual compensation (as
defined in subsection 3.4) than two-thirds of eligible employees.
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SECTION 9
Payment of Account Balances
9.1. Payment at Settlement Date. Upon a participant's
settlement date the balances in his accounts as at the accounting date
coincident with or next following such settlement date (after all adjustments
required under the plan as of that date have been made) shall be nonforfeitable
and shall be distributable to him or, in the event of his death, to his
beneficiary in a lump sum payment.
9.2. Spouse as Beneficiary. Notwithstanding the provisions
of subsection 9.1 and any beneficiary designation filed with the company in
accordance with subsection 9.4, except as provided in subsection 13.8, if a
participant dies and has a "surviving spouse" (as defined below) at his date of
death, the contributions and account balances described in subsection 9.1 shall
be payable in full to the participant's surviving spouse, unless prior to the
participant's death all of the following requirements were met:
(a) the participant elected a waiver of payment of
benefits under the plan to his surviving spouse;
(b) the participant's spouse consented in writing to such
election;
(c) the election designated a beneficiary which may not
be changed without spousal consent (or the consent of
the spouse expressly
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permitted designations by the participant without any
further consent by the spouse);
(d) the spouse's consent acknowledged the effect of such
election; and
(e) the spouse's consent was witnessed by a notary public
or a plan representative designated by the company.
The term "surviving spouse" means the spouse of the participant at his date of
death to whom the participant was legally married under applicable state law.
9.3. Commencement of Distributions. Except as provided
below, payment of a participant's benefits will be made within a reasonable
time after his settlement date, but not later than 60 days after (a) the end of
the plan year in which his settlement date occurs, or (b) such later date on
which the amount of the payment can be ascertained by the trustee. A
participant, with the consent of the company, may elect to have his account
balances paid as soon as practicable following the first anniversary of his
settlement date. Effective July 1, 1989, distribution of a participant's
benefits shall be made by April 1 of the calendar year next following the
calendar year in which the participant attains age 70-1/2 (his "required
commencement date"); provided, however, that the required commencement date of
a participant who is not a five percent owner and who attained age 70-1/2 prior
to January 1, 1988 shall be April 1 of the calendar year next following the
later of the calendar year in which he attained age 70-1/2 or the calendar
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year in which he retires, and the required commencement date of a participant
who attained age 70-1/2 in calendar year 1988 shall be April 1, 1990.
Notwithstanding the foregoing, a participant may, prior to his required
commencement date, irrevocably elect to receive a series of either (i) only the
required minimum distributions under Section 401(a)(9) of the Code and the
regulations thereunder, or (ii) lump sum payments, for each distribution year
prior to his settlement date; provided that, such minimum distributions shall
be calculated based on the expected return multiples of Table V (single life
annuity) of U.S. Treasury Regulation Section 1.72-9. If a participant's
settlement date occurs under subparagraphs 2.7(a), (b) or (d), such participant
may elect by written instrument filed with the company to have the commencement
of distribution of his benefits deferred as follows:
(a) if the value of such participant's benefits exceeds
$3,500, payment of such benefit may be deferred until
any regular accounting date after such participant's
settlement date, but no later than the first regular
accounting date of the first calendar year beginning
after the participant attains normal retirement age.
If such deferral of payment is elected in accordance
with the provisions of this subsection, all of the
participant's account balances shall be transferred
to the Interest Income Fund (as defined in
subparagraph 11.2(a)) as of April 1 of the calendar
year following the year in which the participant's
settlement date occurs, until all benefits to which
such participant (or his beneficiaries) are entitled
under the plan have been distributed.
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(b) if the value of such participant's benefits is less
than or equal to $3,500 or if a participant's
settlement date occurs on or after he attains age 65
years, payment of such benefit may be deferred until
the first regular accounting date of the first
calendar year which begins after the participant's
settlement date.
Notwithstanding the foregoing, if the value of benefits to be distributed to a
participant on his settlement date under subparagraph 2.7(a), (b) or (d)
exceeds $3,500, payment of such benefits shall not be made (or commence)
earlier than the participant's normal retirement date unless the participant
consents to an earlier payment. Distribution of amounts invested in the Sara
Lee Corporation Common Stock Fund, pursuant to subparagraph 11.2(d), may be
made in cash or in shares, as elected by the participant, provided such shares
are distributed at their fair market value at the date of the distribution, as
determined by the trustee. All other distributions shall be made in cash,
except as provided in subsection 9.4.
9.4. Designation of Beneficiary. Subject to the provisions
of subsection 9.2, each participant from time to time, by signing a form
furnished by the company, may designate any person or persons (who may be
designated concurrently, contingently or successively) to whom his benefits are
to be paid if he dies before he receives all of his benefits. A beneficiary
designation form will be effective only when the form is filed with the company
while the participant is alive and will cancel all beneficiary designation
forms previously filed
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with the company. Subject to the provisions of subsections 9.2 and 13.8, if a
deceased participant failed to designate a beneficiary as provided above, or if
his beneficiary designation is ineffective for any reason or if the designated
beneficiary dies before the participant or before complete payment of the
participant's benefits, the company will direct the trustee to pay the
participant's benefits to the participant's surviving spouse or, if there is no
surviving spouse, to or for the benefit of:
(a) One or more of the participant's relatives by blood,
adoption or marriage and in such proportions as the
company determines; or
(b) The legal representative or representatives of the
estate of the last to die of the participant and his
designated beneficiary.
The term "designated beneficiary" as used in the plan means the person or
persons (including a trustee or other legal representative acting in a
fiduciary capacity) designated by a participant as his beneficiary in the last
effective beneficiary designation form filed with the company under this
subsection and to whom a deceased participant's benefits are payable under the
plan. The term "beneficiary" as used in the plan means the natural or legal
person or persons to whom a deceased participant's benefits are payable. A
beneficiary may elect distribution of amounts invested in the Sara Lee
Corporation Common Stock Fund described in subparagraph 11.2(d) in cash or in
shares, as elected by the beneficiary, provided such shares are
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distributed at their fair market value at the date of distribution, as
determined by the trustee.
9.5. Missing Participants or Beneficiaries. Each participant
and each designated beneficiary (including the participant's surviving spouse)
must file with the company from time to time in writing his post office
address and each change of post office address. Any communication, statement
or notice addressed to a participant or beneficiary at his last post office
address filed with the company, or if no address is filed with the company
then, in the case of a participant, at his last post office address as shown on
the company's records, will be binding on the participant and his beneficiary
for all purposes of the plan. None of the company, the employer or the trustee
are required to search for or locate a participant or beneficiary. If the
company notifies a participant or beneficiary that he is entitled to a payment
and also notifies him of the provisions of this subsection, and the participant
or beneficiary fails to claim his benefits or make his whereabouts known to the
company within three years after the notification, the benefits of the
participant or beneficiary will be disposed of as follows:
(a) If the whereabouts of the participant's designated
beneficiary then are known to the company, payment
will be made to the designated beneficiary;
(b) If the whereabouts of his designated beneficiary then
are unknown to the company but the whereabouts of one
or more relatives by
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blood, adoption or marriage of the participant are
known to the company the company may pay the
participant's account balances to one or more of such
relatives and in such proportions as the company
decides.
9.6. Facility of Payment. When a person entitled to benefits
under the plan is under legal disability, or, in the company's opinion, is in
any way incapacitated so as to be unable to manage his financial affairs, the
company may direct the trustee to pay the benefits to such person's legal
representative, or to a relative or friend of such person for such person's
benefit, or the company may apply such benefits for the benefit of such person
in any way it considers equitable or practicable. Any payment made in
accordance with the preceding sentence shall be a full and complete discharge
of any liability for such payment under the plan.
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SECTION 10
Withdrawals
10.1. Hardship Withdrawals. In the event a participant in
the active service of the company suffers a serious financial hardship, such
participant may withdraw a portion of his rollover account, employee pre-tax
account and his employer match account, excluding earnings credited to his
employee pre-tax account on or after January 1, 1989, provided that the amount
of the withdrawal is at least $250.00 and does not exceed the amount required
to meet the immediate financial need created by the serious financial hardship
and pay any taxes that will be incurred by the participant on account of such
withdrawal. Such serious financial hardship must be shown by positive evidence
submitted to the company that the hardship is of sufficient magnitude to impair
the participant's financial security. The determination of whether a
participant has a serious financial hardship shall be made on the basis of all
relevant facts and circumstances in a consistent and nondiscriminatory manner,
and shall not fail to qualify because it was reasonably foreseeable or
voluntarily incurred by the participant. Serious financial hardships are
limited to amounts necessary for:
(a) Medical expenses incurred by the participant, his
spouse or his dependents.
(b) Purchase (excluding mortgage payments) of a principal
residence for the participant.
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(c) Payment of tuition and related educational fees for
the next twelve months of post-secondary education
for the participant, his spouse or his dependents.
(d) Preventing foreclosure on or eviction from the
participant's principal residence.
Whether, in any case, the requirement that the withdrawal not exceed the amount
required to meet the immediate financial need created by the serious financial
hardship is satisfied shall be made on the basis of all relevant facts and
circumstances in a consistent and nondiscriminatory manner; provided that, the
participant must provide the company with a written statement on which the
company may reasonably rely, certifying that the participant's financial need
cannot be relieved by all of the following means:
(a) Through reimbursement or compensation by insurance or
otherwise,
(b) By reasonable liquidation of the participant's
assets, to the extent such liquidation would not
itself cause an immediate and heavy financial need,
(c) By cessation of elective contributions under this
plan, or other distributions from this plan, and
(d) By other distributions or nontaxable (at the time of
the loan) loans from plans maintained by the employer
or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms.
For purposes of this subsection 10.1, the participant's resources shall be
deemed to include those assets of his spouse
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and minor children that are reasonably available to the participant. Property
owned by the participant and the participant's spouse, whether as community
property, joint tenants, tenants by the entirety, or tenants in common, will be
deemed a resource of the participant. However, property held for the
participant's child under an irrevocable trust or under the Uniform Gifts to
Minors Act will not be treated as a resource of the participant. No withdrawal
shall be permitted under this subsection until all withdrawals permitted under
subsection 10.2 have been or coincident with a request under this subsection
will be fully withdrawn pursuant to the provisions of subsection 10.2.
Hardship withdrawals shall be made as of a regular accounting date, after all
adjustments as of that date have been made pursuant to subsection 6.8.
Alternatively, hardship withdrawals may be made on a monthly basis subject to
the provisions of 6.8; provided that the amount of such withdrawal shall be
further limited to 80% of the participant's accounts as of the immediately
preceding accounting date. Withdrawals shall be charged against a
participant's accounts in accordance with subsection 6.5.
10.2. Pre-Termination Distribution. While the plan is
designed primarily to accumulate funds for the use of participants when they
retire from employment with the employers, it is recognized that it may be
desirable to permit distributions to be made to employees who have participated
in the plan
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for a reasonable period of time and who are approaching retirement.
Accordingly, notwithstanding any other provisions of the plan, distribution of
a participant's account balances may be made prior to his settlement date under
the following conditions:
(a) By writing filed with the company at such time and in
such manner as the company may prescribe after he has
attained age 59-1/2 years, a participant may
irrevocably elect that part or all of the net credit
balances in his accounts as of the date such election
is to take effect (after any adjustments required to
such accounts as of such date have been made) be
distributed to him as soon as practicable thereafter
by payment in a lump sum.
(b) Any distribution to a participant from his accounts
pursuant to this subsection shall be immediately
charged to such accounts but he shall continue to be
eligible to make pre-tax compensation deferral
contributions and his account balances shall continue
to be held and adjusted as of each accounting date,
subject to the conditions and limitations of the
plan.
10.3. Number, Manner and Distribution of Withdrawals. No
more than two withdrawals (regardless of the type of withdrawal) may be made by
any participant under this Section 10 during any calendar year. Any request
for withdrawal under this Section shall be filed with the company on such forms
as the company may provide and shall specify the value of such withdrawal in
terms of dollars or a percentage of account value; provided such percentage is
not greater than 100
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percent of the participant's account balance. If a participant's settlement
date occurs after he makes a withdrawal request in accordance with this Section
10 but prior to distribution of his account balances, the election shall
automatically be cancelled and the benefits he or his beneficiary are entitled
to receive under the plan shall be distributed in accordance with the
provisions of the plan.
10.4. Nonforfeiture Provision. In no event shall any
withdrawal made by a participant pursuant to the provisions of this Section
result in the forfeiture of such participant's vested interest under the plan.
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SECTION 11
The Trust Fund and Investment of Trust Assets
11.1. The Trust Fund. The trust fund will consist of all
money, stocks, bonds, securities and other property of any kind held and
acquired by the trustee in accordance with the plan and the trust instrument.
11.2. The Investment Funds. The following investment funds
shall be maintained within the trust fund:
(a) Interest Income Fund. An "Interest Income Fund," the
assets of which are primarily invested in fixed
interest instruments (including guaranteed investment
contracts between the trustee and a legal reserve
life insurance company, commercial bank, savings and
loan association or other financial institution or
corporation).
(b) Balanced Fund. A "Balanced Fund" a portion of the
assets of which are invested in a portfolio of stocks
and a portion of which are invested in a portfolio of
fixed income instruments such as bonds.
(c) Diversified Equity Fund. A "Diversified Equity
Fund," the assets of which are primarily invested in
a diversified pool of a large number of stocks.
(d) Small Stock Fund. A "Small Stock Fund," the assets
of which are primarily invested aggressively in a
portfolio of growth-oriented small company stocks.
(e) International Equity Fund. An "International Equity
Fund" the assets of which are invested in stocks of
companies located outside the United States.
(f) Sara Lee Corporation Common Stock Fund. A "Sara Lee
Corporation Common Stock Fund," the assets of which
are primarily invested
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in shares of Sara Lee Corporation common stock ("Sara
Lee stock").
The Interest Income, Balanced, Diversified Equity, Small Stock, International
Equity and Sara Lee Corporation Common Stock Funds are sometimes referred to
individually as an "investment fund" and collectively as the "investment
funds." A portion of each investment fund may be invested from time to time in
the short-term investment fund (STIF) of a custodian bank and all or a portion
of each investment fund except the Sara Lee Corporation Common Stock Fund may
be invested in one or more mutual funds with the same or similar investment
objectives.
11.3. Investment Elections. In accordance with rules
established by the company, a participant may elect by writing filed with the
company to have his account balances invested in one or more of the investment
funds in even multiples of ten percent. If a participant does not (or is not
permitted to) make the election described above within such reasonable period
as may be determined by the company, or if his election instructions are
incomplete or inaccurate, he shall be deemed to have elected that his entire
account balances be invested in the Interest Income Fund. Amounts credited to
a participant's accounts after his investment election shall be invested in
accordance with that election, subject to any subsequent elections he makes
under subsections 11.4 and 11.5.
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11.4. Change in Investment Elections. Effective as of the
first day of any plan year quarter, a participant may elect to change his
investment election by writing filed with the company according to the
procedures and deadlines established by the company. Such change shall apply
only with respect to contributions made by or on behalf of the participant that
are received by the trustee after the company has notified the trustee in
writing of the change.
11.5. Elections to Reallocate Balances Between Accounts.
Effective as of the beginning of any plan year quarter, a participant may
elect, by writing filed with the company according to the procedures and
deadlines established by the company, to reallocate the balances in his
accounts as of the first day of that plan year quarter in even multiples of ten
percent. If a participant's election to reallocate balances is incomplete or
inaccurate, the election shall be deemed void, and no reallocation shall be
made for the plan year quarter for which such void election was filed. The
company shall charge and credit, as the case may be, the participant's accounts
and subaccounts for each investment fund with such amounts as are necessary to
effect the participant's reallocation election. The transfers of balances in
subaccounts between investment funds shall be made on the accounting date
preceding the beginning of the plan year quarter for which the investment
election is effective after all of the accounting
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steps set forth in subsection 6.8 of the plan have been completed. The
foregoing provisions of this subsection are contingent upon the availability of
reallocations between investment funds under the terms of the investments made
by each investment fund.
11.6. Elections After Retirement or Other Termination of
Employment. Notwithstanding the foregoing provisions of this Section 11, if a
participant's settlement date occurs for any reason, all of the participant's
account balances shall be transferred to the Interest Income Fund, as of April
1 of the calendar year following the calendar year in which the participant's
settlement date occurs, until all benefits to which such participant (or his
beneficiaries) are entitled under the plan have been distributed.
11.7. Voting of Sara Lee Stock; Tender Offers. The company
shall notify participants of each meeting of the shareholders of Sara Lee
Corporation and shall furnish to them copies of the proxy statements and other
communications distributed to shareholders in connection with any such meeting.
The company also shall notify the participants that they are entitled to give
the trustees voting instructions as to the shares of Sara Lee stock credited to
their accounts. If a participant furnishes timely instructions to the
trustees, the trustees (in person or by proxy) shall vote the shares (including
fractional shares) of Sara Lee stock credited to the
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participant's accounts in accordance with the directions of the participant.
The trustees shall vote shares for which they have not received timely
direction, including shares which have not yet been credited to participant's
accounts, in the same proportion as directed shares are voted. Similarly, the
company shall notify participants of any tender offer for, or a request or
invitation for tenders of Sara Lee stock and shall request from each
participant instructions for the trustees as to the tendering of Sara Lee stock
credited to his accounts. The trustees shall tender such Sara Lee stock as to
which they receive (within the time specified in the notification) instructions
to tender. Any Sara Lee stock credited to the accounts of participants as to
which instructions not to tender are received and as to which no instructions
are received shall not be tendered. With respect to uncredited shares of Sara
Lee stock, the trustees in their discretion may tender or refrain from
tendering such shares.
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SECTION 12
Administration
12.1. Membership. Except as otherwise specifically provided
and in addition to the powers, rights and duties specifically given to the
company elsewhere in the plan and the trust agreement, the company may, but
shall not be required to, appoint a committee of such number of persons as it
may determine (who may but need not be employees of the company) to act as a
named fiduciary for operation and management of the plan.
12.2. Committee's General Powers, Rights and Duties. The
committee shall have the following powers, rights and duties:
(a) To adopt such regulations and rules of procedure as
in its opinion may be necessary for the proper and
efficient administration of the plan and as are
consistent with the plan and trust agreement.
(b) To determine all questions arising under the plan,
including the power to determine the rights or
eligibility of employees or participants and any
other persons, and the amounts of their benefits
under the plan, and to remedy ambiguities,
inconsistencies or omissions.
(c) To select a secretary, if it believes it advisable,
who may but need not be a committee member.
(d) To enforce the plan in accordance with the terms of
the plan and the trust agreement and the rules and
regulations adopted by the committee as above.
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(e) To direct the trustee as respects payments or
distributions from the trust fund in accordance with
the provisions of the plan.
(f) To furnish the employers with such information as may
be required by them for tax or other purposes in
connection with the plan.
(g) To employ agents, attorneys, accountants, actuaries
or other persons (who also may be employed by the
employers) and to allocate or delegate to them such
powers, rights and duties as the committee may
consider necessary or advisable to properly carry out
administration of the plan, provided that such
allocation or delegation and the acceptance thereof
by such agents, attorneys, accountants, actuaries or
other persons, shall be in writing.
(h) To construe the plan and trust agreement and to make
factual determinations thereunder, to reconcile and
correct any errors or inconsistencies and to make
adjustments for any mistakes or errors made in the
administration of the plan.
12.3. Manner of Action. During a period in which two or more
committee members are acting, the following provisions apply where the context
admits:
(a) A committee member by writing may delegate any or all
of his rights, powers, duties and discretions to any
other member, with the consent of the latter.
(b) The committee members may act by meeting or by
writing signed without meeting, and may sign any
document by signing one document or concurrent
documents.
(c) An action or a decision of a majority of the members
of the committee as to a matter shall be as effective
as if taken or made by all members of the committee.
(d) If, because of the number qualified to act, there is
an even division of opinion among
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the committee members as to a matter, a disinterested
party selected by the committee shall decide the
matter and his decision shall control.
(e) Except as otherwise provided by law, no member of the
committee shall be liable or responsible for an act
or omission of the other committee members in which
the former has not concurred.
(f) The certificate of the secretary of the committee or
of a majority of the committee members that the
committee has taken or authorized any action shall be
conclusive in favor of any person relying on the
certificate.
12.4. Interested Committee Member. If a member of the
committee also is a participant in the plan, he may not decide or determine any
matter or question concerning distributions of any kind to be made to him or
the nature or mode of settlement of his benefits unless such decision or
determination could be made by him under the plan if he were not serving on the
committee.
12.5. Resignation or Removal of Committee Members. A member
of the committee may be removed by the company at any time by ten days' prior
written notice to him and the other members of the committee. A member of the
committee may resign at any time by giving ten days' prior written notice to
the company and the other members of the committee. The company may fill any
vacancy in the membership of the committee; provided, however, that if a
vacancy reduces the membership of the committee to less than three, such
vacancy shall be filled as
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soon as practicable. The company shall give prompt written notice thereof to
the other members of the committee. Until any such vacancy is filled, the
remaining members may exercise all of the powers, rights and duties conferred
on the committee.
12.6. Committee Expenses. All costs, charges and expenses
reasonably incurred by the committee will be paid by the employers in such
proportions as the company may direct. No compensation will be paid to a
committee member as such.
12.7. Information Required by Company or Committee. Each
person entitled to benefits under the plan shall furnish the company or the
committee, as the case may be, with such documents, evidence, data or
information as the company or the committee considers necessary or desirable
for the purpose of administering the plan. The employers shall furnish the
company or the committee, as the case may be, with such data and information as
the company or the committee may deem necessary or desirable in order to
administer the plan. The records of the employers as to an employee's or
participant's period of employment, hours of service, termination of employment
and the reason therefor, leave of absence, reemployment and earnings will be
conclusive on all persons unless determined to the company's or the committee's
satisfaction to be incorrect.
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12.8. Uniform Rules. The company or the committee, as the
case may be, shall administer the plan on a reasonable and nondiscriminatory
basis and shall apply uniform rules to all persons similarly situated.
12.9. Claims Procedure. A determination by the company or
the committee, as the case may be, with respect to eligibility to participate,
service credits, vested percentage, eligibility for a benefit, the amount of a
benefit, or another matter relating to a particular participant or beneficiary
shall be reviewed by the company or the committee, as the case may be, or an
individual designated by the company or the committee, as the case may be, for
this purpose, upon application by the affected participant or beneficiary. The
initial decision of the company or the committee, as the case may be, or
designated individual upon the application shall be rendered in writing within
a reasonable period of time after receipt of the application. The written
decision shall set forth in a manner calculated to be understood by the
applicant: (i) the decision and the specific reason for the decision; (ii)
specific reference to the plan provisions on which the decision is based; (iii)
a description of additional material, information or acts, if any, pertinent to
the decision and which may change or modify the decision, together with an
explanation of the same; and (iv) an explanation of the procedure for further
review of the decision. Within 60 days of receipt of the writ-
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ten decision, the individual filing the original application, or the
individual's duly authorized representative, may, by written application,
request a redetermination by the company or the committee, as the case may be.
Pursuant to the written application, the applicant or the duly authorized
representative may review all pertinent documents and may submit issues,
comments and arguments in writing. Within 60 days of receipt of an application
for redetermination (unless special circumstances required a longer period of
time, in which case within a reasonable period of time, but not longer than 120
days after receipt of the application), the company or the committee, as the
case may be, shall provide the person filing the application for
redetermination with its final decision written in a manner calculated to be
understood by the person filing the application for redetermination, setting
forth specific reasons for the decision with specific reference to plan
provisions on which the decision is based.
12.10. Decisions Final. Subject to applicable law, any
interpretation of the provisions of the plan (including factual determinations
thereunder) and any decisions on any matter within the discretion of the
company or the committee, as the case may be, made by the company or the
committee in good faith shall be binding on all persons. A misstatement or
other mistake of fact shall be corrected when it becomes known
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and the company or the committee shall make such adjustment on account thereof
as it considers equitable and practicable.
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SECTION 13
General Provisions
13.1. Additional Employers. Any subsidiary of the company
may adopt the plan and become a party to the trust agreement by:
(a) Filing with the company and the trustee a written
instrument to that effect; and
(b) Filing with the company and the trustee a certified
copy of a resolution of the company's Board of
Directors consenting to such action.
13.2. Action by Employers. Any action required or permitted
to be taken by an employer under the plan shall be by resolution of its Board
of Directors, by resolution of a duly authorized committee of its Board of
Directors, or by a person or persons authorized by resolution of its Board of
Directors or such committee.
13.3. Waiver of Notice. Any notice required under the plan
may be waived by the person entitled to such notice.
13.4. Gender and Number. Where the context admits, words in
the masculine gender shall include the feminine and neuter genders, the
singular shall include the plural, and the plural shall include the singular.
13.5. Controlling Law. Except to the extent superseded by
laws of the United States or Puerto Rico, the laws of
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Illinois shall be controlling in all matters relating to the plan.
13.6. Employment Rights. The plan does not constitute a
contract of employment, and participation in the plan will not give any
employee the right to be retained in the employ of the employers, nor any right
or claim to any benefit under the plan, unless such right or claim has
specifically accrued under the terms of the plan.
13.7. Litigation by Participants. If a legal action begun
against the trustee, an employer or the committee by or on behalf of any person
results adversely to that person, or if a legal action arises because of
conflicting claims to a participant's or other person's benefits, the cost to
the trustee, the employer or the company of defending the action will be
charged to the extent permitted by law to the sums, if any, which were involved
in the action or were payable to the person concerned.
13.8. Interests Not Transferable. Except as otherwise
provided in subsection 13.11, or as may be required by the tax withholding
provisions of the Code or the ITA or any state's income tax act, the interests
of persons entitled to benefits under the plan are not subject to their debts
or other obligations and may not be voluntarily or involuntarily sold,
transferred, alienated, assigned or encumbered.
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13.9. Absence of Guaranty. None of the company, the trustee
or any employer in any way guarantees the trust fund from loss or depreciation.
The liability of the company, the trustee or the employers to make any payment
under the plan will be limited to the assets held by the trustee which are
available for that purpose.
13.10. Evidence. Evidence required of anyone under the plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
13.11. Domestic Relations Orders. If the company receives a
domestic relations order issued by a court pursuant to a state's or Puerto
Rico's domestic relations law, the company will direct the trustee to make such
payment of the participant's benefits to an alternate payee or payees (i.e., a
spouse, former spouse, child or other dependent of the participant) as such
order specifies, provided the company first determines that such order is a
"qualified" domestic relations order ("QDRO") within the meaning of Section
414(p) of the Code. The company will establish reasonable procedures for
determining whether or not a domestic relations order is a QDRO. Upon
receiving a domestic relations order, the company shall promptly notify the
participant and any alternate payee named in the order that the company has
received the order and
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any procedures for determining whether the order is a QDRO. If, within 18
months after receiving the order, the company makes a determination that the
order is a QDRO, any direction to the trustee to pay the benefits to an
alternate payee as specified in the QDRO will include a direction to pay any
amounts that were to be paid during the period prior to the date the company
determines that the order is a QDRO. If during said 18-month period the
company determines that the order is not a QDRO or no determination is made
with respect to whether the order is a QDRO, the company will direct the
trustee to pay the amounts that would have been paid to the alternate payee
pursuant to the terms of the order to the participant if such amounts otherwise
would have been payable to the participant under the terms of the plan. The
company in its discretion may maintain an account for an alternate payee to
which any amount that is to be paid to such payee from a participant's accounts
will be credited. The alternate payee for whom such account is maintained may
exercise the same elections with respect to the fund or funds in which the
account will be invested as would be permissible for a participant in the plan.
Further, the alternate payee may name a beneficiary, in the manner provided in
subsection 9.4 to whom the balance in the account is to be paid in the event
the alternate payee should die before complete payment of the account has been
made.
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SECTION 14
Amendment and Termination
14.1. Amendment. While the employers expect and intend to
continue the plan, the company reserves the right to amend the plan from time
to time, except as follows:
(a) No amendment shall reduce the value of a
participant's benefits to less than the amount he
would be entitled to receive if he had resigned from
the employ of the employers and controlled group
members on the day of the amendment; and
(b) Except as provided in subsection 5.6, under no
condition shall an amendment result in the return or
repayment to an employer of any part of the trust
fund or the income from it or result in the
distribution of the trust fund for the benefit of
anyone other than persons entitled to benefits under
the plan.
(c) The duties and liabilities of the committee cannot be
changed without its consent.
14.2. Termination. The plan will terminate as to all
employers on any date specified by the company if thirty days' advance written
notice of the termination is given to the company, the trustee and the other
employers. The plan will terminate as to an individual employer on the first
to occur of the following:
(a) The date it is terminated by that employer if 30
days' advance written notice of the termination is
given to the company, the trustee and the other
employers.
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(b) The date that employer is judicially declared
bankrupt or insolvent.
(c) The date that employer completely discontinues its
contributions under the plan.
(d) The dissolution, merger, consolidation or
reorganization of that employer, or the sale by that
employer of all or substantially all of its assets,
except that:
(i) in any such event arrangements may be made
with the consent of the company whereby the
plan will be continued by any successor to
that employer or any purchaser of all or
substantially all of its assets, in which
case the successor or purchaser will be
substituted for that employer under the
plan and the trust agreement; and
(ii) if an employer is merged, dissolved or in
any other way reorganized into, or
consolidated with, any other employer, the
plan as applied to the former employer will
automatically continue in effect without a
termination thereof.
14.3. Vesting and Distribution on Termination. On
termination or partial termination of the plan, the date of termination will be
a "special accounting date" and, after all adjustments then required have been
made, each affected participant's benefits will be nonforfeitable. If, on
termination of the plan, the participant remains an employee of an employer or
controlled group member, the amount of his benefits shall be retained in the
trust fund until his termination of employment
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with the employers and controlled group members and then shall be paid to him
in accordance with the provisions of Section 9.
14.4. Notice of Amendment or Termination. Participants will
be notified of an amendment or termination of the plan within a reasonable
time.
14.5. Plan Merger, Consolidation, Etc. In the case of any
merger or consolidation of this plan with, or transfer of assets or liabilities
of this plan to, any other plan, each participant's benefits if the plan
terminated immediately after such merger, consolidation or transfer shall be
equal to or greater than the benefits he would have been entitled to receive if
the plan had been terminated immediately before the merger, consolidation or
transfer.
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SUPPLEMENT A
Top-Heavy Rules
A-1. Purpose and Effect. The purpose of this Supplement A is
to comply with the requirements of Section 416 of the Code. The provisions of
this Supplement A shall be effective for each plan year in which the plan is a
"top-heavy plan" within the meaning of Section 416(g) of the Code.
A-2. Top-Heavy Plan. In general, the plan will be a
top-heavy plan for any plan year if, as of the last day of the plan year (the
"determination date"), the sum of the amounts in (a), (b) and (c) below for
participants who are key employees (as defined below and in Section 416(i)(1)
of the Code) exceed 60 percent of the sum of such amounts for all employees who
are covered by a defined benefit plan or defined contribution plan which is
aggregated in accordance with paragraph A-6 below:
(a) The aggregate account balance of participants under
this plan.
(b) The present value of the cumulative accrued benefit
of participants under any defined benefit plan
included under paragraph A-6 below.
(c) The aggregate account balance of participants under
any other defined contribution plan included under
paragraph A-6 below.
In making the foregoing determination, the following special rules shall apply:
(i) the present value of a participant's cumulative accrued benefit and account
balance shall be increased by the aggregate distributions, if any, made with
respect to the participant during the 5-year period ending on the determination
date, (ii) the cumulative accrued benefit or account balance of a participant
who was previously a key employee, but who is no longer a key employee, shall
be disregarded, (iii) the cumulative accrued benefit or account balance of a
beneficiary of a participant shall be considered an accrued benefit or account
balance of the participant, (iv) the cumulative accrued benefit or account
balance of any participant who has not performed any services for the employers
during the five-year period ending on the determination date shall be
disregarded.
A-1
<PAGE> 78
A-3. Key Employee. In general, a "key employee" is an
employee or former employee who, at any time during the 5-year period ending on
the determination date, is:
(a) an officer of an employer or controlled group member
receiving annual compensation from the employers and
controlled group members in excess of 50 percent of
the limitation in effect under Section 415(b)(1)(A)
of the Code; provided, that for purposes of this
subparagraph (a), no more than 50 employees of the
employers and controlled group members (or if lesser,
the greater of 3 employees or 10 percent of the
employees) shall be treated as officers;
(b) one of the ten employees receiving annual
compensation from the employers and controlled group
members in excess of the limitation in effect under
Section 415(c)(1)(A) of the Code and owning the
largest interests greater than one-half percent in an
employer or a controlled group member;
(c) a 5 percent owner of an employer or a controlled
group member; or
(d) a 1 percent owner of an employer or a controlled
group member receiving annual compensation from the
employers and controlled group members of more than
$150,000.
A-4. Minimum Employer Contribution. For any plan year in
which the plan is a top-heavy plan, the sum of the employer contributions under
this plan and employer contributions under any other defined contribution plan
maintained by an employer or controlled group member to be credited to each
participant who is not a key employee shall not be less than the lesser of
three percent of such participant's compensation for the year or the maximum of
such contributions credited in that year to a key employee (expressed as a
percentage of such key employee's compensation for such year up to $200,000).
For purposes of the foregoing, contributions under subsection 5.1 shall not be
considered employer contributions. A participant shall receive the minimum
employer contribution required under this paragraph A-4 for a year regardless
of whether he has completed 1,000 hours of service during such year or made
mandatory contributions, if required under the plan.
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<PAGE> 79
A-5. Maximum Compensation. For any plan year in which the
plan is a top-heavy plan, an employee's compensation in excess of $200,000 (or
such other amount as may be determined by the Commissioner of Internal Revenue
for that plan year) shall be disregarded for purposes of the plan.
A-6. Aggregation of Plans. In accordance with Section
416(g)(2) of the Code, each other defined benefit plan and defined contribution
plan maintained by an employer or controlled group member which covers a "key
employee" as a participant or which is maintained by an employer or controlled
group member in order for a plan covering a key employee to be qualified, shall
be aggregated with this plan in determining whether this plan is top-heavy.
A-7. Coordination of Benefits. If a participant is covered
by another plan maintained by an employer or controlled group member, the
minimum contribution otherwise required under paragraph A-4 above may be
reduced or may be increased in accordance with regulations of the Secretary of
the Treasury to prevent inappropriate duplication or inappropriate omission of
required minimum benefits or contributions.
A-8. Adjustment of Combined Benefit Limitations. For any
plan year in which the plan is a top-heavy plan, the determination of the
defined contribution plan fraction and defined benefit plan fraction under
Section 7 of the plan shall be adjusted in accordance with the provisions of
Section 416(h) of the Code.
A-9. Use of Terms. Except as provided below, terms and
provisions of the plan shall apply to this Supplement, except that where the
terms and provisions of the plan and this Supplement A conflict, the terms and
provisions of this Supplement A shall govern. For purposes of this Supplement
the term "compensation" shall mean compensation as defined in Treas. Reg. Sec.
1.415-2(d).
A-3
<PAGE> 1
EXHIBIT 4.11
SPRING CITY KNITTING CO., INC.
RETIREMENT SAVINGS PLAN
Effective February 1, 1987
(Conformed Copy Through Amendment No. 2)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
PREAMBLE
ARTICLE 1: DEFINITIONS
-----------
<S> <C> <C>
1.01 ACCRUED BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 AFFILIATED EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 BASIC AFTER-TAX EMPLOYEE CONTRIBUTION ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 BASIC EARNINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTION
ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.07 BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.08 BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.09 CODE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 ELIGIBILITY DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.15 EMPLOYEE ROLLOVER ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.16 EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 EMPLOYER MATCHING CONTRIBUTION ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 EMPLOYER MONEY PURCHASE CONTRIBUTION ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 FORFEITURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 FORMER PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 HIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.23 HOUR OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 HOURLY EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.25 KEY-EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.26 LATE RETIREMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.27 LIMITATION YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.28 NAMED FIDUCIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.29 NORMAL RETIREMENT DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.30 PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 PERMISSIVE AGGREGATION GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.32 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.33 PLAN ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.34 PLAN YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.35 PRIOR PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.36 QUALIFIED PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.37 REQUIRED AGGREGATION GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.38 SALARIED EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.39 SEGREGATED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.40 SPECIFIED HARDSHIP WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.41 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTION
ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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1.42 TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.43 TOP-HEAVY PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.44 TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.45 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.46 TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.47 VALUATION DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1.48 VESTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.49 YEAR OF BREAK IN SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.50 YEAR OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.51 YEAR OF VESTING SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 2: ELIGIBILITY
-----------
2.01 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.02 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.03 CESSATION OF ACTIVE PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR RE-
ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.05 EFFECT OF TRANSFER FROM AFFILIATED EMPLOYER: . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 3: PARTICIPANT CONTRIBUTIONS
-------------------------
3.01 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.02 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.03 MODE OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.04 LIMITATION OF TAX-DEFERRED CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.05 CHANGE IN AMOUNT OF CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.06 VOLUNTARY SUSPENSION OF PARTICIPANT
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.07 BASIC AFTER-TAX EMPLOYEE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 4: EMPLOYER CONTRIBUTIONS
----------------------
4.01 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.02 MONEY PURCHASE CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.03 MODE OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.04 MINIMUM CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.05 APPLICATION OF FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.06 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.07 ANNUAL ADDITION LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.08 CONTRIBUTION AND BENEFIT LIMITS FOR MULTIPLE
PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 5: VALUATION OF PARTICIPANT'S ACCOUNTS
-----------------------------------
5.01 INDIVIDUAL ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.02 VALUATION OF ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.03 STATEMENT OF PARTICIPANT ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.04 INTERIM VALUATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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6.01 NORMAL RETIREMENT; EARLY RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.02 DISABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.03 DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.04 TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.05 TERMINATION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 7: DISTRIBUTIONS
-------------
7.01 PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.02 RETIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.03 DISABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.04 DEATH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.05 EMPLOYMENT TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.06 TERMINATION OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.07 METHOD AND MEDIUM OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.08 TIME OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.09 LOCATION OF PARTICIPANTS AND BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.10 PAYMENTS FOR THE BENEFIT OF INCOMPETENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 8: JOINT AND SURVIVOR ANNUITY REQUIREMENTS
---------------------------------------
8.01 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.02 QUALIFIED JOINT AND SURVIVOR ANNUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.03 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.04 DEFINITIONS: SOLELY FOR THE PURPOSE OF THIS ARTICLE 8 . . . . . . . . . . . . . . . . . . . . 38
8.05 NOTICE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.06 CASH OUT OF ANNUITY PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 9: VESTING AND WITHDRAWALS DURING EMPLOYMENT
-----------------------------------------
9.01 REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.02 FORFEITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.03 GENERAL CONDITIONS FOR WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.04 SPECIFIED HARDSHIP ACCOUNT WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE 10: TOP-HEAVY PLAN
--------------
10.01 TOP-HEAVY REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.02 TOP-HEAVY DETERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 11: PLAN ADMINISTRATION
-------------------
11.01 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.02 COMMITTEE POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.03 DESIGNATION AND ALLOCATION OF FIDUCIARY
RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.04 REVIEW OF FIDUCIARY RESPONSIBILITY DESIGNATIONS OR ALLOCATIONS . . . . . . . . . . . . . . . . 48
11.05 SERVICE IN VARIOUS CAPACITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.06 RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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11.07 COMMITTEE REPORTS TO BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.08 REVIEW OF PLAN'S FINANCIAL REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.09 PLAN ADMINISTRATOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.10 STANDARD OF CONDUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.11 CHANGES IN COMMITTEE DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.12 TRUST FUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.13 AUTHORITY OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 12: GENERAL PROVISIONS
------------------
12.01 EXCLUSIVE BENEFIT OF PARTICIPANTS AND
BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.02 INALIENABILITY OF BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.03 NO RIGHT TO EMPLOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.04 UNIFORM ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.05 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.06 USE OF PRONOUNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.07 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.08 SOURCE OF PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.09 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.10 ROLLOVERS FROM QUALIFIED PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE 13: AMENDMENTS: MERGER OR CONSOLIDATION OF PLAN:
--------------------------------------------
TERMINATION
-----------
13.01 AMENDMENTS TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.02 ELECTION OF PREAMENDMENT VESTING SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.03 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . 55
13.04 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 14: WITHDRAWAL OF AN EMPLOYER
-------------------------
14.01 EMPLOYER'S RIGHT TO WITHDRAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
14.02 TRUSTEE'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
14.03 PLAN NOT TERMINATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE 15: CLAIMS PROCEDURE
----------------
15.01 SUBMISSION OF CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
15.02 WRITTEN NOTICE OF DENIED CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
15.03 REVIEW OF DECISION DENYING CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
15.04 HEARING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
15.05 WRITTEN DECISION OF COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>
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SPRING CITY KNITTING CO., INC. RETIREMENT SAVINGS PLAN
PREAMBLE
Establishment of Plan
Effective January 1, 1980, Spring City Knitting Co., Inc. (the "Employer")
became a participating employer of the Cluett, Peabody & Co., Inc. Savings
Growth Plan for Salaried Employees (the "Prior Plan"). Effective as of
February 1, 1987, pursuant to a change of ownership and the transfer of Prior
Plan assets, the Spring City Knitting Co., Inc. Thrift Savings Plan is
established. The provisions of this Plan shall apply only to Employees (and to
their respective Beneficiaries) whose service terminates on or after February
1, 1987. The rights and benefits of any Employee (and his beneficiary) whose
employment terminated before February 1, 1987, and who is not reemployed by the
Employer on or after February 1, 1987, shall be determined in accordance with
the provisions of the Prior Plan in effect on the date his employment
terminated.
Purpose of Plan
The purpose of the Plan is to enhance the existing benefit programs of the
Employer with respect to eligible Employees and to encourage such Employees to
further their own financial independence. The Plan is designed to provide a
systematic method of savings through regular contributions by eligible
Employees. Employee contributions will be supplemented by Employer
contributions. All funds contributed will be held and disbursed pursuant to
the terms of a Trust Agreement dated the 24th day of February, 1987. It is
intended that payments made upon disability, pursuant to the terms of the Plan,
shall be deemed made under an accident and health plan within the scope of
Section 105 of the Code. The Trust Fund will be devoted to the exclusive
benefit of the participating employees and their beneficiaries, and in no event
will any part of the corpus or trust income revert to the Employer or be used
for or devoted to any other purpose.
<PAGE> 7
SPRING CITY KNITTING CO., INC. RETIREMENT SAVINGS PLAN
ARTICLE 1: DEFINITIONS
The following words and phrases as used herein shall, for the purposes of the
Plan and any subsequent amendment thereof, have the following meanings, unless
a different meaning is plainly required by the context. Wherever applicable,
the masculine pronoun shall include the feminine pronoun, and the singular
shall include the plural.
1.01 ACCRUED BENEFIT: The total aggregate dollar value of the
Participant's Accounts determined as of the applicable date.
1.02 ACCOUNTS: A Participant's Basic After-Tax Employee Contribution
Account, Basic Tax-Deferred Employee Contribution Account,
Supplemental Tax-Deferred Employee Contribution Account, Employee
Rollover Account, Employer Money Purchase Contribution Account, and
Employer Matching Contribution Account. As of the Effective Date,
the initial balance of the Participant's Basic After-Tax Employee
Contribution Account, his Basic Tax-Deferred Employee Contribution
Account and his Employer Matching Contribution Account shall
reflect the applicable dollar values transferred into the Plan from
the Prior Plan.
1.03 AFFILIATED EMPLOYER: Any company directly or indirectly controlled
by, controlling, or under common control with the Employer within
the meaning of Section 1563(a) of the Internal Revenue Code,
determined without regard to Sections 1563(b)(2)(c) and
1563(c)(3)(c) thereof.
1.04 BASIC AFTER-TAX EMPLOYEE CONTRIBUTION ACCOUNT: The value of that
portion of the Trust Fund which, with respect to any Participant,
is attributable to amounts so classified under the Prior Plan.
1.05 BASIC EARNINGS: The total of all amounts paid as salary and wages
for services rendered and labor performed by an Employee during the
taxable year of the Employer for which a contribution is made,
commencing with the Eligibility Date on which he satisfies the
requirements of Section 2.01 hereof, including overtime payments,
and inclusive of any amounts allocated under Sections 3.01 and 3.02
of the Plan and under a Section 125 Cafeteria Plan, but exclusive
of bonuses paid to Salaried Employees. Provided, however, in all
events, Basic Earnings, as defined herein, shall not include, for
any Plan Year, amounts of Compensation in excess of $200,000. The
sum
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of $200,000 shall be adjusted for increases in the cost of living
in accordance with Section 401(a)(17) of the Code and the
regulations thereunder. Such adjustment shall be effective
commencing on the first day of the Plan Year for which the
adjustment applies.
1.06 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: The value of
that portion of the Trust Fund which, with respect to any
Participant, is attributable to his Basic Tax-Deferred Employee
Contributions under the Prior Plan and under Section 3.01.
1.07 BENEFICIARY: Benefits payable in the event of death shall be made
to the Participant's surviving spouse, unless another person,
estate, or trust has been designated by the Participant with the
surviving spouse's consent, by written notice filed with the
Committee. In the absence of a surviving spouse or an effective
designation, the Beneficiary shall be the first of the following
classes of successive preference beneficiaries then surviving; the
Participant's (1) children; (2) parents; (3) brothers and sisters;
(4) estate.
1.08 BOARD: Shall mean the Board of Directors of Spring City Knitting
Co., Inc.
1.09 CODE: Shall mean the Internal Revenue Code of 1986, and any
amendments thereto.
1.10 COMMITTEE: The Retirement Savings Plan Committee appointed and
acting in accordance with Article 11.
1.11 COMPENSATION: The amount of remuneration received by an Employee
pursuant to the definition under Section 4.07(a)(iii).
1.12 EFFECTIVE DATE: The date after which the provisions of this Plan
shall be effective, which is February 1, 1987. The effective date
the Employer was a participating employer of the Prior Plan is
January 1, 1980, which shall be considered under the Code as the
original date of Qualified Plan existence for the accumulation of
Accrued Benefits on behalf of covered Participants under the Plan.
1.13 ELIGIBILITY DATE: The Effective Date of the Plan and the first day
of each July 1 and January 1 thereafter. In the case of any
Affiliated Employer which is designated as an Employer, Eligibility
Date shall also mean the effective date of such designation.
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1.14 EMPLOYEE: Any individual who is hired to perform duties for the
Employer, and subject to its control, who receives a regular stated
compensation on a salaried or hourly basis, other than a pension,
severance pay, retainer, or fee under contract. Any individual who
is covered by a collectively bargained agreement shall not be
considered an Employee for purposes of this Plan and shall not be
eligible for participation hereunder.
1.15 EMPLOYEE ROLLOVER ACCOUNT: The value of that portion of the Trust
Fund which with respect to any Participant, is attributable to
qualified Plan rollovers under Section 12.10.
1.16 EMPLOYER: Spring City Knitting Co., Inc., or any successor by
merger, purchase or otherwise with respect to its Employees, or any
Affiliated Employer which the Board shall designate as an Employer
for purposes of this Plan, upon such terms and conditions as said
Board shall determine, and with the approval of the Board of
Directors of such Affiliated Employer.
1.17 EMPLOYER MATCHING CONTRIBUTION ACCOUNT: The value of that portion
of the Trust Fund which, with respect to any Participant, is
attributable to any contributions made on his behalf by the
Employer under the Prior Plan and under Section 4.01.
1.18 EMPLOYER MONEY PURCHASE CONTRIBUTION ACCOUNT: The value of that
portion of the Trust Fund which, with respect to any Participant,
is attributable to any contributions made on his behalf by the
Employer under Section 4.02.
1.19 FORFEITURE: That portion of a Participant's Accounts which is
reallocated pursuant to Sections 7.09 and 9.02.
1.20 FORMER PARTICIPANT: A person who has been a Participant, but who
has ceased to be a Participant for any reason.
1.21 ERISA: The Employee Retirement Income Security Act of 1974. All
references to any Section of the Act shall be deemed to refer not
only to such Section but also to any successor statutory provisions
to such Section.
1.22 HIGHLY COMPENSATED EMPLOYEE means any Employee who, during the Plan
Year or the preceding Plan Year -
(a) was at any time a 5-percent owner,
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(b) received Compensation from the Employer in excess of
$75,000,
(c) received Compensation from the Employer in excess of
$50,000 and was in the top-paid 20% group of Employees for
such year, or
(d) was at any time an officer and received Compensation
greater than 150 percent of the amount in effect under
Section 415(c)(1)(A) for such year.
1.23 HOUR OF SERVICE: Each Hour for which:
(a) an Employee is paid, directly or indirectly, or entitled to
payment, for the performance of duties for his Employer
during the applicable computation period;
(b) an Employee is paid, directly or indirectly, or entitled to
payment, by his Employer on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence, except that:
(i) no more than 501 hours shall be credited to an
Employee on account of any single continuous
period during which the Employee performs no
duties (whether or not such period occurs in a
single computation period); and
(ii) no credit shall be given for any hour
attributable, directly or indirectly, to a
payment made or due under a plan maintained
solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws, or
to reimburse an Employee for medical or
medically related expenses incurred by the
Employee; and
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<PAGE> 11
(c) an Employee receives back pay, irrespective of mitigation
of damages, under an award or an agreement with his
Employer. No hour shall be credited under both this
subsection (c) and under subsection (a) or subsection (b),
as the case may be. In addition, hours credited under
subsection (b) shall be subject to the limitations set
forth in that subsection.
The special rules provided in Department of Labor Regulations
Section 2530.200b-2(b) and (c) shall be used to determine the
number of hours to be credited for periods during which no duties
are performed and for back pay awards, and the computation periods
to which they are to be credited under subsections (b) and (c).
For the purpose of this section, "compensation period" shall be the
periods referred to in Sections 1.50 and 1.51, as applicable.
1.24 HOURLY EMPLOYEE: An Employee who receives a weekly paycheck as a
result of their employment at a stated hourly wage or being paid
according to a piecework schedule.
1.25 KEY-EMPLOYEE: Shall mean any person who meets the requirements of
Section 416(i) of the Code, and the regulations promulgated
thereunder, which are hereby incorporated by reference as if fully
set out herein. For purposes of determining whether or not the
Plan meets the requirements of Section 10.02 hereof, the term
Key-Employee shall also include the Beneficiary of a Key-Employee.
A non-Key Employee is any individual who is not a Key-Employee.
1.26 LATE RETIREMENT DATE: Shall mean the date of actual retirement
upon employment severance beyond a Participant's Normal Retirement
Date.
1.27 LIMITATION YEAR: Shall mean the Plan Year.
1.28 NAMED FIDUCIARY: Shall be the Employer or such other party,
individual or otherwise, appointed by the Board hereunder.
1.29 NORMAL RETIREMENT DATE: Shall mean the attainment of age
sixty-five (65) by a Participant.
1.30 PARTICIPANT: An Active Participant as described under Article 2 or
a former Active Participant who has a positive balance in his
Accounts.
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1.31 PERMISSIVE AGGREGATION GROUP: Shall mean all plans in the Required
Aggregation Group and any other Qualified Plans maintained by the
Employer or by any member of an Affiliated Employer, but only if
such group of plans would satisfy, in the aggregate, the
requirements of Sections 401(a)(4) and 410 of the Code and
contributions or benefits in the other Qualified Plans are
comparable to contributions or benefits in the plans of the
Required Aggregation Group. The Plan Administrator shall determine
which plan or plans shall be taken into account in determining the
Permissive Aggregation Group.
1.32 PLAN: The Spring City Knitting Co., Inc. Retirement Savings Plan,
as set forth herein, and as it may be amended from time to time.
1.33 PLAN ADMINISTRATOR: (hereinafter sometimes for brevity referred to
as "Administrator") shall be the individual appointed pursuant to
Section 11.09.
1.34 PLAN YEAR: The initial Plan Year following the Effective Date
shall be from February 1, 1987 to December 31, 1987. Subsequently,
the Plan Year shall be the period of twelve (12) months beginning
on the first day of January and ending on the last day of December,
both dates inclusive.
1.35 PRIOR PLAN: The Cluett, Peabody & Company, Inc. Savings Growth
Plan for Salaried Employees, for which assets of covered Employees
were transferred into this Plan on the Effective Date.
1.36 QUALIFIED PLAN: Shall mean any Plan which is qualified under
Section 401 of the Code.
1.37 REQUIRED AGGREGATION GROUP: Shall mean:
(a) Each Qualified Plan of the Employer or any member of an
Affiliated Employer in which at least one (1) Key- Employee
participates; and
(b) Any other Qualified Plan of the Employer or any member of
an Affiliated Employer which enables a Plan described in
Section 1.37(a) hereinabove to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
1.38 SALARIED EMPLOYEE: An Employee who is compensated on a salaried
basis and who is not an Hourly Employee.
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<PAGE> 13
1.39 SEGREGATED INVESTMENT ACCOUNT: Shall mean the account maintained
for a Participant to record his Accrued Benefit which is segregated
in accordance with Article 7 upon attainment of his Normal
Retirement Date, total and permanent disability, death or upon
termination of employment.
1.40 SPECIFIED HARDSHIP WITHDRAWAL: A withdrawal necessitated by the
need of the Participant for funds to cover unusual or special costs
related to education, health or medical care, or housing
requirements. For purposes of clarification, a Specified Hardship
Withdrawal shall be allowed only for financial need arising out of
expenses incurred or assumed by a Participant:
(a) for medical care (as defined in Section 213(d) of the Code)
previously incurred by the Participant, the Participant's
spouse, or any dependents of the Participant (as defined in
Section 152 of the Code) or necessary for these persons to
obtain medical care described in Code Section 213(d);
(b) which are directly related to the purchase of a principal
residence for the Participant (excluding mortgage
payments);
(c) for the payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Participant, or the Participant's spouse, children or
dependents (as defined in Code Section 152); or
(d) which are necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
The amount withdrawn may not exceed the amount needed by the
Participant to satisfy the immediate and heavy financial need of
the Participant. A distribution will generally be treated as
necessary to satisfy an immediate and heavy financial need, unless
the Employer or the Committee have actual knowledge to the
contrary, if the Participant represents in writing that the need
cannot reasonably be relieved (a) through reimbursement or
compensation by insurance or otherwise; (b) by
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<PAGE> 14
liquidation of the Participant's assets; (c) by cessation of Basic
or Supplemental Tax-Deferred Employee Contributions; or (d) by
other distributions or nontaxable loans from any plan maintained by
the Employer or by any other employer, or by borrowing from
commercial sources on reasonable commercial terms, in an amount
necessary to satisfy the need. The Committee shall determine
whether applications for such withdrawal satisfy the definition for
Specified Hardship Withdrawal.
1.41 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: The value
of that portion of the Trust Fund which, with respect to any
Participant, is attributable to his Supplemental Tax-Deferred
Employee Contributions under Section 3.02.
1.42 TERMINATION OF EMPLOYMENT: Separation from the employment of the
Employer for any reason, including, but not limited to, retirement,
death, disability, resignation, or dismissal.
Where an Employee enters (1) upon a leave of absence approved by
his Employer and where all employees in similar circumstances will
be treated in a uniform manner or (2) upon a period of service in
the armed forces of the United States, a Termination of Employment
shall not be deemed to occur unless and until either the leave of
absence expires without immediate reemployment or the Employee
fails to return to active employment within the period during which
his right to reemployment is protected by the Selective Service Act
or any similar law then existing.
1.43 TOP-HEAVY PLAN: Shall mean the Plan, for any Plan Year in which
the Plan meets the requirements of Section 10.02 hereof.
1.44 TRUST AGREEMENT: The Trust Agreement established pursuant to
Article 11 of the Plan, which provides for the investment of all
contributions made under the Plan.
1.45 TRUSTEE: The Trustee or Trustees at any time appointed by the
Board pursuant to Article 11.
1.46 TRUST FUND: The aggregate funds held by the Trustee under the Plan
as described in Articles 11 and 14.
1.47 VALUATION DATE: The last day of each June and the last day of each
December.
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1.48 VESTED: The portion of a Participant's Accrued Benefit which is
nonforfeitable as determined in accordance with Article 9.
1.49 YEAR OF BREAK IN SERVICE: Service in a twelve (12) month period
measured from the Employee's date of employment and any anniversary
of such date during which the Employee (or former Employee) has
completed 500 or fewer hours of service. For the sole purpose of
determining whether a break in service has occurred, Hours of
Service shall also include each hour for which the employee is
compensated or entitled to compensation for reasons other than for
the performance of duties (such as for vacation, sickness, or
disability). An Employee shall not incur a Year of Break in
Service for the Plan Year in which he becomes a Participant, dies,
retires or suffers total and permanent disability (as provided
under Section 6.02). Further, solely for the purpose of
determining whether a Participant has incurred a Year of Break in
Service, Hours of Service shall be recognized for "authorized
leaves of absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military
service, or any other reason.
A "maternity or paternity leave of absence" shall mean an absence
from work for any period by reason of the Employee's pregnancy,
birth of the Employee's child, placement of a child with the
Employee in connection with the adoption of such child, or any
absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose,
Hours of Service shall be credited for the computation period in
which the absence from work begins, only if credit therefore is
necessary to prevent the Employee from incurring a Year of Break in
Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity
or paternity leave of absence" shall be those which would normally
have been credited but for such absence, or, in any case in which
the Administrator is unable to determine such hours normally
credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave
of absence" shall not exceed 501.
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1.50 YEAR OF SERVICE: Service in a twelve (12) month period measured
from the Employee's date of employment and anniversary of such date
during which the Employee has completed 1,000 or more Hours of
Service. Service for this purpose includes any Hours of Service
with an Affiliated Employer during any period of time while such
other entity was an Affiliated Employer. For purposes of
determining Years of Service, the date of employment shall be the
earlier of the date of employment with the Employer, or the date of
employment with an Affiliated Employer. The date of employment
with an Affiliated Employer shall be deemed to be the date such
entity became an Affiliated Employer, if the entity was not an
Affiliated Employer on the date the Employee commenced employment
with the entity. In addition, Hours of Service includes Hours of
Service with the Employer or an Affiliated Employer prior to the
Effective Date.
The Administrator may, in accordance with a uniform
non-discriminatory policy, elect to credit Hours of Service
pursuant to this Plan using one of the following methods:
(a) Count actual Hours of Service for which an Employee is paid
or entitled to payment;
(b) Count 190 Hours of Service for each month in which an
Employee is paid or entitled to payment for at least one
Hour of Service;
(c) Count 95 Hours of Service for each semi-monthly period in
which an Employee is paid or entitled to payment for at
least one Hour of Service;
(d) Count 45 Hours of Service for each week in which an
Employee is paid or entitled to payment for at least one
Hour of Service; or
(e) Count 10 Hours of Service for each day in which an Employee
is paid or entitled to payment for at least one Hour of
Service.
1.51 YEAR OF VESTING SERVICE: Same as Year of Service.
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ARTICLE 2: ELIGIBILITY
2.01 ELIGIBILITY: An individual shall be eligible to become a
Participant on any Eligibility Date after he has attained age 20
and completed six (6) Months of a Year of Service as an Employee.
For purposes of this Section 2.01, an Employee shall be credited
with a Month of Service for any month during which he or she
completes at least one Hour of Service (as defined in Section 1.23)
starting with the month in which he or she commences employment.
2.02 PARTICIPATION: An eligible Employee shall become an Active
Participant as of any Eligibility Date, if on or before such date
and within the time period prescribed by the Committee, the
Employee files with the Employer an enrollment form prescribed by
the Committee on which he designates the rate of his contributions,
pursuant to Sections 3.01 and 3.02, authorizes the Employer to make
payroll deductions, and makes investment elections as provided
under the Plan. An eligible Employee who does not file an
enrollment form in accordance with the preceding sentence shall
become an Active Participant on the first succeeding Eligibility
Date after the date the Employee files such enrollment form with
the Employer.
An individual who was covered under the Prior Plan shall
immediately participate under this Plan as of the Effective Date,
with his effective date of participation under the Prior Plan
considered for all purposes under this Plan and applicable
provisions of the Code.
2.03 CESSATION OF ACTIVE PARTICIPATION: An Employee shall cease to be
an Active Participant whenever any of the following occur:
(a) upon the voluntary suspension of his contributions,
pursuant to Section 3.06;
(b) upon a Year of Break in Service by the Employee;
(c) upon any change in his status as an Employee which would
make him ineligible to become or remain a Participant under
the terms of Section 2.01, including a transfer to
ineligible status or to the payroll of an Affiliated
Employer which is not a participating Employer.
Participation (but not Active Participation) shall not cease due to
(a) above or due to temporary absence from
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employment. The Employee's Participation shall continue until his
Accounts are distributed in full to him or his Beneficiary, or
until forfeited.
2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR RE-ENTRY: In the event of
reemployment after Termination of Employment, an Employee may
become an Active Participant pursuant to the following rules:
(a) If the Employee was previously a Participant in the Plan,
he may re-enter the Plan on the date of his reemployment;
(b) If the Employee terminated Employment prior to satisfying
the eligibility conditions of Section 2.01 and incurred
five (5) consecutive Years of Break in Service, he shall be
treated for all purposes as a new Employee and may enter or
re-enter the Plan on any Eligibility Date after meeting the
requirements of Section 2.01;
(c) If the Employee did not incur five (5) consecutive Years of
Break in Service, but terminated Employment prior to
becoming a Participant, he may become a Participant in the
Plan on the later of (i) the date of his reemployment, or
(ii) the Eligibility Date on which he would have become a
Participant had he not incurred the Termination of
Employment;
(d) Any other Employee shall become a Participant in the Plan
in accordance with the provisions of Section 2.01.
2.05 EFFECT OF TRANSFER FROM AFFILIATED EMPLOYER: In the event an
Employee is transferred into employment with the Employer from an
Affiliated Employer, the Employee may become an Active Participant
pursuant to the following rules:
(a) Hours of Service with the Affiliated Employer shall be
treated as Hours of Service with the Employer for purposes
of determining Months of a Year of Service under Section
2.01;
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(b) If the Employee was previously a Participant in the Plan,
he may re-enter the Plan on the date of transfer;
(c) If the Employee was transferred after completing six (6)
Months of a Year of Service (within the meaning of Section
2.01, and as modified by subsection (a), above) but before
the first Eligibility Date coincident with or next
following completion of six (6) Months of a Year of
Service, the Employee shall be entitled to enter the Plan
on the Eligibility Date coincident with or next following
completion of six (6) Months of a Year of Service; and
(d) If the Employee was transferred after completing six (6)
Months of a Year of Service (within the meaning of Section
2.01, and as modified by subsection (a), above) and after
what would have been the first Eligibility Date coincident
with or next following completion of six (6) Months of a
Year of Service, the Employee shall be entitled to enter
the Plan immediately on the date of transfer to employment
with the Employer.
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ARTICLE 3: PARTICIPANT CONTRIBUTIONS
3.01 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active Participant
may, subject to the terms and conditions of other Sections of this
Article, elect to make Basic Tax-Deferred Employee Contributions to
the Plan. The rate of such contribution shall be an integral
percentage of the Participant's Basic Earnings. The maximum rate
that may be elected shall be 15%.
3.02 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active
Participant who is making Contributions under Section 3.01 may
elect to make Supplemental Tax-Deferred Employee Contributions to
the Plan as the Plan Administrator may deem permissible in
compliance with applicable contribution limitations of the Code as
pertaining to this Qualified Section 401(k) Plan.
3.03 MODE OF PAYMENT: Employee Contributions shall be made by means of
payroll deductions for each payroll period, effective with the
first full payroll period which ends after the date on which he
becomes an Active Participant. Contributions shall be accrued by
the Employer from a Participant's Earnings at the rate designated
by the Participant, credited to the applicable Accounts by the end
of such payroll period, and paid to the Trustee promptly.
3.04 LIMITATION OF TAX-DEFERRED CONTRIBUTIONS: Basic Tax-Deferred
Employee Contributions and Supplemental Tax-Deferred Employee
Contributions during any Plan Year shall be limited by the
Committee to satisfy the requirements of this Section. First, such
Contributions shall be limited to a maximum of $7,000 in any Plan
Year. Second, all Employees who are eligible for Participation
under Article 2 shall be divided into two groups: Group 1 shall
consist of any eligible Employee who is considered to be a Highly
Compensated Employee; Group 2 shall include the eligible Employees,
none of whom are considered to be a Highly Compensated Employee. A
compensation deferral ratio shall be determined separately for
Groups 1 and 2 by averaging the ratios (calculated separately for
each Employee in the Group) of (i) the Basic Tax-Deferred Employee
Contributions and Supplemental Tax-Deferred Employee Contributions
for the Plan Year and at the option of the Employer, Matching
Contributions which are non-forfeitable and subject to the
withdrawal restrictions of Section 401(k)(2)(B) of the Code, to
(ii) the Employee's Compensation for the Plan Year.
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The compensation deferral ratio for Group 1 shall not exceed the
greater of (a) or (b) as follows:
(a) One and one-quarter (1.25) times the compensation deferral
ratio for Group 2;
(b) The compensation deferral ratio for Group 2 plus two
percent (2%), or two (2) times the compensation deferral
ratio for Group 2; whichever is less.
In accordance with rules determined at the sole discretion of the
Committee, to satisfy the conditions of this Section,
distributions, to the extent necessary, of excess Basic
Tax-Deferred Employee Contributions and Supplemental Tax-Deferred
Employee Contributions for the Plan Year (and investment thereon),
shall be made to Highly Compensated Employees for any Plan Year,
within 2-1/2 months after the close of the Plan Year. The
Committee may also impose limitations on the amount of
Contributions made pursuant to Sections 3.01 and 3.02 by any Highly
Compensated Employee at any time during the Plan Year.
3.05 CHANGE IN AMOUNT OF CONTRIBUTIONS: Subject to the provisions of
Section 3.04, a Participant may change the rate of his Basic Tax-
Deferred Employee Contributions as of any January 1 or July 1 by
giving prior written notice to the Employer on a form provided by
the Committee for such purpose.
Changes will be effective with the first full payroll period which
begins on or after the January 1 or July 1 date on which the
Participant had elected to change his Contributions.
3.06 VOLUNTARY SUSPENSION OF PARTICIPANT CONTRIBUTIONS: A Participant
may suspend his Basic or Supplemental Tax-Deferred Employee
Contributions by giving prior written notice to the Employer. A
suspension of any Basic Tax-Deferred Employee Contributions will
automatically suspend all Supplemental Tax-Deferred Employee
Contributions.
Suspension of Contributions must be for a period of at minimum to
the second succeeding applicable Eligibility Date. The Participant
may resume his Contributions as of the second succeeding
Eligibility Date after the date the suspension commenced by giving
prior written notice to the Employer.
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Written notice of suspension or resumption of Contributions shall
be on a form provided by the Committee for such purpose.
3.07 BASIC AFTER-TAX EMPLOYEE CONTRIBUTIONS: Except for the amounts so
classified under the Prior Plan, this Plan shall not accept any
voluntary after-tax contributions by Plan Participants. A
Participant may withdraw the entire amount of his Basic After-Tax
Employee Contribution Account at any time.
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ARTICLE 4: EMPLOYER CONTRIBUTIONS
4.01 MATCHING CONTRIBUTIONS: With respect to each Active Participant
who is an Hourly Employee, the Employer shall contribute to the
Plan a matching amount equal to 40% of such Active Participant's
Basic Tax-Deferred Employee Contributions (Section 3.01), if any,
limited however, to the Employee's first 5% of Basic Earnings
Contribution. Thus, the maximum Plan Year contribution under this
Section by an Employer for an Hourly Employee is 2% (i.e., 40% of
5%) of such Participant's Basic Earnings for the applicable pay
period. With respect to each Active Participant who is a Salaried
Employee, the Employer shall contribute to the Plan from its
Current or Accumulated Profits, a matching amount equal to 50% of
such Active Participant's Basic Tax-Deferred Employee Contributions
(Section 3.01), if any, limited however, to the Employee's first 6%
of Basic Earnings Contribution. Thus, the maximum Plan Year
contribution under this Section by an Employer for a Salaried
Employee is 3% (i.e., 50% of 6%) of such Participant's Earnings for
the applicable pay period. Hourly Employees, but not Salaried
Employees, shall additionally be entitled to an Employer
contribution in accordance with Section 4.02.
Contributions by each Employer with respect to Active Participants
shall be credited to each Participant's Employer Matching
Contribution Account by the end of such payroll period and paid to
the Trustee promptly.
4.02 MONEY PURCHASE CONTRIBUTIONS: The Employer shall pay to the
Trustee for each Plan Year an amount to be allocated among the
Participant Accounts of Hourly Employees who have completed 1,000
Hours of Service during such Plan Year and who were employed as of
the December 31 Plan Year end. Such amount shall be sufficient to
credit each individual's Employer Money Purchase Contribution
Account with an amount equal to the lesser of (a) 1-1/2% of the
Employee's Basic Earnings for the Plan Year, or (b) the maximum
Annual Addition allowable for the Plan Year under Section 4.07.
4.03 MODE OF PAYMENT: Employer contributions shall be made in cash.
All Employer contributions are expressly conditioned on the
qualification of this Plan under Sections 401(a) and 501(a) of the
Code and the deductibility of such contributions under Section 404
of the Code.
4.04 MINIMUM CONTRIBUTIONS: Minimum Employer contributions for a
Participant who is not a Key Employee shall be
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required under the Plan for any Plan Year in which the Plan is
determined to be a Top-Heavy Plan as follows:
(a) Notwithstanding the provisions of 4.01 and 4.02
hereinabove, for any Plan Year in which the Plan is a
Top-Heavy Plan, the total of Forfeitures and Company
contributions allocated on behalf of any Participant who is
an Employee on the last day of the Plan Year and who is not
a Key Employee shall not be less than the lesser of three
percent of such Participant's Compensation or in the case
where the Employer has no defined benefit plan which
designates this plan to satisfy section 401 of the Code,
the largest percentage of Employer contributions (inclusive
of amounts contributed to a cash or deferred Qualified Plan
under Code Section 401(k) as a result of a salary reduction
agreement) and Forfeitures, as a percentage of the first
$200,000 of the Key Employee's compensation, allocated on
behalf of any Key Employee for that year. The minimum
allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be
made even though, under other plan provisions, the
Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for
the year because of the Participant's failure to complete
1,000 hours of service. For purposes of computing the
minimum allocation, Compensation will mean Compensation as
defined in Section 4.04(d) hereunder.
(b) There shall be disregarded for purposes of this Section
4.04 any contributions attributable to Basic or
Supplemental Tax-Deferred Employee Contributions or
contributions or benefits under chapter 21 of the Code
(relating to the Federal Insurance Contributions Act),
Title II of the Social Security Act, or any other Federal
or State law.
(c) For purposes of this Section 4.04, the term "Participants"
shall be deemed to refer to all Employees who have not
separated from service at the end of the Plan Year
including, without limitation, individuals who
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declined to elect or make contributions to the Plan.
(d) For purposes of applying the limitations of this article,
compensation for a Limitation Year is the compensation
actually paid or includible in gross income during such
year.
(e) In the event the Plan is determined to be a Top-Heavy Plan
for a Plan Year, a contribution shall be allocated to an
Employee even though such Employee fails to complete one
thousand (1,000) Hours of Service during such Plan Year.
(f) Any Qualified Plan required to be included in an
Aggregation Group shall be treated as one Plan. Thus, if
the Employer maintains another Qualified Plan under Section
401(a) of the Code, only one minimum benefit, as defined in
Section 416(c) of the Code shall be included under any plan
which is part of an Aggregation Group. Such minimum
benefit shall be provided, in accordance with applicable
Code requirements, to one specific Qualified Plan which the
individual who is not a Key Employee participates under, as
designated by the Board for this purpose.
4.05 APPLICATION OF FORFEITURES: The amount of any Forfeitures under
Sections 7.09 and 9.02 shall be applied to reduce future Employer
Money Purchase Contributions under Section 4.02 as soon as
practicable after the event giving rise to the Forfeiture shall
have occurred.
4.06 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER: The following
Employer contributions may be returned to an Employer.
(a) Any contribution made by an Employer under a mistake of
fact may be returned to the Employer within one year of
payment;
(b) Any contribution which is disallowed as a deduction under
Section 404 of the Code may be returned to an Employer
within one year after disallowance.
(c) Notwithstanding anything herein to the contrary, if,
pursuant to an application filed
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by or in behalf of the Plan, the Commissioner of Internal
Revenue Service or his delegate should determine that
the Plan does not initially qualify as a tax-exempt plan and
trust under Sections 401 and 501 of the Code, and such
determination is not contested, or if contested, is finally
upheld, then the Plan shall be void ab initio and all
amounts contributed to the Plan by the Employer, less
expenses paid, shall be returned within one year and the
Plan shall terminate, and the Trustee shall be discharged
from all further obligations.
The amount which may be returned to an Employer shall not exceed
the amount of the Employer's contribution reduced by any losses
attributable to the contribution between the date of contribution
and the Valuation Date immediately preceding the date of
withdrawal. No contribution or portion of a contribution will be
returned to an Employer if the return of such amount would cause
the value of an Employer Contribution Account to be less than what
its value would have been had the contribution not been made.
4.07 ANNUAL ADDITION LIMITATIONS:
(a) The Administrator shall not allocate to a Participant's
Accounts in the Plan or any Qualified Plans of members of
an Affiliated Employer, annual additions which exceed, for
any Limitation Year of the Plan, the lesser of (1) $30,000
or (2) twenty-five percent (25%) of a Participant's
Compensation. For purposes of this Section, the following
conditions and definitions shall apply:
(i) The term "annual additions" shall mean the sum
of:
1. Employer Contributions allocated to
the Participant's Accounts under
Sections 4.01 and 4.02;
2. Basic Tax-Deferred Employee
Contributions and Supplemental
Tax-Deferred Employee Contributions
allocated to the Participant's
Accounts under Section 3.01 and 3.02;
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3. Any Forfeitures allocated to a
Participant's Accounts.
(ii) The initial Maximum Permissible Dollar Amount
shall be $30,000. The limitation shall be
adjusted automatically in accordance with
regulations issued or to be issued by the
Secretary of the Treasury as the corresponding
limitation in Section 415(c)(1)(A) of the Code
is adjusted for the cost of living in
accordance with Section 415(d) of the Code.
(iii) For purposes of this Plan and in compliance
with the provisions of Section 415 of the Code,
"Compensation" shall mean a Participant's
earned income wages, salaries, and fees for
professional services and other amounts
received for personal services actually
rendered in the course of employment with the
employer maintaining the Plan (including, but
not limited to commissions paid salesmen,
compensation for services on the basis of a
percentage of profits, commissions on insurance
premiums, tips and bonuses), and excluding the
following:
(a) Employer contributions to a plan of
deferred compensation which are not
includible in the employee's gross
income for the taxable year in which
contributed or employer contributions
under a simplified employee pension
plan to the extent such contributions
are deductible by the employee or any
distributions from a plan of deferred
compensation;
(b) Amounts realized from the exercise of
a non-qualified stock option, or when
restricted stock (or property) held by
the
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<PAGE> 28
employee either becomes freely
transferable or is no longer subject
to a substantial risk of forfeiture;
(c) Amounts realized from the sale,
exchange or other disposition of stock
acquired under a qualified stock
option; and
(d) Other amounts which received special
tax benefits, or contributions made by
the employer (whether or not under a
salary reduction agreement) towards
the purchase of an annuity described
in Section 403(b) of the Internal
Revenue Code (whether or not the
amounts are actually excludable from
the gross income of the employee).
For purposes of applying the limitations of
this article, Compensation for a Limitation
Year is the Compensation actually paid or
includible in gross income during such year.
(iv) The limitations of this Section with respect to
any Participant who at any time has been a
participant in any other defined contribution
plan maintained by the Employer or an
Affiliated Employer shall apply as if the total
benefit payable under all such defined
contribution plans in which the Participant has
been a participant were payable from one plan.
If the above limitations would be exceeded in any Plan
Year, the Committee shall take the following action in any
order prior to the end of the Plan Year to the extent
necessary to prevent the limitations from being exceeded.
(i) Discontinue or reduce Supplemental Tax-Deferred
Employee Contributions;
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<PAGE> 29
(ii) Discontinue or reduce the Basic Tax-Deferred
Employee Contributions for the remainder of the
Plan Year;
(iii) Instruct the Trustee to return all or a portion
of the Employee's Supplemental Tax-Deferred
Employee Contributions made during the Plan
Year;
(iv) Instruct the Employer to reduce or eliminate
its Employer Contributions to the Participant's
Accounts for the remainder of the Plan Year;
(v) Instruct the Trustee to return to the Employer
all or a portion thereof of the Employer
Contributions made to the Participant's
Accounts for the Plan Year;
Further provided, however, that if as a result of the
allocation of Forfeitures, a reasonable error in estimating
a participant's annual Compensation, or under other limited
facts and circumstances which the Commissioner finds
justify the availability of the rules set forth in this
subparagraph, the annual additions under the terms of a
plan for a particular participant would cause the
limitations of section 415 applicable to that participant
for the limitation year to be exceeded, the excess amounts
shall not be deemed annual additions in that limitation
year if they are treated in accordance with the following:
The excess amounts in the Participant's Account must
be allocated and reallocated to other Participants
in the Plan. However, if the allocation or
reallocation of the excess amounts pursuant to the
provisions of the Plan causes the limitations of
section 415 to be exceeded with respect to each Plan
Participant for the limitation year, then these
amounts must be held unallocated in a suspense
account. If a suspense account is in existence at
any time during a particular limitation year, other
than the limitation year
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described in the preceding sentence, all amounts in
the suspense account must be allocated and
reallocated to Participant's Accounts
(subject to the limitations of section 415) before
any Employer contributions and Employee
contributions which would constitute annual
additions may be made to the plan for that
limitation year.
The above actions shall not be considered a suspension of
Participant Contributions as provided in Section 3.06.
4.08 CONTRIBUTION AND BENEFIT LIMITS FOR MULTIPLE PLANS:
(a) Notwithstanding the foregoing, the otherwise permissible
annual addition for any Participant under this Plan may be
further reduced to the extent necessary, as determined by
the Administrator, to prevent disqualification of the Plan
under Section 415 of the Internal Revenue Code, which
imposes the following additional limitations on the
benefits payable to Participants who also may be
participating in another tax qualified pension, profit
sharing, savings or stock bonus plan of the Employer: If
an individual is a Participant at any time in both a
defined benefit plan and a defined contribution plan
maintained by the Employer, the sum of the defined benefit
plan fraction and the defined contribution plan fraction
for any Plan Year may not exceed 1.0. The defined benefit
plan fraction for any Plan Year is a fraction, the
numerator of which is the Participant's projected annual
benefit under the Plan (determined at the close of the Plan
Year) and the denominator of which is the lesser of (a)
1.25 multiplied by the larger of the $90,000 Dollar
Limitation, as adjusted, or (b) 1.4 multiplied by the 100%
of average Compensation (for highest 3 Limitation Years)
Limitation. The defined contribution plan fraction for any
Plan Year is a fraction, the numerator of which is the sum
of the annual additions to the Participant's accounts in
such Plan Year and for all prior Plan Years and the
denominator of which is the sum of the applicable maximum
accounts of annual
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<PAGE> 31
additions which could have been made under Section 415(c) of
the Internal Revenue Code for such Plan Year and for
all prior years of such Participant's employment (assuming
for this purpose, that said Section 415(c) had been in
effect during such prior years). The applicable maximum
amount for any Plan Year shall be equal to the lesser of
1.25 multiplied by the dollar limitation in effect for such
Plan Year under subsection 415(c)(1)(A) of the Internal
Revenue Code, or 1.4 multiplied by 25% of the Participant's
total annual Compensation for such Plan Year. For purposes
of this Section, Compensation shall be the amount as
determined pursuant to Section 4.07(a)(iii).
For purposes of the above limitation, all defined benefit
plans of the Employer, whether or not terminated, are to be
treated as one defined benefit plan and all defined
contribution plans of the Employer, whether or not
terminated, are to be treated as one defined contribution
plan. The extent to which the benefit payable under this
Plan shall be reduced as compared with the extent to which
the annual benefit under any other defined benefit plans or
defined contribution plans shall be reduced in order to
achieve compliance with the limitations of Section 415 of
the Code shall be determined by the Plan Administrator in
such a manner so as to maximize the aggregate benefits
payable to such Participant. If such reduction is under
this Plan, the Plan Administrator shall advise affected
Participants of any additional limitation on their annual
benefits required by this paragraph.
(b) For purposes of this Section, the Thirty Thousand Dollar
($30,000) limitation and the Ninety Thousand Dollar
($90,000) limitation set forth herein above shall be
adjusted annually for increases in the cost of living in
accordance with regulations prescribed by the Secretary of
the Treasury or his delegate. Such adjustments shall be
effective for the first day of the Plan Year for which the
adjustment applies.
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<PAGE> 32
(c) Notwithstanding anything in this Section to the contrary,
and, except as provided in subsection (d) of this Section,
for any Plan Year in which the Plan is determined to be a
Top-Heavy Plan, this section shall be applied by
substituting the number "1.00" for the number "1.25"
wherever it appears herein, except that such substitution
shall not have the effect of reducing any benefit accrued
under a defined benefit plan prior to the first day of the
Plan Year in which this (c) subsection becomes applicable.
(d) The requirement of Section 4.08(c) hereinabove shall not
apply to the Plan if:
(i) "Ninety percent (90%)" is substituted for "sixty
percent (60%)" in Section 10.02 hereof, and the
Plan, if after taking into account this
modification, would not be a Top-Heavy Plan as
determined thereunder; and
(ii) Section 4.04(a) of the Plan is applied by
substituting "four percent (4%)" for "three
percent (3%)" wherever it appears therein.
(e) The above limitations are intended to comply with the
provisions of Section 415 of the Internal Revenue Code, as
amended, so that the maximum benefits provided by plans of
the Employers shall be exactly equal to the maximum amounts
allowed under Section 415 of the Internal Revenue Code and
regulations thereunder. If there is any discrepancy
between the provisions of this Section 4.08 and the
provisions of Section 415 of the Internal Revenue Code and
regulations thereunder, such discrepancy shall be resolved
in such a way as to give full effect to the provisions of
Section 415 of the Code.
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ARTICLE 5: VALUATION OF PARTICIPANT'S ACCOUNTS
5.01 INDIVIDUAL ACCOUNTS: Each Participant shall have established for
him separate accounts for each of the Investment Funds (including
segregated and non-segregated Accounts), as authorized by the
Trustees pursuant to the Trust Agreement, in which he participates
pursuant to an investment election among such Funds, in 25%
increments, on a form approved for this purpose by the Committee.
Such Investment Funds shall reflect all amounts contributed by the
Participant and by the Employer on his behalf and the investment
accretions thereon. A Participant may change his Investment Fund
election, in 25% increments, as of any January 1 or July 1.
5.02 VALUATION OF ACCOUNTS: As of each Valuation Date, the Accounts of
each Participant shall be adjusted separately for each of the
Investment Funds to reflect any appreciation or depreciation in the
fair market value of the Funds and income earned by the Funds. The
Administrator shall determine the earnings, losses and increases or
decreases in the fair market value of the Trust Fund since the
immediately preceding Valuation Date, or in the case of the first
Valuation Date of the Plan, since the Effective Date of the Plan.
Such earnings, losses and increases or decreases, shall be
allocated to the appropriate Fund of all Participants, including
former Participants who have terminated employment, but who have a
balance in their Fund Accounts as of such Valuation Date. At his
sole discretion, the Administrator may adjust in an equitable
fashion, the Accounts of any Participant entitled to a Plan
distribution on a non-Valuation Date.
5.03 STATEMENT OF PARTICIPANT ACCOUNTS: As soon as practicable after
each Valuation Date, an individual statement will be issued to each
Participant showing the value of his Accounts.
5.04 INTERIM VALUATION: In the event a Plan distribution is made on a
date which does not coincide with the Valuation Date, an interim
valuation adjustment shall be made to the date of such distribution
to reflect the estimated investment earnings on the Participant's
Accounts since the most recent Valuation Date. This adjustment
shall be calculated by the Plan Administrator in a
non-discriminatory and uniform manner.
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ARTICLE 6: BENEFITS UPON RETIREMENT, DEATH, DISABILITY,
OR TERMINATION
6.01 NORMAL RETIREMENT; EARLY RETIREMENT: A Participant who attains his
Normal Retirement Date or elects Early Retirement shall be fully
Vested in his Accrued Benefit. If a Participant terminates
employment upon attainment of his Normal Retirement Date or elects
Early Retirement, his Accrued Benefit shall be segregated into his
Segregated Investment Account, the balance of which shall be paid
to such Participant as his benefit hereunder in accordance with the
provisions of Article 7. The election of Early Retirement is
permissible provided the Employee has attained age 55.
6.02 DISABILITY: If a Participant, while an Employee, becomes totally
and permanently disabled prior to his Normal Retirement Date, he
shall be fully Vested in his Accrued Benefit. Upon termination of
employment, his Accrued Benefit shall be segregated into his
Segregated Investment Account, the balance of which shall be paid
to such Participant as his disability benefit hereunder, in
accordance with the provisions of Article 7.
For all purposes under this Plan, a Participant shall be deemed to
be totally and permanently disabled, if, in the opinion of the
Administrator, he will be totally unable, due to physical or mental
disability, ever to discharge or to resume full duties of the same
general nature as those which he performed immediately prior to
such disability provided that: (a) such disability did not arise
while engaged in or as a result of having engaged in a wrongful,
illegal or criminal act, or an act contrary to the best interest of
an Employer; or (b) such disability did not result from habitual
drunkenness or addiction to narcotics or any intentionally
self-inflicted injury.
To aid the Administrator in determining whether such disability
exists, the Administrator may require as a condition precedent to
the receipt of any benefits hereunder, that the Employee submit to
examination by one or more duly licensed and practicing physicians.
The Administrator shall have the right from time to time to have
medical examinations made by a duly licensed physician or
physicians to determine whether such disability is continuing, and
the degree thereof, and to ascertain from the Participant by
warranties or otherwise the extent to which he has had his earning
power restored and upon such findings to discontinue the payments
being made. If the disabled Participant refuses to submit to
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<PAGE> 35
such physical examination or to give any other information
requested, the Administrator shall have the power to suspend or
withhold payment of any benefit until the Participant does so
submit or comply. The Administrator shall have the sole discretion
to determine whether the Participant is totally disabled, based
upon physical examinations and statements of the Participant. The
Administrator shall have the right to accept evidence for the
purpose of determining whether the Participant is still eligible to
receive any disability payments and to act upon such evidence.
6.03 DEATH: If a Participant shall die while he is an Employee before
reaching his Normal Retirement Date or after reaching his Normal
Retirement Date, but before payment of his Accrued Benefit, such
Participant shall be fully Vested in his Accrued Benefit. As
promptly as possible, but in no event later than ninety (90) days
following the Valuation Date of the Plan Year in which death
occurs, his Accrued Benefit shall be segregated into his Segregated
Investment Account, the balance of which shall be paid to his
Beneficiary as provided in Article 7.
6.04 TERMINATION OF EMPLOYMENT: Upon Termination of a Participant other
than by Retirement, Death or Disability, the Administrator shall,
upon the election of the Participant, direct the Trustee to pay to
such Participant his Vested Accrued Benefit, under one or more of
the options set forth in Section 7.07. The Administrator shall
direct that payment be made or commencement of payment begin as of
the later of the date elected by the Participant, or as soon as is
administratively feasible.
If an Employee terminates service, and receives the value of the
employee's Vested Accrued Benefit, the nonvested portion will be
treated as a Forfeiture.
If an Employee receives a distribution pursuant to this section
which is less than the value of the Employee's Accrued Benefit, and
resumes employment covered under this Plan, the Employee's Accrued
Benefit will be restored to the amount on the date of distribution
if the Employee repays to the Plan the full amount of the
distribution within five (5) years following his date of
reemployment.
6.05 TERMINATION OF PLAN: Upon the complete termination or partial
termination of the Plan or upon the complete discontinuance of
Regular Contributions to the Trust Fund pursuant to the terms of
the Plan, each affected
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<PAGE> 36
Participant shall be fully Vested in his Accrued Benefit. Upon
termination of the Plan or complete discontinuation of
contributions, his Accrued Benefit shall be segregated into his
Segregated Investment Account, the balance of which shall be paid
to such Participant as his benefit hereunder and in accordance with
the provisions of Article 7.
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ARTICLE 7: DISTRIBUTIONS
7.01 PARTICIPANT'S RIGHTS: Except as provided in Article 9 and Section
3.07, a Participant shall not have a right to receive his Accrued
Benefit or any of the assets held in the Trust Fund except in
accordance with the terms and provisions of this Article 7.
7.02 RETIREMENT:
(a) When a Participant reaches his Normal Retirement Date and,
upon attainment of his Normal Retirement Date, or Late
Retirement Date, ceases to be an Employee, or if the
Participant elects Early Retirement, the Administrator
shall direct the Trustee to pay to such Participant his
Accrued Benefit under one of the options set forth in
Section 7.07(a), and no later than the time prescribed in
Section 7.08.
(b) A Participant who remains employed by the Employer beyond
his Normal Retirement Date shall continue to participate
under the Plan until his actual retirement from the employ
of the Employer, at which time the Administrator shall
direct the Trustee to pay the Accrued Benefit to such
Participant under one of the options set forth in Section
7.07(a).
7.03 DISABILITY: In the event a Participant becomes totally and
permanently disabled, as defined hereinabove in Section 6.02, prior
to reaching his Normal Retirement Date, the Administrator shall
direct the Trustee to pay to such Participant his Accrued Benefit
under one of the options set forth in Section 7.07(a).
7.04 DEATH: Upon the death of a Participant or former Participant
before or after his Normal Retirement Date, the Administrator shall
direct the Trustee to pay to the surviving Beneficiary of such
Participant his Accrued Benefit under one of the options set forth
in Section 7.07. The Administrator may require such proper proof
of death and such evidence of the right of any person to receive
payment of the Accrued Benefit of the deceased Participant or
former Participant, as the Administrator may deem desirable. The
Administrator's determination of death and of the rights of any
person to receive payment shall be conclusive.
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<PAGE> 38
7.05 EMPLOYMENT TERMINATION: Upon Termination of a Participant other
than by Retirement, Death or Disability, the Administrator shall,
upon the election of the Participant, direct the Trustee to pay to
such Participant his Vested Accrued Benefit, under one or more of
the options set forth in Section 7.07. The Administrator shall
direct that payment be made or commencement of payment begin as of
the later of the date elected by the Participant, or as soon as is
administratively feasible. If following employment termination, a
Participant's Vested Accrued Benefit is less than $3,500, such
value may be immediately distributable by the Plan Administrator to
the Participant without consent of such Participant. If a
Participant's Vested Accrued Benefit exceeds $3,500, consent of the
Participant is required for such an immediate distribution.
If a Participant receives a distribution pursuant to this Section
of his Vested Accrued Benefit which is less than the full value of
his Accrued Benefit, and thereafter resumes employment covered
under this Plan, the Participant's Accounts will be restored to the
amount on the date of distribution if the Participant repays to the
Plan the full amount of the distribution within five (5) years
following his date of reemployment.
7.06 TERMINATION OF PLAN: Upon the complete termination or partial
termination of the Plan or upon the complete discontinuance of
contributions under the Plan, the Administrator shall direct the
Trustee to pay to a Participant his Accrued Benefit as provided in
Section 13.04.
7.07 METHOD AND MEDIUM OF PAYMENT:
(a) Subject to the requirements of Article 8, when a
Participant terminates his employment with the Employer,
either upon retirement, disability, or for any reason other
than death, or upon the termination of the Plan, as may be
provided under Section 13.04, the Administrator shall
direct the Trustee to pay the Accrued Benefit of such
Participant under any one of the following options as
determined by the Participant:
(i) In one lump sum.
(ii) In periodic payments of substantially equal
amounts for a specified number of years, not in
excess of fifteen (15).
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Notwithstanding the preceding, however, in the
event a Participant defers the commencement
of Plan benefits beyond his Normal Retirement
Date, the applicable 15 year restriction shall be
further reduced so that no payment is scheduled
to be payable beyond the limiting age of 80.
Such periodic payments shall be made not less
frequently than annually. If this option is
selected, the amount of Accrued Benefits shall be
segregated and placed in a Segregated
Investment Account in the name of the Trustee in
trust for said Participant. Interest on the
Segregated Investment Account shall be
distributed at least annually to the Participant
(or to his Beneficiary or Beneficiaries, as the
case may be), which could take the form of equal
periodic distributions.
(iii) In a Qualified Joint and Survivor Annuity (as
defined in Section 8.04(d)), if married; or, in
a life annuity, if single.
(b) Subject to the requirements of Article 8, in the event of
the death of a Participant, the Plan Administrator shall
direct the Trustee to pay the Participant's Accrued Benefit
to the Participant's Beneficiary, within five (5) years of
the Participant's death. If, however, the Trustee has
already commenced payment of the Participant's Accrued
Benefit under Section 7.07(a)(ii) hereof, the Trustee shall
continue the payments in accordance with the period certain
without regard to the five (5) year distribution
requirement of the immediately preceding sentence. The
5-year distribution requirement of this Section shall not
apply to any portion of the deceased Participant's interest
which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion may be
distributed over the life of such designated Beneficiary
(or over a period not extending beyond the life expectancy
of such designated Beneficiary) provided such distribution
begins not later than one (1) year after the date of the
Participant's death (or such later date as may be
prescribed by Treasury regulations).
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Except, however, in the event the Participant's spouse is
his Beneficiary, the requirement that distributions
commence within one year of a Participant's death shall not
apply. In lieu thereof, such distribution must commence no
later than the date on which the deceased Participant would
have attained age seventy and one-half (70-1/2). If the
surviving spouse dies before the distributions to such
spouse begin, then the 5-year distribution requirement of
this Section shall apply as if the spouse were the
Participant.
For the purposes of this Section, the life expectancy of a
Participant's spouse (other than in the case of a life
annuity) may be redetermined, but not more frequently than
annually and in accordance with such rules as may be
prescribed by Treasury regulations. Further, life
expectancy and joint and last survivor expectancy shall be
computed using the return multiples of Regulation 1.72-9.
7.08 TIME OF PAYMENT:
(a) Except as provided in Section 7.08(b) hereinbelow, payment
of a Participant's Vested Accrued Benefits must commence
not later than the sixtieth (60th) day after the close of a
Plan Year in which the latest of the following events
occurs:
(i) The attainment by the Participant of his Normal
Retirement Date.
(ii) Termination of employment by the Participant.
(b) Notwithstanding the provisions of Subsection (a)
hereinabove, payment of Vested Accrued Benefits under the
Plan shall commence not later than the April 1 of the
calendar year following the calendar year in which the
Participant attains age seventy and one-half (70-1/2).
7.09 LOCATION OF PARTICIPANTS AND BENEFICIARIES: It shall be the duty
of a Participant who has terminated employment to keep the
Administrator informed as to his correct address, and it shall be
the duty of the Administrator to use reasonable diligence to locate
and to pay Participants who have terminated employment when any
payment
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<PAGE> 41
becomes due. In the event a Participant becomes entitled to a
benefit, other than a death benefit, but the Administrator is
unable to locate such Participant within one (1) year from the date
upon which he becomes so entitled, the Administrator may either (i)
direct the Trustee to distribute the benefits in question to an
interest bearing savings account established in the name of the
Participant to be held for distribution upon later location of the
Participant, or (ii) direct that such benefits be immediately paid
to the Beneficiary of such Participant. If such Beneficiary cannot
be located by the Administrator within one (1) year from the date
such Beneficiary becomes entitled to such benefit, or within one
(1) year from the date such Beneficiary becomes entitled to a death
benefit, payment of such benefit may be made to the Beneficiary
next in order as listed in Section 1.06 hereof.
In such event, a receipt or receipts signed by any one or more of
said Beneficiaries or other proofs of such payment shall be
conclusive evidence that all such payments have been made to the
proper party or parties and discharge all right or rights of
interest in such payment or in the trust of anyone claiming through
or under such Participant. If no Beneficiary listed in Section
1.07 hereof can be located within one (1) year from the date such
Beneficiaries listed in Section 1.06 hereof become entitled to such
benefit, such benefit may be considered forfeited and the
Administrator may, in its sole discretion, treat such benefit as a
Forfeiture as if such terminated or deceased Participant had
terminated employment on the last day of the one (1) year period
specified in this Section. In the event that such Participant,
Beneficiary or Beneficiaries are located at any future time, the
Administrator shall instruct the Employer to make an additional
contribution in the amount originally forfeited, such amount to
then be paid to such Participant, Beneficiary or Beneficiaries.
7.10 PAYMENTS FOR THE BENEFIT OF INCOMPETENTS: If the Administrator
receives evidence that (a) a Participant or Beneficiary entitled to
receive any payment under the Plan is a minor or is otherwise
physically or mentally incompetent to receive such payment and to
give a valid release therefor, and (b) another person or
institution is then maintaining or has custody of such person, and
no guardian, committee or other representative of the estate of
such person has been duly appointed by a court of competent
jurisdiction, payment may be made to such other person or
institution, and the release of such
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<PAGE> 42
other person or institution shall be valid in a complete discharge
for the payment.
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<PAGE> 43
ARTICLE 8: JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.01 The provisions of this Article shall apply to any Participant who
is married to the same individual throughout the 1-year period
ending on the earlier of the Participant's Annuity Starting Date or
the date of the Participant's death, and such provisions shall take
precedence over any conflicting provisions in this Plan.
8.02 QUALIFIED JOINT AND SURVIVOR ANNUITY: Unless an optional form of
benefit is selected pursuant to a qualified election within the
90-day period ending on the date benefit payments would commence, a
married Participant's vested account balance will be paid in the
form of a Qualified Joint and Survivor Annuity and an unmarried
Participant's vested account balance will be paid in the form of a
life annuity.
8.03 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY: Unless an optional form
of benefit has been selected within the election period pursuant to
a qualified election, if a Participant dies before benefits have
commenced, then the Participant's vested account balance shall be
applied toward the purchase of an annuity for the life of the
surviving spouse. The surviving spouse may elect to have such
annuity distributed immediately.
8.04 DEFINITIONS: SOLELY FOR THE PURPOSE OF THIS ARTICLE 8:
(a) Election Period: The period which begins on the first day
of the Plan Year in which the Participant attains age 35
and ends on the date of the Participant's death. If a
Participant separates from service prior to the first day
of the Plan Year in which age 35 is attained, with respect
to the balance in the Participant's Participant Account as
of the date of separation, the election period shall begin
on the date of separation.
(b) Earliest Retirement Age: The earliest date on which under
the Plan the Participant could elect to receive retirement
benefits.
(c) Qualified Election: A waiver of a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Survivor
Annuity. The waiver must be in writing and must be
consented to by the Participant's spouse. The spouse's
consent to a waiver must be witnessed by a plan
representative or notary public and
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<PAGE> 44
must be limited to a benefit for a specific alternate
beneficiary. Notwithstanding this consent
requirement, if the Participant establishes to the
satisfaction of a plan representative that such written
consent may not be obtained because there is no spouse or
the spouse cannot be located, a waiver will be deemed a
qualified election. Any consent necessary under this
provision will not be valid with respect to any other
spouse. Additionally, a revocation of a prior waiver may be
made by a Participant without the consent of the spouse at
any time before the commencement of benefits. The number of
revocations shall not be limited. Any new waiver or change
of beneficiary will require a new spousal consent, and such
consent shall be required for a Participant's election of a
non-spouse beneficiary.
(d) Qualified Joint and Survivor Annuity: An annuity for the
life of the Participant with a survivor annuity for the
life of a spouse which is not less than fifty percent and
not more than one-hundred percent of the amount of the
annuity which is payable during the joint lives of the
Participant and the spouse and which is the amount of
benefit which can be purchased with the Participant's
vested account balance.
(e) Spouse (Surviving Spouse): The spouse or surviving spouse
of the participant, provided that a former spouse will be
treated as the spouse or surviving spouse to the extent
provided under a qualified domestic relations order, within
the meaning of Code Section 414(p).
(f) Annuity Starting Date: The first day of the first period
for which an amount is received as an annuity (whether by
reason of retirement or disability).
8.05 NOTICE REQUIREMENTS:
(a) In the case of a Qualified Joint and Survivor Annuity as
described in Article 8.04(d), the Plan Administrator shall
provide each Participant within a reasonable period prior
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<PAGE> 45
to the commencement of benefits with a written explanation
of: (1) the terms and conditions of a Qualified Joint
and Survivor Annuity; (2) the Participant's right to make
and the effect of an election to waive the Qualified Joint
and Survivor Annuity form of benefits; (3) the rights of a
Participant's spouse; and (4) the right to make, and
the effect of, a revocation of a previous election to waive
the Qualified Joint and Survivor Annuity.
(b) In the case of a qualified preretirement survivor annuity
as described in Article 8.03, the Plan Administrator shall
provide each Participant within the period beginning on the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year in which
the Participant attains age 34, a written explanation of a
qualified preretirement survivor annuity in such terms and
in such manner as would be comparable to the explanation
provided for meeting the requirements of Article 8.05(a)
applicable to a Qualified Joint and Survivor Annuity. If a
Participant enters the Plan after the first day of the Plan
Year in which the Participant attained age 32, the plan
administrator shall provide notice no later than the close
of the third plan year succeeding the entry of the
Participant in the Plan.
(c) Notwithstanding the other requirements of this Article
8.05, the respective notices prescribed by this section
need not to be given to a Participant if his or her plan
"fully subsidizes" the costs of a Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor
Annuity and the Participant cannot elect another form of
benefit. For purposes of this Article 8.05(c), a plan
fully subsidizes the cost of a benefit if under the plan
the failure to waive such benefits by a Participant would
not result in a decrease in any Plan benefit with respect
to such Participant and would not result in increased
contributions from the Participant.
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<PAGE> 46
8.06 CASH OUT OF ANNUITY PAYMENTS: The present value of a Qualified
Joint and Survivor Annuity or a Qualified Preretirement Survivor
Annuity shall be distributed immediately upon the earlier of the
Participant's Annuity Starting Date or the date of the
Participant's death provided the value of such annuity does not
exceed $3,500. No such distribution may be made after the Annuity
Starting Date unless the Participant and his or her spouse (or
surviving spouse in the event of the Participant's death) consents
in writing to such distribution. The Plan may distribute
immediately the present value of either a Qualified Joint and
Survivor Annuity or a Qualified Preretirement Annuity exceeding
$3,500 only if the Participant and his or her spouse (or surviving
spouse) consent in writing to said distribution. For purposes of
this Article 8.06, the present value of an annuity shall be
determined as of the date of distribution and by using an interest
rate not greater than the interest rate which would be used as of
such date by the Pension Benefit Guaranty Corporation for purposes
of determining the present value of a lump sum distribution on plan
termination.
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<PAGE> 47
ARTICLE 9: VESTING AND WITHDRAWALS DURING EMPLOYMENT
9.01 REQUIREMENTS:
(a) A Participant's rights to his Basic After-Tax Employee
Contribution, Basic Tax-Deferred Employee Contribution, and
Supplemental Tax-Deferred Employee Contribution Accounts
shall be fully vested (100%) and nonforfeitable at all
times.
(b) For any Participant who is not considered a Highly
Compensated Employee, the Participant's Accrued Benefits
derived from Employer contributions to his
Employer-Matching Contribution Account shall be fully
vested (100%) and nonforfeitable at all times. For any
Participant who is considered to be a Highly Compensated
Employee, the Participant's Accrued Benefit derived from
Employer contributions to his Employer Matching
Contribution Account shall be 50% vested after completion
of one (1) Year of Vesting Service and fully vested (100%)
and nonforfeitable upon the earlier of: (1) attainment of
Normal Retirement Date or election of Early Retirement in
accordance with Section 6.01, (2) total and permanent
disability, (3) death, or (4) completion of two (2) Years
of Vesting Service.
(c) A Participant's Accrued Benefit derived from Employer
contributions to his Employer Money Purchase Contribution
Account shall be fully vested (100%) upon the earlier of:
(1) attainment of Normal Retirement Date or election of
Early Retirement in accordance with Section 6.01, (2) total
and permanent disability, or (3) death.
(d) In the event the employment of a Participant is terminated,
whether voluntarily or involuntarily, with or without cause
on his part, prior to his Normal Retirement Date, for any
reason other than death or permanent and total disability,
a Participant shall have an interest in his Accrued Benefit
derived from Employer contributions to his Employer Money
Purchase Contribution Account in accordance with the
following Vested Percentage such Participant has accrued:
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<PAGE> 48
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage
------------------------ -----------------
<S> <C>
less than 4 0%
4 40%
5 100%
</TABLE>
(e) Notwithstanding the provisions of subsection (d)
hereinabove, for any Plan Year in which the Plan is a Top-
Heavy Plan, a Participant's Vested Percentage in his
Accrued Benefit derived from Employer contributions to his
Employer Contribution Money Purchase Account shall not be
less than the percentage determined in the following table:
<TABLE>
<CAPTION>
Years of Vesting Service Vested Percentage
------------------------ -----------------
<S> <C>
0-1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
</TABLE>
9.02 FORFEITURES: Upon employment termination, a Participant's Accrued
Benefit derived from Employer contributions to his Employer Money
Purchase Contribution Account shall be forfeited, to the extent
that such Participant does not have a Vested interest in his
Accrued Benefit according to Section 9.01(d).
9.03 GENERAL CONDITIONS FOR WITHDRAWALS: Subject to the conditions set
forth in Sections 3.07 and 9.04, upon written notice to his
Employer on a form provided by the Committee for such purpose, a
Participant may make withdrawals from his Accounts.
All amounts withdrawn must be paid in cash. In the case of a
partial withdrawal under this Article by a Participant having an
interest in more than one Investment Fund, the amount withdrawn
from each Fund shall be as designated by the Participant.
9.04 SPECIFIED HARDSHIP ACCOUNT WITHDRAWAL: A Participant may apply for
a Specified Hardship Withdrawal. Under such a withdrawal, the
Committee may permit the Participant to withdraw all or a portion
(but not to exceed the amount of financial hardship) of his Basic
Tax-Deferred Employee Contribution Account, and Supplemental
Tax-Deferred Employee Contribution Account.
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<PAGE> 49
The value of the Accounts for purposes of this Section shall be
determined as of the Valuation Date first preceding the date on
which the Committee approves the withdrawal. The value shall
additionally include Basic Tax-Deferred, and Supplemental Tax-
Deferred Employee Contributions made since the applicable Valuation
Date and shall reflect the amount of any withdrawals made by the
Participant since the Valuation Date.
Not more than one withdrawal may be made under this Section during
any Plan Year.
A Participant who has made a withdrawal under this Section shall
not forfeit any part of his Employer Money Purchase Contribution
Account, except as provided upon eventual Termination of
Employment.
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<PAGE> 50
ARTICLE 10: TOP-HEAVY PLAN
10.01 TOP-HEAVY REQUIREMENTS: For any Plan Year in which the Plan is
determined to be a Top-Heavy Plan as determined in accordance with
Section 10.02 hereof, the Plan shall provide the special minimum
allocation requirements of Section 416(c) of the Code as set forth
in Section 4.04 of the Plan.
10.02 TOP-HEAVY DETERMINATION:
(a) The Plan shall be considered a Top-Heavy Plan and shall be
subject to the additional requirements of Section 10.01
hereinabove, with respect to any Plan Year, if, as of the
Valuation Date of the preceding Plan Year or in the case of
the first Plan Year, the Valuation Date of such Plan Year
(hereinafter referred to as the "Determination Date")
either:
(i) the Sum of the Value of the Aggregate Accounts
of Key-Employees exceeds sixty percent (60%) of
a similar sum determined for all Employees (the
"60% Test"); or
(ii) the Plan is part of a Required Aggregation
Group, and the sum of the Present Value of
Accrued Benefits and the Value of the Aggregate
Accounts of Key-Employees in all Plans in such
Group exceeds sixty percent (60%) of a similar
sum determined for all Employees.
(b) For purposes of this Section 10.02, the Aggregate Account
of an Employee as of the Determination Date is equal to a
Participant's Accounts as of the Determination Date
adjusted for any contributions due as of the Determination
Date, and further adjusted by including any Plan
distributions made within the Plan Year that includes the
Determination Date or within the preceding four (4) Plan
Years. Notwithstanding anything herein to the contrary,
all distributions, including distributions made prior to
January 1, 1984, and distributions under a terminated plan
which if it had not been terminated
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<PAGE> 51
would have been required to be included in a Required or a
Permissive Aggregation Group, will be counted.
(c) For purposes of this Section, Present Value of Accrued
Benefits shall be determined, in the case of a defined
benefit pension plan, under the provisions of such a plan
or plans.
(d) Notwithstanding the provisions of subsection (a)
hereinabove, the Plan shall not be a Top-Heavy Plan, if the
Administrator elects to treat the Plan as part of a
Permissive Aggregation Group, and the Permissive
Aggregation Group is not determined to be Top-Heavy using
the criteria of the "60% Test" hereinabove.
(e) Only those plans in which the Determination Dates fall
within the same Plan Year shall be included in a Required
or a Permissive Aggregation Group in order to determine
whether the Plan is a Top-Heavy Plan.
(f) For Plan Years beginning after December 31, 1984, if a
Participant or Former Participant has not been credited
with at least one Hour of Service from any Employer
maintaining the Plan (other than benefits under the Plan)
at any time during the five year period ending on the
Determination Date, the Aggregate Accounts and/or Present
Value of Accrued Benefits for such Participant or Former
Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top heavy
Plan.
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<PAGE> 52
ARTICLE 11: PLAN ADMINISTRATION
11.01 COMMITTEE: The Board shall appoint a Retirement Savings Plan
Committee consisting of not less than three persons. Such persons
shall jointly have the authority to control and manage the
operation and administration of the Plan (but shall not have
authority to control and manage the assets of the Plan, which
authority is reserved for the Trustee under Section 11.13). All
members of the Committee shall be appointed for a term of one year,
continuing thereafter on a year-to-year appointment or until their
successors have been appointed. Persons appointed to the Committee
shall indicate their willingness to serve by filing a written
consent with the Board. Committee members may resign upon 45 days'
written notice to the Board (or on such shorter notice as is
acceptable to the Board) and may be removed by the Board during
their term of office only if, in its sole discretion, the Board
should determine that the member has failed to or is unable to
perform the duties of the office in an efficient manner. The Board
shall have the power to fill vacancies on the Committee created by
resignation, removal, disability, or death.
11.02 COMMITTEE POWERS: The Committee shall have the power to construe
and interpret the provisions of the Plan; to determine any
questions of fact under the Plan, including questions relating to
eligibility, earnings, service, entitlement to benefits, and the
form of benefits, of any person under the Plan; and to exercise its
discretion with respect to all matters reserved for the Committee
or the Employer under the Plan but excluding, however, any matters
relating to (i) the Trustee(s) or the Trust Agreement and the
amendment, modification or termination thereof; (ii) the amendment
or termination of the Plan. Such matters are reserved to and
specifically require action by the Board; and the Committee shall
have no obligation or responsibility with respect to such matters.
11.03 DESIGNATION AND ALLOCATION OF FIDUCIARY RESPONSIBILITIES: The
Committee shall have the power to designate one or more persons,
other than members of the Committee, to carry out fiduciary
responsibilities under the Plan (other than trustee
responsibilities defined in ERISA section 405(c)(3)). Any such
designation shall be in writing, naming the person so designated
and describing the terms of the delegation and the fiduciary
responsibility so allocated and such designation shall be accepted
in writing by the person so designated. Each such designation or
allocation shall provide that it is
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<PAGE> 53
terminable by the Committee upon reasonable notice to the person so
designated. Without limiting the Committee's authority to
designate and allocate, the Committee may delegate to one or more
persons the authority: (a) to determine the amount of the benefits
due to any person; (b) to maintain books and records of the Plan
and accounts necessary to show the fiscal transactions of the Plan;
(c) to order, direct or authorize the distribution of Plan benefits
to any person, and to determine their form; and (d) to prepare,
furnish and hold such forms as are necessary in the operation of
the Plan, including without limitation, beneficiary designation and
option elections.
11.04 REVIEW OF FIDUCIARY RESPONSIBILITY DESIGNATIONS OR ALLOCATIONS:
Each designation or allocation made under Section 11.03 shall also
provide that the Committee shall meet periodically with the person
or persons to whom the delegation was made to review the
performance of the person to whom duties have been delegated. This
review, which may be conducted by all Committee members or by a
designated review subcommittee, will permit the Committee to
determine whether or not it should continue the allocation or
designation.
11.05 SERVICE IN VARIOUS CAPACITIES: Any person may serve as a fiduciary
(within the meaning of ERISA) in addition to being an officer,
employee, agent or other representative of a party-in-interest, and
any person or persons may serve in more than one fiduciary capacity
with respect to the Plan, including service as a member of the
Committee, Administrator, or Trustee.
11.06 RULES AND REGULATIONS: The Committee shall have the power to
establish rules and regulations for the Plan as well as for the
conduct of its affairs, including without limitation, selecting a
Chairman, a Secretary (who need not be a Committee member), and
subcommittees with such powers as the Committee shall determine,
and authorizing one or more members of the Committee to sign any
document, instrument or order on behalf of the Committee. The
Committee is authorized to employ or retain actuaries, accountants,
counsel and other consultants and to employ clerical help to advise
and/or assist the Committee in fulfilling its responsibilities
under the Plan, under ERISA, or under the Code. The reasonable
fees of such consultants and/or other expenses of the Committee
shall be paid by the Employer. The members of the Committee shall
serve without compensation.
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<PAGE> 54
11.07 COMMITTEE REPORTS TO BOARD: The Committee shall report at least
annually to the Board (or a specially appointed review subcommittee
of the Board) to permit the Board to review the performance of the
Committee and of the person or persons to whom the Committee has
delegated and allocated fiduciary responsibilities.
11.08 REVIEW OF PLAN'S FINANCIAL REQUIREMENTS: Immediately upon its
appointment and at least annually thereafter, the Committee shall
review the Plan's short- and long-run financial needs and its
liquidity. On the basis of these and other considered factors, the
Committee shall formulate a Funding Policy which it shall
communicate to the Trustee(s). The Trustee(s) responsible for
investments of the Trust Fund shall provide the method for carrying
out Plan objectives by appropriately coordinating investment policy
with Plan needs. The Committee shall periodically report to the
Board on the Funding Policy of the Plan.
11.09 PLAN ADMINISTRATOR: The Committee shall appoint a Plan
Administrator (the "Administrator") who shall be responsible for
and shall discharge all duties and obligations imposed on a plan
administrator by ERISA and the Code. He shall prepare, publish,
file and furnish the Plan reporting and disclosure reports,
statements, plan descriptions and benefit rights reports of
Participants in the manner and at the times required by law. The
Administrator shall be agent for the service of legal process upon
the Plan. The Administrator shall be appointed for a term of one
year and, on the expiration of such term, may be reappointed for a
succeeding term or terms. The Administrator may (but need not) be
a member of the Committee or an Employee of the Employer. The
person appointed as Administrator shall indicate his willingness to
serve by filing a written consent with the Committee. The
Administrator may resign upon 45 days' written notice to the
Committee (or on shorter notice acceptable to the Committee) and
may be removed by the Committee during his term of office if, in
its sole discretion, the Committee should determine that he has
failed or is unable to perform the duties of the office in an
efficient manner. The Committee shall have the power to fill a
vacancy created by the resignation, removal, or death of the
Administrator. The Administrator may employ counsel and/or
consultants to render advice with regard to any responsibility of
the Administrator under the Plan and may employ necessary clerical
help. The Employer shall pay the reasonable fees of actuaries,
accountants, counsel, or other consultants, the expenses of
clerical help, and/or other necessary
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<PAGE> 55
and proper expenses of the Administrator. The Administrator shall
report to the Committee at least quarterly in order that the
Committee may review the Administrator's performance of his duties.
11.10 STANDARD OF CONDUCT: Plan fiduciaries, as described in ERISA,
shall discharge their duties and responsibilities in accordance
with the standards of care and prudence required under that law.
To the extent permitted by law, including by ERISA, the Employer
shall indemnify any director, officer or member of the Committee
who is held to be a fiduciary of the Plan against any liability or
loss, including legal expenses, occurring by reason of any act or
omission of such fiduciary. The Employer may purchase insurance to
cover any such fiduciary of the Plan for liability or losses,
including legal expenses, occurring by reason of the act or
omission of the fiduciary.
11.11 CHANGES IN COMMITTEE DUTIES: The powers, duties, and
responsibilities of the Committee may be changed by the Board only
upon the written consent of the Committee.
11.12 TRUST FUND: All the funds of the Plan shall be held by a Trustee
or Trustees appointed from time to time by the Board, in one or
more trusts under a Trust Agreement or Agreements approved or
authorized by the Board for use in providing the benefits of the
Plan.
11.13 AUTHORITY OF TRUSTEE: The Trustee shall be the named fiduciary
with respect to the control and management of the assets of the
Plan. The Trustee shall have exclusive authority and discretion to
invest, manage, and control the assets of the Plan. The Trustee
shall diversify the investments of the Plan and of each Investment
Fund so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so. The Trustee
shall not maintain the indicia of ownership of any assets of the
Plan outside the jurisdiction of the district courts of the United
States.
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<PAGE> 56
ARTICLE 12: GENERAL PROVISIONS
12.01 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES: No part of
the corpus or income of the Trust Fund shall be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants and Beneficiaries of the Plan (excepting, however,
contributions which may be returned to the Employer under Section
4.06).
12.02 INALIENABILITY OF BENEFITS: No benefit under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or change, and any attempt to do so
shall be void.
This provision shall not apply to a "qualified domestic relations
order" within the meaning of Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to
the extent provided under a "qualified domestic relations order", a
former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
12.03 NO RIGHT TO EMPLOYMENT: Nothing herein contained nor any action
taken under the provisions hereof shall be construed as giving any
Employee the right to be retained in the employ of an Employer.
12.04 UNIFORM ADMINISTRATION: Whenever in the administration of the Plan
any action is required by the Committee, such action shall be
uniform in nature as applied to all persons similarly situated and
no such action shall be taken which will discriminate in favor of
highly compensated Participants or Participants whose principal
duties consist of supervising the work of others.
12.05 HEADINGS: The headings of the sections of this Plan are placed
herein for convenience of reference and in the case of any conflict
the text of the Plan, rather than such headings, shall control.
12.06 USE OF PRONOUNS: The masculine pronoun as used herein refers to
both men and women, and words used in the singular are intended to
include the plural, whenever appropriate.
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<PAGE> 57
12.07 CONSTRUCTION: The Plan shall be construed, regulated and
administered in accordance with the laws of the State of Georgia
except to the extent that such laws are superseded by ERISA. The
Plan and the Trust shall be construed so as to qualify under
Sections 401(a), 401(k) and 501(a) of the Code. Absent gross
negligence or knowing and willful misconduct, persons acting for or
on behalf of the Plan (including, but not limited to, the Employer,
the Board, members of the Committee, the Plan Administrator, and
the Trustee) shall not be subject to civil liability under any
provisions of State, county, or local law pertaining to the conduct
of fiduciaries or trustees or to the permissibility of their
investments.
12.08 SOURCE OF PAYMENT: Benefits under the Plan shall be payable only
out of the Trust Fund. The Employer shall have no obligation,
responsibility, or liability to make any direct payment of benefits
under the Plan. Except as otherwise provided by law, including
ERISA, neither the Employer nor the Trustee guarantees the Trust
Fund against any loss or depreciation or guarantees the payment of
any benefit hereinunder.
12.09 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS: All rights and
benefits, including elections, provided to a Participant in this
Plan shall be subject to the rights afforded to any "alternate
payee" under a "qualified domestic relations order" as those terms
are defined in Code Section 414(p).
12.10 ROLLOVERS FROM QUALIFIED PLAN: A Participant may transfer (roll
over) all or part of his interest in another Qualified Plan to this
Plan provided:
(a) Some or all of the amount distributed from the plan is
transferred to this Plan no later than the sixtieth day
after distribution was made from that plan, or if
distributions are made in installments, no later than the
sixtieth day after the last distribution was made, and
(b) The amount transferred to this Plan does not include any
amounts contributed by the Participant to the Plan, and
(c) The distribution represents at least 50% of the
Participant's benefit under the plan, and
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<PAGE> 58
(d) None of the amounts rolled over to this Plan represent
amounts paid on behalf of the Participant while he was a
Key Employee in a Top Heavy Plan, and
(e) The amount transferred to this Plan is equal to or exceeds
$2,000.
Such transfer (roll over) may also be made through an Individual
Retirement Account (IRA) qualified under Section 408 of the
Internal Revenue Code where the Individual Retirement Account was
used solely as conduit from the prior plan and the transfer is made
in accordance with the rules provided at (a) through (d) of this
paragraph.
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ARTICLE 13: AMENDMENTS: MERGER OR CONSOLIDATION OF PLAN:
TERMINATION
13.01 AMENDMENTS TO THE PLAN: The Board reserves the right at any time
and from time to time, and retroactively if deemed necessary or
appropriate to conform with governmental regulations or other
policies, to modify or amend in whole or in part any or all of the
provisions of the Plan; provided that no such modification or
amendment shall make it possible for any part of the funds of the
Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of Participants or their Beneficiaries; and
provided further, that no such amendment shall increase the duties
of the Trustee without its consent thereto in writing. Except as
may be required to conform with governmental regulations, no such
amendment shall cause any reduction in the amount credited to the
account of any Participant with respect to contributions made on
his behalf prior to the date of such amendment. For the purposes
of this Section, a Plan amendment which has the effect of
eliminating or reducing an early retirement benefit or eliminating
an optional form of benefit (as provided in Treasury regulations)
shall be treated as reducing the amount credited to the account of
a Participant.
13.02 ELECTION OF PREAMENDMENT VESTING SCHEDULE: In the event the Plan
is amended to change or modify Section 9.01, an Employee who is a
Participant with at least five (5) Years of Vesting Service, as of
the date the amendment is adopted or as of the amendment's
effective date, may elect to be subject to the preamendment vesting
schedule. If an Employee who is a Participant fails to make such
an election, then such Participant shall be subject to the new
vesting schedule. The election of the preamendment vesting
schedule shall be made by giving written notice to the Plan
Administrator during the election period. The election period
shall begin on the date such amendment is adopted and shall end no
earlier than the latest of the following dates:
(a) The date which is sixty (60) days after the date the
amendment is adopted;
(b) The date which is sixty (60) days after the date the Plan
amendment becomes effective; or
(c) The date which is sixty (60) days after the date the
Participant is issued written no-
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tice of the amendment by the Company or Administrator.
Such election shall be made only by an Employee who is a
Participant at the time such election is made and such election
shall be irrevocable. Such amendment shall not reduce the Vested
percentage of such Participant's Accrued Benefit as of the later of
the date on which such amendment is adopted or the effective date
of such amendment.
13.03 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS: The Plan shall not
merge or consolidate with, or transfer its assets or liabilities to
any other plan or entity unless each Participant would, if the
surviving plan or entity then terminated, receive a benefit
immediately after the merger, consolidation or transfer which is
equal to or greater than the benefit he would have been entitled to
receive if the Plan had terminated immediately before the merger,
consolidation or transfer.
13.04 TERMINATION: The Plan is purely voluntary on the part of the
Employer and it reserves the right to terminate, or completely
discontinue contributions under the Plan, and terminate the Trust
Agreement and the trust hereinunder. Upon termination of the Plan,
or partial termination of the Plan, or complete discontinuance of
contributions hereunder, the value of each Participant's Account
shall be fully vested, and payment of benefits shall be made to
Participants or their Beneficiaries upon their Retirement,
Disability, Death, or Termination of Employment of the respective
Participants provided in the same manner as under Sections 6.02,
6.03, 6.04, and 6.05 respectively. Any Forfeitures not previously
applied in accordance with Section 4.05 shall be credited ratably
to the Accounts of all Participants in proportion to the amounts of
Employer Contributions credited to their respective Employer
Matching Contribution Account during the current calendar year, or
the prior calendar year if no Employer Contributions have been made
during the current calendar year.
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ARTICLE 14: WITHDRAWAL OF AN EMPLOYER
14.01 EMPLOYER'S RIGHT TO WITHDRAW: Subject to the requirements of ERISA
and the Code, any one or more of the Employers (other than the
Employer) may terminate and withdraw from the Plan by giving six
months' advance notice in writing to the Employer of its or their
intention to withdraw, unless a shorter notice shall be agreed to
by the Employer.
14.02 TRUSTEE'S OBLIGATIONS: Upon a withdrawal under Section 14.01, the
Employer shall certify to the Trustee the equitable shares of such
withdrawing company or companies in the Trust Fund and the Trustee
shall thereupon set aside such securities and property to such
legal representatives as may be designated by such withdrawing
company or companies.
14.03 PLAN NOT TERMINATED: The withdrawal of an Employer from the Plan
shall not constitute a termination of the Plan as thereafter in
effect for any other Employer.
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ARTICLE 15: CLAIMS PROCEDURE
15.01 SUBMISSION OF CLAIMS: Claims for benefits under the Plan shall be
submitted in writing to the Committee or a person designated by the
Committee for this purpose. Written notice of the disposition of a
claim shall be furnished the claimant within 30 days after the
application therefor is filed.
15.02 WRITTEN NOTICE OF DENIED CLAIM: The Plan Administrator shall
provide adequate notice in writing to any person whose claim for
benefits has been denied. Such notice shall set forth the specific
reason or reasons for the denial and shall be written in a manner
calculated to be understood by the recipient. Such notice shall
also refer specifically to pertinent Plan provisions on which the
denial is based; shall describe any additional material or
information necessary for the claimant to perfect the claims; and
shall explain why such material or information is necessary. Such
notice shall also explain the Plan's claims review procedure.
15.03 REVIEW OF DECISION DENYING CLAIM: The Committee may, in its
discretion, afford to any person whose claim for benefits has been
denied a reasonable opportunity for a full and fair review of the
decision denying the claim. The claimant or his duly authorized
representative shall request such review in writing not more than
90 days after receipt by the claimant of written notification of
denial of a claim. Within 10 days after, or as part of, a timely
request for review, the claimant may submit issues and comments in
writing and may review pertinent documents.
15.04 HEARING: Upon receipt of a timely request for review, the
Committee may, in is discretion, appoint one or more of its members
to hear the claimant's request and inquire into the merits of the
matter. Such member(s) shall meet promptly with the claimant
and/or his duly authorized representative and hear such arguments
and/or examine such documents as the claimant or his representative
shall present. The member(s) shall then report his (their)
findings to the Committee orally or in writing.
15.05 WRITTEN DECISION OF COMMITTEE: A decision of the Committee on
review of a claim shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be
understood by the claimant. Such decision shall include specific
references to the pertinent Plan provisions on which the decision
is
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based. The decision shall be made promptly and not later than 60
days after a 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 a request for review.
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