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EXHIBIT 10-D
TRUSERV CORPORATION
SAVINGS AND COMPENSATION DEFERRAL PLAN
Amended and restated as of July 1, 2000
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ARTICLE 1. DEFINITIONS
1.01 Account means the entire interest of a Participant in the Trust Fund as
of the date of reference. A Participant's Account shall consist of his
Deferral Account, Profit Sharing Account, Matching Account, Savings
Account, Pension Account and Rollover Account and, if applicable, his
loan fund under Section 7.03.
1.02 Accrued Benefit means the amount standing in a Participant's Account as
of any date, derived from both Company contributions and Associate
contributions, if any.
1.03 Actual Deferral Percentage means, with respect to a specified group of
Associates, the average of the ratios, calculated separately for each
Associate in that group, of (a) the amount of Income Deferral
Contributions made pursuant to Article 3. hereof for a Plan Year
(including Income Deferral Contributions returned to a Highly
Compensated Employee under Section 3.01(c) and Income Deferral
Contributions returned to any Associate pursuant to Section 3.01(d), to
(b) the Associates' Compensation for that entire Plan Year, provided
that, upon direction of the Committee, Compensation for a Plan Year
shall only be counted if received during the period an Associate is, or
is eligible to become, a Participant. The Actual Deferral Percentage
for each group and the ratio determined for each Associate in the group
shall be calculated to the nearest one one-hundredth of one percent.
For purposes of determining the Actual Deferral Percentage for a Plan
Year, Income Deferral Contributions may be taken into account for a
Plan Year only if they:
(a) relate to compensation that either would have been received by
the Associate in the Plan Year but for the deferral election,
or are attributable to services performed by the Associate in
the Plan Year and would have been received by the Associate
within 2 1/2 months after the close of the Plan Year but for
the deferral election,
(b) are allocated to the Associate as of a date within that Plan
Year and the allocation is not contingent on the participation
or performance of service after such date, and
(c) are actually paid to the Trustee no later than 12 months after
the end of the Plan Year to which the contributions relate.
1.04 Adjustment Factor means the cost of living adjustment factor prescribed
by the Secretary of the Treasury under Section 415(d) of the Code for
calendar years beginning on or after January 1, 1988, and applied to
such items and in such manner as the Secretary shall provide.
1.05 Affiliated Company means any company not participating in the Plan
which is a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which also includes as a member TruServ
Corporation, any trade or business under common control (as defined in
Section 414(c) of the Code) with TruServ Corporation, a member of an
affiliated service group (as defined in Section 414(m) of the Code)
which includes TruServ Corporation, or any other entity required to be
aggregated with TruServ Corporation pursuant to Regulations under
Section 414(o) of the Code, except that with respect to Section 3.10
and the definition of "leased employee" in Section 1.09 "more than 50%"
shall be substituted for "at least 80%" where it appears in Section
1563(a)(1) of the Code.
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1.06 Anniversary Date means the last day in each Plan Year.
1.07 Annual Dollar Limit means $150,000 commencing with the 1994 Plan Year.
The Annual Dollar Limit shall be adjusted in accordance with Section
401(a)(17)(B) of the Code.
1.08 Annuity Starting Date means the first day of the first period for which
an amount is paid as an annuity or any other form following a
Participant's retirement or other termination of employment.
1.09 Associate means any person employed by the Company who receives stated
compensation other than a pension, severance pay, retainer or fee under
contract and is a member of a group of Associates to whom the Plan has
been and continues to be extended by the Company. Any person considered
to be an independent contractor or consultant by the Company shall be
excluded from the definition of Associate, regardless of such person's
classification by the Internal Revenue Service for tax withholding
purposes. Associate shall not include any "leased employee" as defined
in Section 414(n) of the Code and any person who is included in a unit
of Associates covered by a collective bargaining agreement which does
not provide for his participation in the Plan. In the case of any
person who is a leased employee immediately before or after a period of
service as an Associate, the entire period during which he has
performed services for the Company or an Affiliated Company as a leased
employee shall be counted as service as an Associate for all purposes
of the Plan, except that he shall not, by reason of that status, become
a Participant of the Plan.
1.10 Beneficiary means any person, persons or entity named by a Participant
by written designation filed with the Committee to receive benefits
payable in the event of the Participant's death. However, if the
Participant is married, his spouse shall be deemed to be the
Beneficiary unless another Beneficiary has been named by a written
designation filed with the Committee which has been signed by the
Participant with Spousal Consent. If no such designation is in effect
at the time of death of the Participant, or if no person, persons or
entity so designated shall survive the Participant, the Participant's
surviving spouse, if any, shall be deemed to be the Beneficiary;
otherwise the Beneficiary(ies) shall be, at the Committee's discretion,
any relative by blood, adoption or marriage in such proportion as the
Committee determines or the estate of the last to die of the
Participant or his designated Beneficiary.
1.11 Board of Directors means the Board of Directors of the Company.
1.12 Break in Service means an event affecting forfeitures, which shall
occur as of the Participant's Severance Date if he is not reemployed by
the Company or an Affiliated Company within one year after a Severance
Date. However, if an Associate is absent from work immediately
following his active employment, irrespective of whether the
Associate's employment is terminated, because of the Associate's
pregnancy, the birth of the Associate's child, the placement of a child
with the Associate in connection with the adoption of that child by the
Associate or for purposes of caring for that child for a period
beginning immediately following that birth or placement and that
absence from work began on or after the first day of the Plan Year
which began in 1985, a Break in Service shall occur only if the
Participant does not return to work within two years of his Severance
Date. A Break in Service shall not occur during an approved leave of
absence or during a period of military service which is included in the
Associate's Service pursuant to Section 1.44.
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1.13 Coast Plan means the SERVISTAR/Coast to Coast Profit Sharing and
Savings Plan sponsored by the SERVISTAR/Coast to Coast Corporation,
which was merged into the SERVISTAR plan as of August 1, 1996.
1.14 Code means the Internal Revenue Code of 1986, as amended.
1.15 Committee means the committee named as such pursuant to the provisions
of Article 8.
1.16 Company means TruServ Corporation and any successor entity thereto
which adopts this Plan. Cotter & Company and SERVISTAR COAST TO COAST
Corporation merged on July 1, 1997 and became TruServ Corporation.
1.17 Compensation means the total remuneration actually paid to the
Participant by the Company during the Plan Year to which reference is
made, determined prior to any pre-tax contributions under a "qualified
cash or deferred arrangement" (as defined under Section 401(k) of the
Code and its applicable regulations) or under a "cafeteria plan" (as
defined under Section 125 of the Code and its applicable regulations).
Compensation shall include basic salary or wages (including
commissions, bonuses (other than sign-on bonuses)), and all other
direct current remuneration, such as vacation, holiday and sick pay,
but shall not include severance pay, moving or relocation allowances or
bonuses, tuition reimbursements, automobile or travel allowances or
bonuses, or long-term disability pay paid during the period the
Participant is an active Participant, Company Contributions to Social
Security, contributions to this or any other deferred profit sharing or
retirement plan or program, stock options, or the value of any other
fringe benefits provided at the expense of the Company and not
specifically included herein. However, Compensation shall not exceed
the Annual Dollar Limit, provided that such Annual Dollar Limit shall
not be applied in determining Highly Compensated Employees under
Section 1.27.
1.18 Contribution Percentage means, with respect to a specified group of
Associates, the average of the ratios, calculated separately for each
Associate in that group, of (a) the amount of Participant's Matching
Contributions (excluding any Matching Contributions forfeited under the
provisions of Sections 3.01 and 3.06, to (b) the Associate's
Compensation for that Plan Year, provided that upon direction of the
Committee, Compensation for a Plan Year shall only be counted if
received during the period an Associate is, or is eligible to become, a
Participant. The Contribution Percentage for each group and the ratio
determined for each Associate in the group shall be calculated to the
nearest one one-hundredth of one percent.
1.19 Cotter Plan means the Cotter & Company Employees' Savings and
Compensation Deferral Plan, originally effective January 1, 1976, which
was merged with the SERVISTAR Plan effective January 1, 1998 to create
this Plan.
1.20 Date of Employment means the first date on which an Associate completes
an Hour of Service as an Associate, provided that in the case of a
Break in Service the "Date of Employment" shall be the first date
thereafter on which he completes an Hour of Service.
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1.21 Deferral Account means so much of the Participant's Account as is
attributable to a Participant's Income Deferral Contributions, adjusted
as provided herein for investment income, gain or loss and expenses.
The Deferral Account shall hold:
(a) the Participant's "Deferral Account" under the Cotter Plan,
(b) the Participant's "Pre-Tax Account" under the SERVISTAR Plan
(known as the "Savings Plus Account" prior to July 1, 1996),
which also includes
(c) the Participant's Coast Plan "Pre-Tax Account" merged into the
SERVISTAR Plan as of August 1, 1996.
1.22 Disability means total and permanent physical or mental disability, as
evidenced by:
(a) receipt of Social Security disability pension, or
(b) receipt of disability payments under the Company's long-term
disability program.
1.23 Earnings means the amount of earnings to be returned with any excess
deferrals, excess contributions or excess aggregate contributions under
Section 3.01, 3.06, 3.07 or 3.08 for a Plan Year, determined as of the
last day of such Plan Year under the Plan's method of allocating income
to Participants' Accounts pursuant to Section 4.03.
1.24 Effective Date means January 1, 1998 for this amended and restated
Plan.
1.25 Entry Date means any day of the Plan Year following an Associate's
completion of one year of Service.
1.26 ERISA means the Associate Retirement Income Security Act of 1974, as
amended from time to time.
1.27 Highly Compensated Employee means any Associate of the Company or an
Affiliated Company (whether or not eligible for membership in the Plan)
who:
(a) was a 5% owner of the Company (as defined in Section 416(i) of
the Code) for such Plan Year or the prior Plan Year, or
(b) for the preceding Plan Year received Compensation in excess of
$80,000 commencing with the 1997 Plan Year (as adjusted by the
Secretary of the Treasury from time to time for the
cost-of-living in accordance with Section 414(q) of the Code).
The Company's preceding Plan Year election as described above, shall be
used consistently in determining Highly Compensated Employees for
determination years of all Associate benefit plans of the Company and
any Affiliated Company for which Section 414(q) of the Code applies
(other than a multiemployer plan) that begin with or within the same
calendar year, until such election is changed by Plan amendment in
accordance with Internal Revenue Service requirements. Notwithstanding
the foregoing, the consistency provision in the preceding sentence
shall not apply for the Plan Year beginning in 1997, and for Plan Years
beginning in 1998 and 1999, shall apply only with respect to all
qualified retirement plans (other than a multiemployer plan) of the
Company and any Affiliated Company.
Notwithstanding the foregoing, Associates who are nonresident aliens
and who receive no earned income from the Company or an Affiliated
Company which constitutes income from sources within the United States
shall be disregarded for all purposes of this Section.
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The provisions of this Section shall be further subject to such
additional requirements as shall be described in Section 414(q) of the
Code and its applicable regulations, which shall override any aspects
of this Section inconsistent therewith.
1.28 Hour of Service means each hour for which an Associate is directly or
indirectly paid, or entitled to payment, by the Company or an
Affiliated Company for the performance of duties.
1.29 Income Deferral Contributions means amounts contributed pursuant to
Section 3.01.
1.30 Investment Fund means any one of or all of the investment funds
available to a Participant as provided in Section 4.02.
1.31 Matching Account means so much of a Participant's Account as is
attributable to the Company's Matching Contributions, adjusted as
provided herein for investment income, gain or loss and expenses. The
Matching Account shall also hold the Participant's match account under
any plan merged, either directly or indirectly, into this Plan.
1.32 Matching Contributions means amounts contributed by the Company
pursuant of Section 3.02.
1.33 Nonhighly Compensated Employees means for any Plan Year an Associate of
the Company or an Affiliated Company who is not a Highly Compensated
Employee for that Plan Year.
1.34 Normal Retirement Age means attainment of age 65.
1.35 Participant means any person who is an Associate and who has been
admitted to participation in this Plan pursuant to the eligibility
provisions of Article 2. A Participant ceases to be a Participant when
all assets in his Account to which he is entitled under the Plan have
been distributed in accordance with the Plan.
1.36 Pension Account means so much of the Participant's Account which was
credited the "Participant's Pension Account" under the Coast Plan which
had been transferred into the SERVISTAR Plan on behalf of the
Participant from the Coast America Retirement Savings Plan, adjusted as
provided herein for investment income, gain or loss and expenses.
1.37 Plan means the TruServ Corporation Savings and Compensation Deferral
Plan as set forth herein, and as the same may from time to time
hereafter be amended. This Plan was created by merger of the Cotter &
Company Employees' Savings and Compensation Deferral Plan and the
SERVISTAR COAST TO COAST Corporation Supplemental Retirement Plan,
effective January 1, 1998.
1.38 Plan Year means the twelve-month period commencing each January 1.
1.39 Profit Sharing Account means so much of a Participant's Account as is
attributable to the SERVISTAR Plan "Profit Sharing Account" merged into
this Plan as of January 1, 1998, adjusted as provided herein for
investment income, gain or loss and expenses. This SERVISTAR Plan
"Profit Sharing Account" was called the "Company Contribution
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Account" prior to July 1, 1996. The "Profit Sharing Account" shall also
hold the Participant's Coast Plan "Retirement Account" merged into the
SERVISTAR Plan as of August 1, 1996.
1.40 Qualified Joint and Survivor Annuity means an annuity payable for the
life of a Participant, and, after the Participant's death, an annuity
payable to his spouse for life at the rate of not less than 50% nor
more than 100% of the amount payable to the Participant.
1.41 Rollover Account means so much of the Participant's Account into which
shall be credited the Rollover Contributions made by a Participant as
set forth in Section 3.03, adjusted as provided herein for investment
income, gain or loss and expenses. This Rollover Account shall also
hold the Participant's Cotter Plan "Rollover Account" and SERVISTAR
Plan "Rollover Account" (which includes the Coast Plan "Rollover
Account" merged as of August 1, 1996) merged into this Plan as of
January 1, 1998.
1.42 Rollover Contributions means amounts contributed pursuant to Section
3.03.
1.43 Savings Account means so much of a Participant's Account as is
attributable to a Participant's after-tax contributions under the
Cotter Plan or the SERVISTAR Plan or any other plan previously merged
into them, adjusted as provided herein for investment income, gain or
loss and expenses. This Savings Account was called the Employee
Contribution Account prior to July 1, 1986. The Savings Account shall
hold the Participant's Coast Plan "Employee Thrift Account" merged into
this Plan as of August 1, 1996.
1.44 Service means, with respect to any Associate, his period of employment
with the Company or an Affiliated Company, whether or not as an
Associate, beginning on the date he first completes an Hour of Service
(or the date he first completes and Hour of Service upon reemployment
after a Break in Service) and ending on his Severance Date, provided
that:
(a) if his employment terminates and he is reemployed within one
year of the earlier of:
(i) his date of termination, or
(ii) the first day of an absence from service immediately
preceding his date of termination,
the period between his Severance Date and his date of
reemployment shall be included in his Service;
(b) to the extent provided by the Company in a written agreement,
an Associate's service with any predecessor to the Company
will be considered as employment by the Company, thus, Service
shall include an Associate's continuous employment with Cotter
& Company under the provisions of the Cotter Plan, "Years of
Service" with the SERVISTAR Corporation under the provisions
of the SERVISTAR Plan, and continuous service with the
Coast-to-Coast Corporation prior to its acquisition by the
SERVISTAR Corporation, as recognized under the provisions of
the Coast-to-Coast Corporation qualified retirement plan;
(c) if he is on a leave of absence, any portion of that period of
leave which is not otherwise included in his Service shall be
included in his Service. A leave of absence means any of the
following:
(i) Absence on leave granted by the Company or an
Affiliated Company for any cause for the period
stated in such leave and any extension that the
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Company or an Affiliated Company may grant in
writing. For the purpose of this subsection, the
Company or an Affiliated Company shall give uniform
treatment to all Associates in similar circumstances;
(ii) Absence in any circumstances so long as the Associate
continues to receive his regular pay from the Company
or an Affiliated Company;
(iii) Absence because of service in the uniformed armed
forces of the United States by an Associate, if he
shall have returned to employment with the Company or
an Affiliated Company having applied to return while
his reemployment rights were protected by law; or
(iv) Absence by reason of vacation, holidays, illness,
disability, maternity or jury duty.
When a leave of absence ceases and the Associate does not
return to Service, the last day of the leave shall be deemed a
Severance Date unless his Service actually terminated prior to
the expiration of the leave.
(d) if a former Associate who is not vested with respect to any
portion of his Deferral Account or Matching Account is
reemployed by the Company or an Affiliated Company after he
has incurred five consecutive one-year Breaks in Service, his
period of Service prior to such five consecutive one-year
Breaks in Service shall be disregarded for purposes of
determining the vested portion of his Matching Account upon
his reemployment if the consecutive number of his one-year
Breaks in Service equal or exceed his years of Service. In no
event shall a period of Service after an Associate has
incurred five consecutive one-year Breaks in Service be taken
into account in determining the vested portion of his Matching
Account attributable to Service prior to such five year Break
in Service.
1.45 SERVISTAR Plan means the SERVISTAR COAST TO COAST Corporation
Supplemental Retirement Plan, originally effective July 1, 1964, which
was merged with the Cotter Plan effective January 1, 1998 to create
this Plan.
1.46 Severance Date means the earlier of:
(a) the date an Associate quits, retires, is discharged or dies,
or
(b) the first anniversary of the date on which an Associate is
first absent from service, with or without pay, for any reason
such as vacation, sickness, disability, layoff or leave of
absence.
1.47 Spousal Consent means the written consent of a Participant's spouse to
the Participant's election of a specified form of benefit or
designation of a specified Beneficiary. The specified form or specified
Beneficiary shall not be changed unless further Spousal Consent is
given. Spousal Consent shall be duly witnessed by a Plan representative
or notary public and shall acknowledge the effect on the spouse of the
Participant election. The requirement for Spousal Consent may be waived
by the Committee in the event that the Participant establishes to its
satisfaction that he has no spouse, that such spouse cannot be located,
or under such other circumstances as may be permitted under applicable
Treasury Department regulations. Spousal Consent shall be applicable
only to the particular spouse who provides such consent.
1.48 Trust Fund means such money or property as shall from time to time be
paid to the Trustee under this Plan, and such earnings, profits,
increments, additions and appreciation thereto, decreased by losses,
depreciation, benefits paid and expenses incurred in the administration
of the Plan and Trust.
1.49 Trustee means the party or parties so designated pursuant to a trust
agreement by the Company for this Plan and any duly appointed successor
Trustee or Trustees acting hereunder.
1.50 Valuation Date means any business day of the Plan Year.
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ARTICLE 2. PARTICIPATION AND ENTRY DATE
2.01 ELIGIBILITY FOR INCOME DEFERRAL CONTRIBUTIONS
Any Participant in the Cotter Plan or SERVISTAR Plan on December 31,
1997 shall be a Participant in this Plan on January 1, 1998 based on
his contribution election in effect in each respective plan on December
31, 1997. Any Associate who was eligible to participate on December 31,
1997 shall be eligible to become a Participant on January 1, 1998
provided he is then still an Associate. Each other Associate shall be
eligible to make Income Deferral Contributions on any Entry Date
coinciding with or immediately following the date he completes one year
of Service. Any former Associate of Advocate Services, Inc. who becomes
an Associate on or after January 1, 1998, shall be eligible to become a
Participant when he becomes an Associate.
2.02 PARTICIPATION
An eligible Associate shall become a Participant for purposes of
Section 2.01 on the first Entry Date coinciding with or immediately
following the date he completes one year of Service, provided he has
completed the enrollment procedures established by the Committee for:
(a) making an election for Income Deferral Contributions under
Section 3.01;
(b) authorizing the Company to reduce his Compensation;
(c) making an investment election; and
(d) designating a Beneficiary.
2.03 ELIGIBILITY UPON REEMPLOYMENT
Any Associate whose employment terminates and who is subsequently
reemployed shall become a Participant in accordance with Section 2.01.
Upon reemployment, the eligible Associate must complete the enrollment
procedures under Section 2.02.
2.04 TRANSFERRED PARTICIPANTS
A Participant who remains in the employ of the Company or an Affiliated
Company but ceases to be an Associate (e.g., the Associate enters a
nonparticipating collective bargaining unit) shall continue to be a
Participant of the Plan but shall not be eligible to receive
allocations of Income Deferral Contributions or Matching Contributions
while his employment status is other than as an Associate.
ARTICLE 3. INCOME DEFERRAL CONTRIBUTIONS
3.01 INCOME DEFERRAL CONTRIBUTIONS
(a) A Participant may elect on his application filed under Section
2.02 hereof to reduce his Compensation payable while a
Participant by not less than 1% and not more than 15%, in
multiples of 1% as elected by the Participant, and have that
amount contributed to the Plan by the Company in a manner to
be determined by the Committee. The Income Deferral
Contributions shall be paid to the Trustee as of the earliest
date on which such contributions can reasonably be segregated
from the Company's general assets, but no later than the 15th
day of the month following the month in which the Income
Deferral Contributions were made and shall be credited to the
Participant's Deferral Account. A Participant shall be 100%
vested at all times in his Deferral Account. Income Deferral
Contributions shall be further limited as provided below and
in Sections 3.01(b), 3.06 and 3.10.
(b) In no event shall the Participant's Income Deferral
Contributions and similar contributions made on his behalf by
the Company or an Affiliated Company to all plans, contracts
or arrangements subject to the provisions of Section
401(a)(30) of the Code in any calendar year exceed $7,000
commencing in the 1987 Plan Year, as adjusted from time to
time for cost-of-living pursuant to Section 402(g)(5) of the
Code. If a Participant's Income Deferral Contributions in a
calendar year reach that dollar limitation, his election of
Income Deferral Contributions for the remainder of the
calendar year will be canceled. As of the first pay period of
the following calendar year, the Participant's election of
Income Deferral Contributions shall again become effective in
accordance with his previous election, unless the Participant
elects otherwise.
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(c) In the event that the sum of the Income Deferral Contributions
and similar contributions to any other qualified defined
contribution plan maintained by the Company or an Affiliated
Company exceeds the dollar limitation in subsection (b) above
for any calendar year, the Participant shall be deemed to have
elected a return of Income Deferral Contributions in excess of
such limit ("excess deferrals") from this Plan. The excess
deferrals, together with Earnings, shall be returned to the
Participant no later than the April 15 following the end of
the calendar year in which the excess deferrals were made. The
amount of excess deferrals to be returned for any calendar
year shall be reduced by any Income Deferral Contributions
previously returned to the Participant under Section 3.06 for
that calendar year. In the event any Income Deferral
Contributions returned under this paragraph (b) were matched
by Matching Contributions under Section 3.02, those Matching
Contributions, together with Earnings, shall be forfeited and
used to reduce Company contributions.
(d) If a Participant makes tax-deferred contributions under
another qualified defined contribution plan for any calendar
year and those contributions when added to his Income Deferral
Contributions under this Plan exceed the dollar limitation
under subsection (b) above for that calendar year, the
Participant may allocate all or a portion of such excess
deferrals to this Plan. In that event, the excess deferrals,
with Earnings thereon, as allocated shall be returned to the
Participant no later than the April 15 following the end of
the calendar year in which the excess deferrals were made.
However, the Plan shall not be required to return excess
deferrals unless the Participant notifies the Committee, in
writing, by March 1 of that following calendar year of the
amount of the excess deferrals allocated to this Plan. The
amount of excess deferrals to be returned for any calendar
year shall be reduced by any Income Deferral Contributions
previously returned to the Participant under Section 3.06 for
that calendar year. In the event any Income Deferral
Contributions returned under this paragraph (d) were matched
by Matching Contributions under Section 3.02, those Matching
Contributions, together with Earnings, shall be forfeited and
used to reduce Company contributions.
3.02 MATCHING CONTRIBUTIONS
The Company shall contribute on behalf of each Participant who elects
to make Income Deferral Contributions an amount equal to 100% of the
first 3% plus 50% of the next 3% of Compensation which is contributed
as Income Deferral Contributions on behalf of or by the Participant to
the Plan during each payroll period. In no event, however, shall the
Matching Contributions pursuant to this Section exceed 4.5% of the
Participant's Compensation while a Participant with respect to a
particular Plan Year. Notwithstanding the foregoing provisions of this
Section 3.02, effective as of the first payroll period ending after
July 1, 2000 (a) the Company may thereafter authorize Matching
Contributions on behalf of each Participant who elects to make Income
Deferral Contributions in an amount equal to a percentage of such
Income Deferral Contributions with such maximum percentage amount as
determined from time to time by the Company in its sole discretion; (b)
any such Matching Contributions shall be allocated on an annual basis
only to the accounts of Participants who are actively employed by the
Company as of the Anniversary Date, who are on authorized medical leave
of absence as of the Anniversary Date, or whose employment has
terminated during the Plan Year after attainment of Normal Retirement
Age, as a result of involuntary termination by the Company, or as a
result of death or Disability; and (c) the Company reserves the right
not to make any Matching Contributions for any reason it deems
appropriate. The Matching Contributions are made expressly conditional
on the Plan satisfying the provisions of Sections 3.01, 3.06, 3.07 and
3.08. If any portion of the Income Deferral Contributions to which the
Matching Contribution relates is returned to the Participant under
Sections 3.01, 3.06 and 3.08, the corresponding Matching Contribution
shall be forfeited and if any amount of the Matching Contribution is
deemed an excess aggregate contribution under Section 3.07, such amount
shall be forfeited in accordance with the provisions of that Section.
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3.03 ROLLOVER CONTRIBUTIONS
(a) With the permission of the Committee and without regard to any
limitations on contributions set forth in Article 3, the Plan
may receive from a Participant, or an Associate who has not
yet met the eligibility requirements for membership, in cash,
any amount previously received (or deemed to be received) by
him from a qualified plan. The Plan may receive such amount
either directly from the Participant or Associate or from an
individual retirement account or from a qualified plan in the
form of a direct rollover. Notwithstanding the foregoing, the
Plan shall not accept any amount unless such amount is
eligible to be rolled over to a qualified trust in accordance
with applicable law and the Participant provides evidence
satisfactory to the Committee that such amount qualifies for
rollover treatment. Unless received by the Plan in the form of
a direct rollover, the Rollover Contribution must be paid to
the Trustee on or before the 60th day after the day it was
received by the Participant. No "rollover amount" will be
accepted, directly or indirectly, from an individual
retirement account to which the Associate contributed on his
own behalf or which consists, in whole or in part, of
insurance contracts.
(b) The Trustee shall establish a Rollover Account on whose behalf
such "rollover amount" was received.
(c) All "rollover amounts" shall be fully vested in the Associate
on whose behalf they are established.
(d) The assets held on behalf of any Associate in a rollover
account shall be aggregated with any other vested interest he
may have in this Plan for the purpose of distribution and
shall be distributed at the same time and by the same method
as the remainder of his vested interest in this Plan.
3.04 CHANGE IN CONTRIBUTIONS
The percentages of Compensation designated by a Participant under
Section 3.01 shall automatically apply to increases and decreases in
his Compensation. Subject to the provisions of Section 3.01, a
Participant may change the percentage of his authorized payroll
deduction or reduction at any time. The changed percentage shall become
effective as soon as administratively feasible following receipt of
notice by the Committee, according to rules established by the
Committee.
3.05 SUSPENSION OF CONTRIBUTIONS
revoke his election under Section 3.01 at any time by giving notice to
the Committee. The suspension or revocation shall become effective as
soon as administratively feasible following receipt of notice by the
Committee or its delegate, according to rules established by the
Committee. A Participant who has suspended and/or revoked his
contributions under Section 3.01 may apply to the Committee to have
them resumed and to have his Compensation reduced in accordance with
Section 3.01 as soon as administratively feasible following receipt of
notice by the Committee or its delegate, according to rules established
by the Committee.
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<PAGE> 12
3.06 ACTUAL DEFERRAL PERCENTAGE TEST
With respect to each Plan Year commencing on or after January 1, 1997,
the Actual Deferral Percentage for that Plan Year for Highly
Compensated Employees who are Participants or eligible to become
Participants for that Plan Year shall not exceed the Actual Deferral
Percentage for the preceding Plan Year for all Nonhighly Compensated
Employees for the preceding Plan Year who were Participants or eligible
to become Participants during the preceding Plan Year multiplied by
1.25. If the Actual Deferral Percentage for such Highly Compensated
Employees does not meet the foregoing test, the Actual Deferral
Percentage for such Highly Compensated Employees for that Plan Year may
not exceed the Actual Deferral Percentage for the preceding Plan Year
for all Nonhighly Compensated Employees for the preceding Plan Year who
were Participants or eligible to become Participants during the
preceding Plan Year by more than two percentage points, and such Actual
Deferral Percentage for such Highly Compensated Employees for the Plan
Year may not be more than 2.0 times the Actual Deferral Percentage for
the preceding Plan Year for all Nonhighly Compensated Employees for the
preceding Plan Year who were Participants or eligible to become
Participants during the preceding Plan Year (or such lesser amount as
the Committee shall determine to satisfy the provisions of Section
3.08). Notwithstanding the foregoing, the Company may elect to use the
Actual Deferral Percentage for Nonhighly Compensated Employees for the
Plan Year being tested rather than the preceding Plan Year provided
that such election must be evidenced by a Plan amendment and once made
may not be changed except as provided by the Secretary of the Treasury.
The Committee may implement rules limiting the Income Deferral
Contributions which may be made on behalf of some or all Highly
Compensated Employees so that this limitation is satisfied. If the
Committee determines that the limitation under this Section has been
exceeded in any Plan Year, the following provisions shall apply:
(a) The actual deferral ratio of the Highly Compensated Employee
with the highest actual deferral ratio shall be reduced to the
extent necessary to meet the actual deferral percentage test
or to cause such ratio to equal the actual deferral ratio of
the Highly Compensated Employee with the next highest ratio.
This process will be repeated until the actual deferral
percentage test is passed. Each ratio shall be rounded to the
nearest one one-hundredth of one percent of the Participant's
Compensation. The amount of Income Deferral Contributions made
by each Highly Compensated Employee in excess of the amount
permitted under his revised deferral ratio shall be added
together. This total dollar amount of excess contributions
("excess contributions") shall then be allocated to some or
all Highly Compensated Employees in accordance with the
provisions of paragraph (b) below.
(b) The Income Deferral Contributions of the Highly Compensated
Employee with the highest dollar amount of Income Deferral
Contributions shall be reduced by the lesser of (i) the amount
required to cause that Associate's Income Deferral
Contributions to equal the dollar amount of the Income
Deferral Contributions of the Highly Compensated Employee with
the next highest dollar amount of Income Deferral
Contributions, or (ii) an amount equal to the total excess
contributions. This procedure is repeated until all excess
contributions are allocated. The amount of excess
contributions allocated to a Highly Compensated Employee,
together with Earnings thereon, shall be distributed to him or
her in accordance with the provisions of paragraph (c).
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<PAGE> 13
(c) The excess contributions, together with Earnings thereon,
allocated to a Participant shall be paid to the Participant
before the close of the Plan Year following the Plan Year in
which the excess contributions were made, and to the extent
practicable, within 2 1/2 months of the close of the Plan Year
in which the excess contributions were made. However, any
excess contributions for any Plan Year shall be reduced by any
Income Deferral Contributions previously returned to the
Participant under Section 3.01 for that Plan Year. In the
event any Income Deferral Contributions returned under this
Section were matched by Matching Contributions, such
corresponding Matching Contributions, with Earnings thereon,
shall be forfeited and used to reduce Company contributions.
3.07 CONTRIBUTION PERCENTAGE TEST
With respect to each Plan Year commencing on or after January 1, 1997,
the Contribution Percentage for that Plan Year for Highly Compensated
Employees who are Participants or eligible to become Participants for
that Plan Year shall not exceed the Contribution Percentage for the
preceding Plan Year for all Nonhighly Compensated Employees for the
preceding Plan Year who were Participants or eligible to become
Participants during the preceding Plan Year multiplied by 1.25. If the
Contribution Percentage for such Plan Year for such Highly Compensated
Employees does not meet the foregoing test, the Contribution Percentage
for such Highly Compensated Employees for the Plan Year may not exceed
the Contribution Percentage for the preceding Plan Year for all
Nonhighly Compensated Employees for the preceding Plan Year who were
Participants or eligible to become Participants during the preceding
Plan Year by more than two percentage points, and the Contribution
Percentage for such Highly Compensated Employees for the Plan Year may
not be more than 2.0 times the Contribution Percentage for the
preceding Plan Year for all Nonhighly Compensated Employees for the
preceding Plan Year who were Participants or eligible to become
Participants during the preceding Plan Year (or such lesser amount as
the Committee shall determine to satisfy the provisions of Section
3.08). Notwithstanding the foregoing, the Company may elect to use the
Actual Contribution Percentage for Nonhighly Compensated Employees for
the Plan Year being tested rather than the preceding Plan Year provided
that such election must be evidenced by a Plan amendment and once made
may not be changed except as provided by the Secretary of the Treasury.
If the Committee determines that the limitation under this Section 3.07
has been exceeded in any Plan Year, the following provisions shall
apply:
(a) The actual contribution ratio of the Highly Compensated
Employee with the highest actual contribution ratio shall be
reduced to the extent necessary to meet the test or to cause
such ratio to equal the actual contribution ratio of the
Highly Compensated Employee with the next highest actual
contribution ratio. This process will be repeated until the
actual contribution percentage test is passed. Each ratio
shall be rounded to the nearest one one-hundredth of one
percent of a Participant's Compensation. The amount of
Matching Contributions made by or on behalf of each Highly
Compensated Employee in excess of the amount permitted under
his revised actual contribution ratio shall be added together.
This total dollar amount of excess contributions ("excess
aggregate contributions") shall then be allocated to some or
all Highly Compensated Employees in accordance with the
provisions of paragraph (b) below.
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<PAGE> 14
(b) The Matching Contributions of the Highly Compensated Employee
with the highest dollar amount of such contributions shall be
reduced by the lesser of:
(i) the amount required to cause that Associate's
Matching Contributions to equal the dollar amount of
such contributions of the Highly Compensated Employee
with the next highest dollar amount of such
contributions, or
(ii) an amount equal to the total excess aggregate
contributions.
This procedure is repeated until all excess aggregate
contributions are allocated. The amount of excess aggregate
contributions allocated to each Highly Compensated Employee,
together with Earnings thereon, shall be distributed or
forfeited in accordance with the provisions of paragraph (c)
below.
(c) Excess aggregate contributions allocated to a Highly
Compensated Employee under paragraph (b) above shall be
distributed or forfeited as follows: so much of the Matching
Contributions, together with Earnings, as shall be necessary
to equal the balance of the excess aggregate contributions
shall be reduced, with the vested Matching Contributions,
together with applicable Earnings, being paid to the
Participant and the Matching Contributions which are
forfeitable under the Plan, together with applicable Earnings,
being forfeited and applied to reduce Company contributions.
(d) Any repayment or forfeiture of excess aggregate contributions
shall be made before the close of the Plan Year following the
Plan Year for which the excess aggregate contributions were
made, and to the extent practicable, any repayment or
forfeiture shall be made within 2 1/2 months of the close of
the Plan Year in which the excess aggregate contributions were
made.
3.08 AGGREGATE CONTRIBUTION LIMITATION
Notwithstanding the provisions of Sections 3.06 and 3.07, in no event
shall the sum of the Actual Deferral Percentage of the group of
eligible Highly Compensated Employees and the Contribution Percentage
of such group, after applying the provisions of Sections 3.06 and 3.07,
exceed the "aggregate limit" as provided in Section 401(m)(9) of the
Code and the regulations issued thereunder. In the event the aggregate
limit is exceeded for any Plan Year, the Contribution Percentages of
the Highly Compensated Employees shall be reduced to the extent
necessary to satisfy the aggregate limit in accordance with the
procedure set forth in Section 3.07.
3.09 ADDITIONAL DISCRIMINATION TESTING PROVISIONS
(a) If any Highly Compensated Employee is a member of another
qualified plan of the Company or an Affiliated Company, other
than an employee stock ownership plan described in Section
4975(e)(7) of the Code or any other qualified plan which must
be mandatorily disaggregated under Section 410(b) of the Code,
under which deferred cash contributions or matching
contributions are made on behalf of the Highly Compensated
Employee or under which the Highly Compensated Employee makes
after-tax contributions, the Committee shall implement rules,
which shall be uniformly applicable to all Associates
similarly situated, to take into account all such
contributions for the Highly Compensated Employee under all
such plans in applying the limitations of Sections 3.06, 3.07
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<PAGE> 15
and 3.08. If any other such qualified plan has a plan year
other than the Plan Year defined in Section 1.38, the
contributions to be taken into account in applying the
limitations of Sections 3.06, 3.07 and 3.08 will be those made
in the plan years ending with or within the same calendar
year.
(b) In the event that this Plan is aggregated with one or more
other plans to satisfy the requirements of Sections 401(a)(4)
and 410(b) of the Code (other than for purposes of the average
benefit percentage test) or if one or more other plans is
aggregated with this Plan to satisfy the requirements of such
sections of the Code, then the provisions of Sections 3.06,
3.07 and 3.08 shall be applied by determining the Actual
Deferral Percentage and Contribution Percentage of Associates
as if all such plans were a single plan. If this Plan is
permissively aggregated with any other plan or plans for
purposes of satisfying the provisions of Section 401(k)(3) of
the Code, the aggregated plans must also satisfy the
provisions of Sections 401(a)(4) and 410(b) of the Code as
though they were a single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated under this
paragraph (b) only if they have the same plan year.
(c) The Company may elect to use Income Deferral Contributions to
satisfy the tests described in Sections 3.07 and 3.08,
provided that the test described in Section 3.06 is met prior
to such election, and continues to be met following the
Company's election to shift the application of those Income
Deferral Contributions to Sections 3.06 and 3.07.
(d) The Company may authorize that special "qualified nonelective
contributions" shall be made for a Plan Year, which shall be
allocated in such amounts and to such Participants, who are
Nonhighly Compensated Employees, as the Committee shall
determine. The Committee shall establish such separate
accounts as may be necessary. Qualified nonelective
contributions shall be 100% nonforfeitable when made. Any
qualified nonelective contributions made on or after January
1, 1989 and any earnings credited on any qualified nonelective
contributions after such date shall only be available for
withdrawal under the provisions of Section 7.03. Qualified
nonelective contributions made for the Plan Year may be used
to satisfy the tests described in Sections 3.06, 3.07 and
3.08, where necessary.
(e) For Plan Years commencing on and after January 1, 1999, if the
Company elects to apply the provisions of Section 410(b)(4)(B)
to satisfy the requirements of Section 401(k)(3)(A)(i) of the
Code, the Company may apply the provisions of Sections 3.06,
3.07 and 3.08 by excluding from consideration all eligible
Associates (other than Highly Compensated Employees) who have
not met the minimum age and service requirements of Section
410(a)(1)(A) of the Code.
3.10 ANNUAL ADDITIONS LIMITATIONS
(a) Notwithstanding the provisions of Sections 3.01 or 3.02, in no
event shall the "annual addition" to a Participant's Account
for any Plan Year (which shall be the "limitation year"), when
added to the Participant's "annual addition" for that Plan
Year under any other qualified defined contribution plan of
the Company and an Affiliated Company, exceed the lesser of
$30,000 (as revised for the Adjustment Factor) or 25% of such
Participant's aggregate remuneration for that Plan Year as
defined hereinafter.
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<PAGE> 16
(b) For purposes of this Section, the "annual addition" to a
Participant's Account under this Plan or any other qualified
defined contribution plan maintained by the Company or an
Affiliated Company shall be the sum of:
(i) the total of contributions, including Income Deferral
Contributions made on the Participant's behalf, by
the Company and any Affiliated Company,
(ii) with respect to Plan Years beginning prior to 1987,
Participant contributions in excess of 6% of his
remuneration or, if less, one-half of Participant
contributions; and with respect to Plan Years
beginning after 1986, all Participant contributions
(disregarding in any event Rollover Contributions),
and
(iii) forfeitures, if applicable,
that have been allocated to the Participant's Account under
this Plan or his accounts under any other such qualified
defined contribution plan, and solely for purposes of the 25%
limitation stated above,
(iv) amounts described in Sections 415(l)(1) and
419A(d)(2) of the Code allocated to the Participant.
For purposes of this paragraph (b), any Income Deferral
Contributions distributed under Sections 3.06 and any
after-tax or Matching Contributions distributed under the
provisions of Sections 3.01, 3.06, 3.07 or 3.08 shall be
included in the annual addition for the year allocated.
However (i) any loan repayment made under Article 7; (ii)
amounts required to be repaid under Section 5.04 as a
condition of the restoration of a Participant's forfeited
Account balance; and (iii) any excess deferrals timely
distributed from the Plan under Section 3.01(c) or (d) shall
be excluded from the definition of annual addition.
(c) For purposes of this Section, the term "remuneration" with
respect to any Participant shall mean the wages, salaries and
other amounts paid in respect of that Participant by the
Company or an Affiliated Company for personal services
actually rendered, including, but not limited to, bonuses,
overtime payments and commissions, but excluding deferred
compensation, stock options and other distributions which
receive special tax benefits under the Code. Notwithstanding
the foregoing, for limitation years commencing prior to
January 1, 1998, remuneration shall exclude amounts
contributed by the Company pursuant to a salary reduction
agreement which are not includible in the gross income of the
Associate under Sections 125, 402(g)(3) or 457 of the Code.
(d) The Committee shall have the duty and responsibility to
monitor each Participant's Account and to determine if any
annual additions may be in excess of the aforementioned
limits, and, if so, the amount by which the annual additions
should be reduced for such Plan Year.
(e) If an excess results from the application of any of these
limits, the annual addition to the Participant's Account shall
be reduced to the extent necessary to bring such annual
addition within these limitations in the following order:
(i) the Participant's unmatched Income Deferral
Contributions under Section 3.01 shall be reduced to
the extent necessary. The amount of the reduction
shall be returned to the Participant, together with
any earnings on the contributions to be returned.
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<PAGE> 17
(ii) the Participant's matched Income Deferral
Contributions under Section 3.01 and corresponding
Matching Contributions shall be reduced to extent
necessary. The amount of the reduction attributable
to the Participant's matched Income Deferral
Contributions shall be returned to the Participant
together with any earnings on those contributions to
be returned, and the amount attributable to the
Matching Contributions shall be forfeited and used to
reduce subsequent Matching Contributions payable by
the Company.
Any Income Deferral Contributions returned to a Participant
under this paragraph (e) shall be disregarded in applying the
dollar limitation on Income Deferral Contributions under
Section 3.01(b), and in performing the Actual Deferral
Percentage Test under Section 3.06. Any Matching Contributions
returned under this paragraph (e) shall be disregarded in
performing the Contribution Percentage Test under Section
3.07.
3.11 CONTRIBUTIONS NOT CONTINGENT UPON PROFITS
The Company may make contributions to the Plan without regard to the
existence or the amount of current and accumulated earnings and
profits. Notwithstanding the foregoing, however, this Plan is designed
to qualify as a "profit sharing plan" for all purposes of the Code.
3.12 CONTRIBUTIONS DURING PERIOD OF MILITARY LEAVE
(a) Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with
Section 414(u) of the Code. Without regard to any limitations
on contributions set forth in this Article 3, a Participant
who is reemployed on or after August 1, 1990 and is credited
with Service under the provisions of Section 1.44 because of a
period of service in the uniformed services of the United
States, may elect to contribute to the Plan the Income
Deferral Contributions that could have been contributed to the
Plan in accordance with the provisions of the Plan had he
remained continuously employed by the Company throughout such
period of absence ("make-up contributions"). The amount of
make-up contributions shall be determined on the basis of the
Participant's Compensation in effect immediately prior to the
period of absence, and the terms of the Plan at such time. Any
Income Deferral Contributions so determined shall be limited
as provided in Sections 3.01(b), 3.02, 3.06, 3.07 and 3.08
with respect to the Plan Year or Years to which such
contributions relate rather than the Plan Year in which
payment is made. Any payment to the Plan described in this
paragraph shall be made during the applicable repayment
period. The repayment period shall equal three times the
period of absence, but not longer than five years and shall
begin on the latest of:
(i) the Participant's date of reemployment,
(ii) October 13, 1996, or
(iii) the date the Company notifies the Associate of his
rights under this Section. Earnings (or losses) on
make-up contributions shall be credited commencing
with the date the make-up contribution is made in
accordance with the provisions of Article 4.
(b) With respect to a Participant who makes the election described
in paragraph (a) above, the Company shall make Matching
Contributions as in effect for the Plan
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<PAGE> 18
Year to which such make-up contributions relate. Matching
Contributions under this paragraph shall be made during the
period described in paragraph (a) above. Earnings (or losses)
on Matching Contributions shall be credited commencing with
the date the contributions are made in accordance with the
provisions of Article 4. Any limitations on Matching
Contributions described in Sections 3.02, 3.06, 3.07 and 3.08
shall be applied with respect to the Plan Year or Years to
which such contributions relate rather than the Plan Year or
Years in which payment is made.
3.13 REFUND OF CONTRIBUTIONS
All contributions made by the Company are made for the exclusive
benefit of the Participants and their Beneficiaries and such
contributions shall not be used for nor diverted to purposes other than
for the exclusive benefit of the Participants and their Beneficiaries
(including the costs of maintaining and administering the Plan and
Trust Fund). Notwithstanding the foregoing, amounts contributed to the
Trust Fund by the Company may be refunded to the Company by the Trustee
under the following circumstances and subject to the following
limitations:
(a) To the extent that a federal income tax deduction is
disallowed by the Internal Revenue Service for any
contribution made by the Company, the Trustee shall refund to
the Company upon demand the amount so disallowed or the net
asset value of such amount, whichever is less. For this
purpose, all contributions made by the Company are expressly
declared to be conditioned upon their deductibility under
Section 404 of the Code.
(b) In the case of a contribution which is made in whole or in
part by reason of a mistake of fact, so much of such
contribution as is attributable to the mistake of fact or the
net asset value of such contribution, whichever is less shall
be returnable to the Company on demand. The aforesaid demand
must be satisfactory to the Trustee and the demand and
repayment must be effectuated within one year after the date
of such disallowance or payment of the contribution to which
the mistake applies. All refunds shall be limited in amount,
circumstance and timing to the provisions of Section 403(c) of
ERISA.
(c) In the event that Income Deferral Contributions made under
Article 3 hereof are returned to the Company in accordance
with the provisions of this Section 3.13, the elections to
reduce Compensation which were made by Participants on whose
behalf those contributions were made shall be void
retroactively to the beginning of the period for which those
contributions were made. The Income Deferral Contributions so
returned shall be distributed in cash to those Participants
for whom those contributions were made.
ARTICLE 4. ACCOUNTS AND INVESTMENT FUNDS
4.01 ACCOUNTS
The Committee shall also cause to be established and maintained
accounts in the name of each Participant as follows:
(a) Deferral Account, to which shall be credited the respective
Income Deferral Contributions of each Participant.
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<PAGE> 19
(b) Matching Account, to which shall be credited for each active
Participant who elects to make Income Deferral Contributions,
a Matching Contribution as determined in Section 3.02.
(c) Profit Sharing Account, to which shall be credited the balance
in a Participant's profit sharing account under the SERVISTAR
Plan, which is merged into this Plan.
(d) Rollover Account, to which shall be credited rollovers for
each Participant who elects to roll over amounts from another
qualified plan pursuant to Section 3.03.
(e) Savings Account, to which shall be credited the balances in a
Participant's after-tax accounts under the Cotter Plan or the
SERVISTAR Plan, which are merged into this Plan.
(f) Pension Account, to which shall be credited the "Member's
Pension Account" under the Coast Plan.
4.02 INVESTMENT FUNDS AND PARTICIPANT DIRECTIONS
Every Participant shall have the right to designate the Investment
Funds in which the Trustee is to invest Trust Fund assets held on
behalf of such Participant.
(a) The Trust Fund shall consist of such Investment Fund(s) as the
Committee shall determine from time to time. Pending
investment, reinvestment or distribution as provided in the
Plan, the Trustee may temporarily retain the assets of any one
or more of the Investment Funds in cash, commercial paper,
short-term obligations or undivided interests or
participations in common or collective short-term investment
funds. Any Investment Fund may be partially or totally
invested in any common or commingled trust fund, in any group
annuity, deposit administration or separate account contract
issued by a legal reserve life insurance company which is
invested generally in property of the kind specified for the
Investment Fund, in mutual funds, or in any other property so
specified by the Committee. The Committee, in its discretion,
may direct the Trustee to establish Investment Funds or
terminate Investment Funds as it shall from time to time
consider appropriate and in the best interest of Participants.
Investment Funds will be described in materials provided under
the summary plan description for this Plan or in investment
materials supplementing the summary plan description.
(b) Each Participant may elect to have a percentage or all of his
contributions invested in one or any of the Investment Funds
(in multiplies of 1%). This election will also apply to any
subsequent contributions allocated to his Account. A
Participant may change a percentage designation made by him
and such change will apply to any contributions on or after
the date such change is implemented by the Trustee.
(c) Subject to any restrictions on the transfer from or to a
particular Investment Fund which may be established by the
Committee, each Participant may elect to transfer amounts
credited to his Account under one Investment Fund to his
Account under any other Investment Fund, in increments of 1%
or a specified dollar amount of such Participant's Account
balances. Such transfers (the number and frequency of which
shall be established from time to time by the Committee) will
occur as of any Valuation Date or as soon as practicable
thereafter provided that the Participant makes his transfer
election according to procedures established by the Committee
for this purpose.
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<PAGE> 20
(d) Subject to such rules and restrictions as the Committee may
establish, any election described in this subsection shall be
made pursuant to one of the following methods as determined by
the Committee in its sole discretion:
(i) in writing, by filing a written election form
specified by the Committee,
(ii) by telephone (to the extent permitted by law),
through a telephone system designated by the
Committee for this purpose, or
(iii) by any other method (to the extent permitted by law)
designated by the Committee.
If the Committee in its discretion determines that elections
under this subsection 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.
(e) In the absence of any Participant designation of Investment
Fund preference in accordance with Article 4, the Trustee
shall invest the Participant Account balance as directed by
the Committee.
(f) In the event the Participant is a borrower from the Fund, the
Trustee shall establish a "loan fund" as provided in Section
7.05.
(g) Each Participant is solely responsible for the selection of
his investment options. The Trustee, the Committee, the
Company, and the officers, supervisors and other Associates of
the Company are not empowered to advise a Participant as to
the manner in which his Accounts shall be invested. The fact
that an Investment Fund is available to Participants for
investment under the Plan shall not be construed as a
recommendation for investment in that Investment Fund.
(h) An administration fee established from time to time by the
Committee may be assessed during each Plan Year.
4.03 CREDITING OF INVESTMENT RESULTS
As of each Valuation Date, the Committee shall cause adjustment in the
Participant's Accounts in the Investment Funds as follows: charge (or
credit) to the proper Accounts all withdrawals, distributions, loans or
transfers made since the last preceding Valuation Date that have not
been charged (or credited) previously, credit each Participant's
Account with its prorata share of any increase, or charge the Account
with its prorata share of any decrease, in the value of the "adjusted
net worth," as defined below, of the Investment Fund as of that date
that has not been credited or charged previously, credit Participant's
Income Deferral Contributions, if any, that are to be credited to the
proper Accounts as of that date that have not been credited previously,
and credit Matching Contributions and forfeitures, if any, that are to
be credited as of that date that have not been credited previously. The
"adjusted net worth" of an Investment Fund as at any Valuation Date
means the then net worth of that Fund (that is, the fair market value
of the Fund, less its liabilities other than liabilities to persons
entitled to benefits under the Plan) as reported to or determined by
the Trustee, less an amount equal to the sum of the portions of the
Income Deferral Contributions and Matching Contributions paid to the
Trustee which are invested in that Fund and which have not been
credited to the Accounts of Participants as of a prior Valuation Date.
Each Participant's Accounts will reflect the amounts invested in each
Investment Fund(s) established under the Plan.
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<PAGE> 21
4.04 ANNUAL STATEMENTS
At least once a year, each Participant shall be furnished with a
statement setting forth the value of his Accounts and the vested
portion of his Accounts.
4.05 MERGER OF COTTER PLAN AND SERVISTAR PLAN ACCOUNTS
The Participant account balances in the Cotter Plan and SERVISTAR Plan
merged into this Plan effective as of January 1, 1998 shall be
allocated to the Accounts indicated in Article 1 of this Plan and will
be administrated in accordance with the general provisions applicable
to the respective Accounts unless a specific provision provides for
different administrative procedures.
ARTICLE 5. VESTING OF ACCOUNTS
5.01 ALL ACCOUNTS EXCEPT MATCHING ACCOUNT
A Participant shall at all times be 100% vested in, and have a
nonforfeitable right to, his Savings Account, Deferral Account, Pension
Account, Profit Sharing Account and Rollover Account. Any Participant
in the SERVISTAR Plan on December 31, 1997 who becomes a Participant in
this Plan on January 1, 1998 shall be 100% vested in his Profit Sharing
Account balance under the SERVISTAR Plan which was merged into this
Plan effective as of January 1, 1998.
5.02 COMPANY MATCHING ACCOUNT
(a) If a Participant's employment terminates prior to his Normal
Retirement Age, then for each year of Service he shall receive
a vested percentage of his Matching Account equal to the
following vesting schedule:
<TABLE>
<CAPTION>
==============================================================
PARTICIPANT'S YEARS OF SERVICE VESTED PERCENTAGE
==============================================================
<S> <C>
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 year or more 100%
==============================================================
</TABLE>
(b) In addition to the foregoing, a Participant shall be 100%
vested in, and have a nonforfeitable right to, his Matching
Account upon (i) death, (ii) termination of Service due to a
Disability, (iii) early retirement from service with the
Company after attaining age 55 with 3 years of Service, or
(iv) after attaining Normal Retirement Age.
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<PAGE> 22
Any Participant in the SERVISTAR Plan on December 31, 1997 who
became a Participant in this Plan on January 1, 1998 shall be
credited with an additional year of Service on January 1, 1998
and, upon his attaining age 50, also be 100% vested in his
Matching Account. In addition, any Participant whose Service
is terminated as a result of the Company permanently closing a
facility or eliminating a job position on or after January 1,
1997, shall be 100% vested in his Accounts. A Participant will
be considered to have terminated employment with the Company
or any Affiliated Company for purposes of a Disability if he
is no longer on the payroll (and performing services for) the
Company or any Affiliated Company. If a Participant is
transferred from employment with the Company to employment
with an Affiliated Company, his termination date will not be
considered to have occurred until his employment with the
Company and any Affiliated Company has terminated.
(c) A Participant's forfeiture, if any, of his Accrued Benefit
derived from Matching Contributions shall occur under the Plan
as of the Anniversary Date of the Plan Year in which the
Participant:
(i) receives a cash-out distribution of the vested
percentage of his Accrued Benefit as a result of his
termination of participation in the Plan, or, if
earlier and if applicable;
(ii) first incurs five consecutive one-year Breaks in
Service.
The Committee shall determine the percentage of a
Participant's Accrued Benefit forfeiture, if any, under this
Section solely by reference to the vesting schedule of this
Section. A Participant shall not forfeit any portion of his
Accrued Benefit for any other reason or cause except as
expressly provided by this subsection.
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5.03 ALLOCATION OF FORFEITURES
Any amounts in a Participant Matching Account forfeited during the Plan
Year in accordance with Section 5.02(c) hereof shall be applied to
reduce the Company's subsequent Matching Contributions or to restore
forfeited Accrued Benefits in accordance with Section 5.04 hereof.
5.04 RESTORATION OF FORFEITED ACCRUED BENEFIT
(a) If an amount of a Participant's Matching Account has been
forfeited under Section 5.02(c), that amount shall be
subsequently restored to the Participant's Matching Account,
provided (i) he is reemployed by the Company or an Affiliated
Company before he has incurred five consecutive one-year
Breaks in Service and (ii) if applicable, he repays to the
Plan during his period of reemployment and within five years
of the date he is reemployed an amount in cash equal to the
full amount distributed to him from the Plan on account of his
termination of employment, other than the amount attributable
to Participant rollover contributions, provided, however, that
he may elect to repay to the Plan all or part of those amounts
as well. A Participant shall have the same right to repay even
if his Accrued Benefit was 100% vested at the time of the cash
out distribution.
(b) The Committee shall restore the Participant's Accrued Benefit
coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Committee, to
the extent necessary, shall allocate to the Participant's
Account in the following order:
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(i) the amount, if any, of Participant forfeitures the
Committee would otherwise allocate under Section
5.03; and
(ii) to the extent the amount(s) available for restoration
for a particular Plan Year are insufficient to enable
the Committee to make the required restoration, the
Company shall contribute, such additional amount as
is necessary to enable the Committee to make the
required restoration. The Committee shall not take
into account the allocation(s) under this Section in
applying the limitation on allocations under Section
3.10.
ARTICLE 6. PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT
(a) Upon a Participant's termination of employment his vested
Accrued Benefit shall be distributed as provided in this
Article.
(b) Unless a Participant elects in writing, his vested Accrued
Benefit will commence to be distributed as soon as
administratively practical following the later of:
(i) The date the Participant attains his Normal
Retirement Age (except that for any participant in
the SERVISTAR Plan on December 31, 1997 who became a
participant in this Plan on January 1, 1998, the date
shall be the date the Participant attains his age
62); or
(ii) The date the Participant terminates employment with
the Company or any Affiliated Company
(but no later than 60 days after the close of the Plan Year in
which the later of (i) or (ii) occurs).
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(c) In lieu of a distribution as described in subsection (b)
above, a Participant may, in accordance with such procedures
as the Committee shall prescribe, elect to have the
distribution of his vested Accrued Benefit commence as soon as
administratively practicable following:
(i) his termination of Service, or
(ii) as of any subsequent date following his termination of
Service, which is before his Normal Retirement Age.
6.02 AGE 70 1/2 DISTRIBUTION
(a) Notwithstanding any provision of the Plan to the contrary, if
a Participant is a 5% owner (as defined in Section 416(i) of
the Code), distribution of the Participant's Accounts shall
begin no later than the April 1 following the calendar year in
which he attains age 70 1/2 provided that such commencement in
active service shall not be required with respect to a
Participant who elected by filing a written designation with
the Committee prior to January 1, 1984 to have distribution of
his Account balance made in accordance with the terms and
provisions of the Cotter Plan as in effect immediately before
January 1, 1984, who will have distributions made in
accordance with such election. However, if a Participant who
is not a 5% owner (as defined in Section 416(i) of the Code)
remains in service after the April 1 following the calendar
year in which he attains age 70 1/2, he may (but does not have
to) elect to have the provisions of paragraph (b) apply as if
the Participant was a 5% owner. Such election shall be made in
accordance with such administrative procedures as the
Committee shall prescribe.
(b) In the event a Participant is required or elects to begin
receiving payments while in service under the provisions of
paragraph (a) above, the Participant will receive one lump sum
payment on or before such Participant's required beginning
date equal to his entire Account balance and annual lump sum
payments thereafter of amounts accrued during each Plan Year.
The commencement of payments under this Section 6.02 shall not
constitute an Annuity Starting Date for purposes of Sections 72,
401(a)(11) and 417 of the Code. Upon the Participant's subsequent
termination of employment, payment of the Participant's Accounts shall
be made in accordance with the provisions of Section 6.04.
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6.03 SMALL BENEFITS
Notwithstanding any provision of the Plan to the contrary, a lump sum
payment shall be made in lieu of all vested benefits if the value of
the Participant's nonforfeitable Accrued Benefit as of his termination
of employment or as of any subsequent Anniversary Date is $5,000 or
less. The lump sum payment shall automatically be made as soon as
administratively practicable following the Participant's termination
date or the last day of any Plan Year thereafter. For this purpose, the
termination date is (a) for periods prior to January 1, 2000, the
Participant's last active day of service plus all remaining earned or
accrued vacation and any other accrued benefit days, and (b) for
periods after December 31, 1999, the Participant's last active day
of service. To the extent permitted by law, if the Participant's
nonforfeitable Accrued Benefit exceeds $5,000 upon an initial
determination, the Participant's nonforfeitable Accrued Benefit shall
be reviewed annually as of the last day of each subsequent Plan Year.
If at that time its value is $5,000 or less, a lump sum benefit payable
shall be made as soon as practicable following that determination. In
no event shall a lump sum payment be made following the date payments
have commenced as an annuity or in installments.
6.04 METHOD OF PAYMENT OF ACCRUED BENEFIT
(a) Subject to Section 5.04, after all required accounting
adjustments, the Trustee shall make payment of the
Participant's vested Accrued Benefit in a lump sum
distribution except as provided under the provisions of
Section 6.04(b) in relation to the account balances merged
from the Cotter Plan, under Section 6.04(c) in relation to the
account balances merged from the SERVISTAR Plan, and under
Section 6.04(d) and (e) in relation to the account balances
merged from the Coast Plan.
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(b) For account balances merged into this Plan from the Cotter
Plan effective as of January 1, 1998, in the case of a
Participant (or Beneficiary) in the Cotter Plan who had an
Account balance in that plan on January 1, 1989, the Account
balance merged into this Plan may also be distributed in a
series of quarterly installments over a period of fifteen
years (or, if less, the life expectancy of the Participant and
his designated Beneficiary; provided that, if such Beneficiary
is not the Participant's spouse and is more than ten 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 ten years younger than the
Participant).
(c) For Account balances merged into this Plan from the SERVISTAR
Plan effective as of January 1, 1998, a Participant shall have
an additional method of payment available in relation to those
merged accounts. A Participant may elect, in such manner as
the Committee shall prescribe, to receive payment in
substantially equal installments under a fixed reasonable
period of time, not exceeding the life expectancy of the
Participant, or the joint life and last survivor expectancy of
the Participant and an individual the Participant designates
as his Beneficiary. Furthermore, upon the Participant's
written request, the Committee, in his sole discretion, may
accelerate the payment of all, or any portion, of the
Participant's unpaid Accrued Benefit.
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(d) For account balances merged into the SERVISTAR Plan from the
Coast Plan effective as of October 21, 1996, and subsequently
merged into this Plan as of January 1, 1998, a Participant
shall have an additional method of payment available in
relation to those merged accounts (except as provided in
Section 6.04(e) relating to the Pension Account). A
Participant may elect, in such manner as the Committee shall
prescribe, to receive a purchased nonforfeitable fixed
annuity, in the form of a Qualified Joint and Survivor
Annuity. A Participant may elect not to take the Qualified
Joint and Survivor Annuity and to take instead a life annuity
or a lump sum payment. Elections under this subsection shall
be in writing and in the event of an election of a life
annuity or a lump sum payment by a married Participant, shall
be subject to receipt by the Committee of Spousal Consent to
that election.
(e) (i) Notwithstanding the foregoing provisions of this
Article, the amounts credited to the Participant's
Pension Account shall be paid:
(A) In the form of a life annuity if the
Participant is unmarried on his Annuity
Starting Date; or
(B) In the form of a Qualified Joint and Survivor
Annuity if the Participant is married on his
Annuity Starting Date;
unless the Participant elects otherwise pursuant to
subsection (ii) below. Annuities shall be purchased
from an insurance company in accordance with such
procedures as the Committee shall prescribe.
(ii) Alternatively, a married Participant may elect to
receive his Pension Account in the form of a life
annuity or in a lump sum payment. An election
pursuant to this subsection (ii) shall be in writing
and filed with
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the Committee at any time during the 90-day period
ending on the Participant's Annuity Starting Date. A
married Participant's election of a lump sum or life
annuity shall not be effective without Spousal
Consent.
(iii) Notwithstanding the foregoing provisions of this
Article, if a Participant dies before his Accounts
have been distributed, the value of his Pension
Account shall be distributed as follows:
(A) if the Participant is unmarried on his date
of death, it shall be paid in a lump sum to
his Beneficiary as soon as practicable; or
(B) if the Participant is married on his date of
death, it shall be used to purchase a
nonforfeitable fixed annuity for the life of
his spouse unless the spouse elects, in
accordance with such procedures as the
Committee shall prescribe, to receive a lump
sum payment in lieu thereof. Annuity payments
shall commence as soon as administratively
practicable following the Valuation Date
coincident with or next following what would
have been the Participant's 62th birthday,
unless the spouse elects to have reduced
annuity payments commence as soon as
administratively practicable following the
Valuation Date coincident with or next
following the Participant's date of death.
(f) The Committee shall furnish to each Participant a written
explanation in nontechnical language of the terms and
conditions of the payments available to the Participant in the
normal and optional forms. Such explanation shall include a
general description of the eligibility conditions for, and the
material features and relative values of, the optional forms
of payment under the Plan, any rights the
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Participant may have to defer commencement of his payment, the
requirement for Spousal Consent, and the right of the
Participant to make, and to revoke, elections. The Committee
must provide the notice no more than 90 days and no less than
30 days prior to the Participant's Annuity Starting Date. A
Participant's Annuity Starting Date may not occur less than
30 days after receipt of the notice. An election shall be made
on a form provided by the Committee and may be made during the
90-day period ending on the Participant's Annuity Starting
Date, but not prior to the date the Participant receives the
written explanation described herein. However, a Participant
may, after having received the notice, affirmatively elect to
have his benefit commence sooner than 30 days following his
receipt of the notice, provided all of the following
requirements are met:
(i) the Committee clearly informs the Participant that he
has a period of at least 30 days after receiving the
notice to decide when to have his benefits begin and,
if applicable, to choose a particular optional form
of payment;
(ii) the Participant affirmatively elects a date for his
benefits to begin and, if applicable, an optional
form of payment, after receiving the notice;
(iii) the Participant is permitted to revoke his election
until the later of his Annuity Starting Date or seven
days following the day he received the notice; and
(iv) payment does not commence less than seven days
following the day after the notice is received by the
Participant.
An election of an option may be revoked on a form provided by
the Committee, and subsequent elections and revocations may be
made at any time and from
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time to time during the election period. An election of an
optional benefit shall be effective on the Participant's
Annuity Starting Date and may not be modified or revoked after
his Annuity Starting Date unless otherwise provided. A
revocation of any election shall be effective when the
completed form is filed with the Committee. If a Participant
who has elected an optional benefit dies before the date the
election of the option becomes effective, the election shall
be revoked. If the Beneficiary designated under an option dies
before the date the election of the option becomes effective,
the election shall be revoked.
(g) Upon the death of the Participant, the Committee shall direct
the Trustee to pay the Participant's vested Accrued Benefit in
accordance with this subsection. If the Participant's death
occurs after the Trustee has commenced payment of the
Participant's vested Accrued Benefit, the Committee shall
direct the Trustee to complete payment over a period which
does not exceed the payment period which had commenced. If the
Participant's death occurs prior to the time the Trustee
commences payment of the Participant's vested Accrued Benefit,
the payment shall be a lump sum payment except as otherwise
provided herein and in no event will the Committee direct the
Trustee to make payment over a period exceeding (i) five years
after the date of the Participant's death, or (ii) if the
Beneficiary is a designated Beneficiary, in installments over
the Beneficiary's life expectancy. The Committee shall not
direct payment of the Participant's vested Accrued Benefit
over a period described in (i) unless the Trustee will
commence payment to the designated Beneficiary no later than
one year after the date of the Participant's death or, if
later, and the designated Beneficiary is the Participant's
surviving spouse, the date the Participant would have attained
age 70 1/2. The Committee will not recalculate life
expectancies.
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(h) Notwithstanding any other provision of this Article 6, all
distributions from this Plan shall conform to the regulations
issued under Section 401(a)(9) of the Code, including the
incidental death benefit provisions of Section 401(a)(9)(G) of
the Code. Further, such regulations shall override any Plan
provision that is inconsistent with Section 401(a)(9) of the
Code.
6.05 STATUS OF ACCOUNTS PENDING DISTRIBUTION
Until completely distributed under Section 6.01 or 6.02 the Accounts of
a Participant who is entitled to a distribution shall continue to be
invested as part of the Investment Funds of the Plan.
6.06 PROOF OF DEATH AND RIGHT OF BENEFICIARY OR OTHER PERSON
The Committee may require and rely upon such proof of death and such
evidence of the right of any Beneficiary or other person to receive the
value of the Accounts of a deceased Participant as the Committee may
deem proper and its determination of the right of that Beneficiary or
other person to receive payment shall be conclusive.
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6.07 DIRECT ROLLOVER OF CERTAIN DISTRIBUTIONS
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the
distributee in a direct rollover. The following definitions apply to
the terms used in this Section:
(a) "Eligible rollover distribution" means any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated Beneficiary,
or for a specified period of 10 years or more, any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code, and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities);
(b) "Eligible retirement plan" means an individual retirement
account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a
qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity;
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(c) "Distributee" means an Associate or former Associate. In
addition, the Associate's or former Associate's surviving
spouse and the Associate's or former Associate's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the
spouse or former spouse; and
(d) "Direct rollover" means a payment by the Plan to the eligible
retirement plan specified by the distributee.
ARTICLE 7. WITHDRAWALS AND LOANS
7.01 SAVINGS ACCOUNT WITHDRAWALS
The Participant may withdraw from the Trust Fund all or part of his
Savings Account.
7.02 DEFERRAL ACCOUNT WITHDRAWALS AFTER AGE 59 1/2
A Participant who has attained age 59 1/2 may elect to withdraw any
portion or all of his Deferral Account balance while continuing to be
employed by the Company or an Affiliated Company. Each election by a
Participant under this Section 7.02 shall be made at such time and in
such manner as the Committee shall determine.
7.03 DEFERRAL ACCOUNT WITHDRAWALS
A Participant who has withdrawn the total amount available for
withdrawal under the Sections 7.01 and 7.02 may elect to withdraw all
or part of the Income Deferral Contributions (but not the earnings
thereon) made on his behalf to his Deferral Account upon furnishing
proof to the Committee that a financial hardship has caused an
immediate and heavy financial need on the Participant. For the purposes
of this subsection, a financial hardship shall include:
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(a) expenses for medical care described in Section 213(d) of the
Code incurred by the Participant, his spouse or dependents (as
defined in Section 152 of the Code), or not yet incurred but
necessary for those persons to obtain medical care;
(b) costs directly related to the purchase of a principal
residence of the Participant (excluding mortgage payments);
(c) payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant, his
spouse, his children or dependents;
or
(d) payment of amounts necessary to prevent the eviction of the
Participant from his principal residence or to avoid
foreclosure in the mortgage of the Participant's principal
residence.
The amount to be withdrawn shall not exceed the amount
required to meet the immediate financial need created by the
hardship, including amounts necessary to pay any taxes or
penalties reasonably anticipated to result from the
withdrawal.
The Participant must request, on such form as the Committee
shall prescribe, that the Committee make its determination of
the necessity for the withdrawal solely on the basis of his
application. In that event, the Committee shall make such
determination, provided all of the following requirements are
met:
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(e) the Participant has obtained all distributions, other than
distributions available only on account of hardship, and all
nontaxable loans currently available under all plans of the
Company and any Affiliated Company,
(f) the Participant is prohibited from making Income Deferral
Contributions to the Plan and all other plans of the Company
and any Affiliated Company under the terms of such plans or by
means of an otherwise legally enforceable agreement for at
least 12 months after receipt of the distribution, and
(g) the limitation on elective deferrals described in Section
3.01(b) under all plans of the Company and any Affiliated
Company for the calendar year following the year in which the
withdrawal is made must be reduced by the Participant's
elective deferral made in the calendar year of the
distribution for hardship. For purposes of subsection (f),
"all other plans of the Company and any Affiliated Company"
shall include stock option plans, stock purchase plans,
qualified and nonqualified deferred compensation plans and
such other plans as may be designated under regulations issued
under Section 401(k) of the Code, but shall not include health
and welfare benefit plans or the mandatory employee
contribution portion of a defined benefit plan.
However, such rules shall not require a Participant to take any action
that would increase, rather than alleviate the financial hardship.
7.04 WITHDRAWAL PROCEDURES
Withdrawal requests must be made on forms provided by the Committee.
Any withdrawals will be made pro rata from each of the Participant's
Investment Funds based on the values determined on the Valuation Date
immediately preceding the
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withdrawal. An administrative fee as established from time to time by
the Committee may be assessed on each withdrawal. If a loan and a
hardship withdrawal are processed as of the same Valuation Date, the
amount available for the hardship withdrawal will equal the vested
portion of the Participant's Accounts on such Valuation Date reduced by
the amount of the loan. Subject to the provisions of Section 6.07, all
payments to Participants under this Article shall be made in cash as
soon as practicable.
7.05 LOANS TO PARTICIPANTS
(a) A Participant who is an Associate of the Company or an
Affiliated Company may borrow, on written application to the
Committee and on approval by the Committee under such uniform
rules as it shall adopt, an amount which, when added to the
outstanding balance of any other loans to the Participant from
the Plan, does not exceed the lesser of
(i) 50% of the vested portion of his Accounts (excluding
the Pension Account), or
(ii) $50,000 reduced by the excess, if any, of (A) the
highest outstanding balance of loans to the
Participant from the Plan during the one year period
ending on the day before the day the loan is made,
over (B) the outstanding balance of loans to the
Participant from the Plan on the date on which the
loan is made. The minimum loan shall be $1,000.
(b) A reasonable interest rate to be charged on loans made shall
be determined at the time of the loan application and shall be
specified by the Committee. The interest rate so determined
for purposes of the Plan shall be fixed for the duration of
each loan.
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(c) The amount of the loan is to be transferred from the
Participant's Accounts, in the following order: first, from
the Deferral Account, then from the Savings Account, then from
the Rollover Account, then from the Matching Account, and last
from the Profit Sharing Account, pro rata from each Investment
Fund thereunder to a special "loan fund" for the Participant
under the Plan. The loan fund consists solely of the amount of
the Participant's Account transferred to the loan fund and is
invested solely in the loan made to the Participant. The
amount of the Participant's Account transferred to the loan
fund shall be pledged as security for the loan. Payments of
principal on the loan will reduce the amount held in the
Participant's loan fund. Those payments, together with the
attendant interest payment, will be credited to the
Participant's Accounts in the following order: first, to the
Profit Sharing Account, then to the Matching Account, then to
the Rollover Account, then to the Savings Account, and finally
to the Deferral Account, and invested in the Investment Funds
in accordance with the Participant's then effective investment
election.
(d) In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(i) An application for a loan by a Participant may be
made by telephone to the Trustee or its agent, who
will process the application for approval by a Plan
representative, whose action in approving or
disapproving the application shall be made pursuant
to uniform nondiscriminatory policies and shall be
final;
(ii) Each loan shall be evidenced by a promissory note
payable to the Plan containing terms deemed necessary
by the Committee to protect the Plan's investment;
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(iii) The period of repayment for any loan shall be arrived
at by mutual agreement between the Committee and the
Trustee or its agent, but that period shall not
exceed 60 months unless the loan is to be used in
conjunction with the purchase of a dwelling which
within a reasonable time is to be used (determined at
the time of the loan) as the principal residence of
the Participant in which event the period shall not
exceed 180 months;
(iv) Payments of principal and interest will be made by
payroll deductions or in a manner agreed to by the
Participant and the Trustee or its agent in
substantially level amounts, but no less frequently
than quarterly, in an amount sufficient to amortize
the loan over the repayment period;
(v) Loan repayments will be suspended under this Plan as
permitted under Section 414(u) of the Code;
(vi) A loan may be prepaid in full as of any date
following the first three months of the loan period,
without penalty (partial prepayment of principal is
not permitted);
(vii) Only one loan may be outstanding at any given time,
except that any loans outstanding as of January 1,
1998 may continue until repaid under their
established terms.
(viii) A loan processing fee and annual maintenance fee may
be charged by the Plan, as determined by the
Committee.
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(e) If a loan is not repaid in accordance with the terms contained
in the promissory note and a default occurs, the Plan may
execute upon its security interest in the Participant's
Account under the Plan to satisfy the debt and any other
security held by the Plan; however, the Plan shall not levy
against any portion of the loan fund attributable to amounts
held in the Participant's Deferral Account or Matching Account
or Profit Sharing Account until such time as a distribution of
the Deferral Account or Matching Account or Profit Sharing
Account could otherwise be made under the Plan.
(f) Any additional rules or restrictions as may be necessary to
implement and administer the loan program shall be in writing
and communicated to Associates. Such further documentation is
hereby incorporated into the Plan by reference, and the
Committee is hereby authorized to make such revisions to these
rules as it deems necessary or appropriate, on the advice of
counsel.
(g) To the extent required by law and under such rules as the
Committee shall adopt, loans shall also be made available on a
reasonably equivalent basis to any Beneficiary or former
Associate (i) who maintains an account balance under the Plan
and (ii) who is still a party-in-interest (within the meaning
of Section 3(14) of ERISA).
(h) If, on a Participant's Severance Date, any loan or portion of
a loan made to him under the Plan, together with the accrued
interest thereon, remains unpaid, the entire amount of the
unpaid loan and accrued interest shall be due and payable by
the Participant; provided that, if such amount is not repaid,
an amount equal to such loan or any part thereof, together
with the accrued interest thereon, shall be charged to the
Participant's Accounts after all other adjustments required
under the Plan, but before any distribution pursuant to
Section 6.04.
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(i) All loans made prior to January 1, 1998 shall be subject to
the rules in effect under the Plan at that time the loan was
made.
7.06 MISSING PARTICIPANTS AND BENEFICIARIES
Each Participant and each designated Beneficiary must file with the
Committee 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 Committee, or if no address is filed with the
Committee 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. Neither
the Company nor the Committee will be required to search for or locate
a Participant or Beneficiary. If the Committee 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 Committee within three years after the notification, the
benefits of the Participant or Beneficiary will be disposed of, to the
extent permitted by applicable law, as follows:
(a) If the whereabouts of the Participant then is unknown to the
Committee but the whereabouts of the Participant's spouse then
is known to the Committee, payment will be made to the spouse;
(b) If the whereabouts of the Participant and his spouse, if any,
then is unknown to the Committee but the whereabouts of the
Participant's designated Beneficiary then is known to the
Committee, payment will be made to the designated Beneficiary;
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(c) If the whereabouts of the Participant, his spouse and the
Participant's designated Beneficiary then is unknown to the
Committee but the whereabouts of one or more relatives by
blood, adoption or marriage of the Participant is known to the
Committee, the Committee may direct the Trustee to pay the
Participant's benefits to one or more of such relatives and in
such proportions as the Committee decides; or
(d) If the whereabouts of such relatives and the Participant's
designated Beneficiary then is unknown to the Committee, then
benefits of such Participant or Beneficiary will be disposed
of in an equitable manner permitted by law under rules adopted
by the Committee.
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ARTICLE 8. ADMINISTRATION OF THE PLAN
8.01 COMMITTEE
This Plan administrator shall be the Committee composed of five or more
persons who may, but need not be, Associates of the Company, as
appointed by the Company. Any Committee member may be dismissed at any
time, with or without cause, on 10 days' notice from the Company. Any
Committee member may resign by delivering his written resignation to
the Company with 10 day's notice. Vacancies rising by the death,
resignation or removal of a Committee member shall be filled by the
Company.
8.02 MEETING, MAJORITY RULE
(a) The Committee shall hold meetings upon such notice, at such
place or places and at such time or times as it may from time
to time determine. Notice shall not be required if waived in
writing. A majority of the members of the Committee at the
time in office shall constitute a quorum for the transaction
of business. All resolutions or other actions take by the
Committee at any meeting shall be by majority vote of the
members of the Committee. Resolutions may be adopted or other
action taken without a meeting upon written consent, signed by
a majority of the members of the Committee. 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 shall decide the matter and
his decision shall control.
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(b) The Committee shall appoint one of its members to act as its
chairman and shall appoint a secretary, who need not be a
member of the Committee, who shall keep all records of the
meetings and of any action taken by the Committee and who
shall perform such other services as may be prescribed by the
Committee. All third parties may rely on a certificate of the
Committee's secretary or a majority of the Committee members
that the Committee has taken or authorized any action. A
Committee member by writing may delegate any or all of his
rights, powers, duties or discretions to any other member,
with the consent of the latter. 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.
(c) The Committee may, by written majority decision, delegate to
each or any of its number or to its secretary authority to
sign any documents on its behalf, or to perform ministerial
acts, but no person to whom such authority is delegated shall
perform any act involving the exercise of any discretion
without first obtaining the concurrence of a majority of the
members of the Committee, even though he alone may sign any
document required by third parties. If at any time there will
be less than three members of the Committee in office, pending
the appointment of a successor(s) to fill an existing vacancy,
the remaining members shall have the authority to act as
Committee.
(d) 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.
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8.03 RESPONSIBILITY FOR ADMINISTRATION OF THE PLAN
The Committee shall have complete control of the management, operation
and administration of this Plan with all powers necessary to enable it
to carry out its duties in that respect, including to adopt such rules
or procedures and regulations 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. The Committee shall be
designated agent for service of legal process.
Without limiting the foregoing, the Committee shall have the following
specific duties and responsibilities:
(a) to maintain and retain records relating to Plan Participants,
former Participants and each of their Beneficiaries, and all
other records necessary for the proper operation of the Plan
and to furnish the Company or any Affiliated Company with such
information as may be required by them;
(b) to prepare and furnish during normal business hours to
Participants all information required under Federal law or
provisions of this Plan to be furnished to them;
(c) to prepare and furnish to the Trustee sufficient Associate
data and the amount of contributions received from all sources
so that the Trustee may maintain separate Accounts for
Participants and make required payments of benefits;
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(d) to provide directions to the Trustee with respect to the
methods of benefit payment, all other matters where called for
in the Plan or requested by the Trustee;
(e) to prepare and file or publish with the Secretary of Labor,
the Secretary of the Treasury, their delegates and all other
appropriate government official all reports, forms, documents,
and other information required under law to be so filed or
published;
(f) to construe and interpret the provisions of the Plan, to
correct defects therein, to supply omissions thereto and
determine all questions of fact (including, but not limited
to, determination of an individual's eligibility to Plan
participation, the right and amount to any benefit payable
under the Plan, and the date on which any individual ceases to
be a Participant) that may arise thereunder and any such
construction or determination shall be conclusively binding
upon all persons interested in the Plan to the extent
permitted by applicable law;
(g) to engage such assistants or representatives as deemed
necessary for the effective exercise of duties and to allocate
and delegate to such assistants or representatives any powers
or duties, both ministerial and discretionary, as deemed
expedient and appropriate, provided that any allocation or
delegation and the acceptance thereof shall be in writing;
(h) to engage such professional consultants in its sole
discretion, deemed necessary or advisable, including, but not
limited to, accountants, attorneys, consultants, and medical
practitioners;
(i) to arrange for bonding as required by law; and
(j) to provide procedures for determination of claims for
benefits.
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8.04 COMPENSATION AND EXPENSES
The members of the Committee and any individual who receives full-time
pay from the Company or any Affiliated Company shall serve without
compensation for their services to the Plan but shall be reimbursed by
the Company for all necessary expenses incurred in the discharge of
their duties.
8.05 LIMITATION OF LIABILITY
The Company, any Affiliated Company, their Board of Directors, the
Committee, and any officer, Associate or agent of the Company or an
Affiliated Company shall not incur any liability individually or on
behalf of any other individuals or on behalf of the Company or an
Affiliated Company for any act or failure to act, made in good faith in
relation to the Plan or the funds of the Plan. However, this limitation
shall not act to relieve any such individual or the Company or an
Affiliated Company from a responsibility or liability for any fiduciary
responsibility, obligation or duty under Part 4, Title I of ERISA.
8.06 INDEMNIFICATION
The Company, any Affiliated Company, their Board of Directors, the
Committee and the officers, Associates and agents of the Company or an
Affiliated Company shall be indemnified against any and all liabilities
arising by reason of any act, or failure to act, in relation to the
Plan or the funds of the Plan, including, without limitation, expenses
reasonably incurred in the defense of any claim relating to the Plan or
the funds of the Plan, and amounts paid in any compromise or settlement
relating to the Plan or the funds of the Plan, except such liability,
losses or costs which result from:
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(a) actions or failures to act made in bad faith;
(b) their own gross negligence or willful misconduct;
(c) any settlement, without the Company's prior approval, of an
action, suit, or proceeding; or
(d) suits or actions at law or in equity advanced by the Company
against such party. Indemnification shall be from the funds of
the Plan to the extent of those funds and to the extent
permitted under applicable law; otherwise from the assets of
the Company. Rights granted hereunder shall be in addition to
and not in lieu of any rights to indemnification to which the
Committee member may be entitled pursuant to the by-laws of
the Company. Service on the Committee shall be deemed in
partial fulfillment of the Committee member's function as an
Associate, officer and/or director of the Company, if he
serves in such other capacity as well. The foregoing shall not
relieve any one of them from any responsibility or liability
for responsibility, obligation or duty that they may have
pursuant to ERISA.
8.07 PRUDENT CONDUCT
The Committee shall use that degree of care, skill, prudence and
diligence that a prudent man acting in a like capacity and familiar
with such matters would use in his conduct of a similar situation and
shall administer the Plan on a reasonable and nondiscriminatory basis
and shall apply uniform rules to all persons similarly situated.
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8.08 SERVICE IN MORE THAN ONE FIDUCIARY CAPACITY
Any individual, entity or group of persons may serve in more than one
fiduciary capacity with respect to the Plan and/or the funds of the
Plan.
8.09 WRITTEN ELECTIONS
Any elections, notifications or designations made by a Participant
pursuant to the provisions of the Plan shall be made in writing and
filed with the Committee in a time and manner determined by the
Committee under rules uniformly applicable to all Associates similarly
situated. The Committee reserves the right to change from time to time
the time and manner for making notifications, elections or designations
by Participants under the Plan if it determines after due deliberation
that such action is justified in that it improves the administration of
the Plan. In the event of a conflict between the provisions for making
an election, notification or designation set forth in the Plan and such
new administrative procedures, those new administrative procedures
shall prevail.
ARTICLE 9. MANAGEMENT OF FUNDS
9.01 TRUST AGREEMENT
All the funds of the Plan shall be held by a Trustee appointed from
time to time by the Board of Directors under a Trust Agreement adopted,
or as amended, by the Board of Directors for use in providing the
benefits of the Plan and paying its expenses not paid directly by the
Company. The Company shall have no liability for the payment of
benefits under the Plan nor for the administration of the funds paid
over to the Trustee. Neither the Committee nor the Company or any
Affiliated Company in any way guarantees the Trust Fund from loss or
depreciation.
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9.02 EXCLUSIVE BENEFIT RULE
Except as otherwise provided in the Plan, no part of the corpus or
income of the funds of the Plan shall be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and other
persons entitled to benefits under the Plan and paying the expenses of
the Plan not paid directly by the Company. No person shall have any
interest in or right to any part of the earnings of the funds of the
Plan, or any right in, or to, any part of the assets held under the
Plan, except as and to the extent expressly provided in the Plan.
9.03 APPOINTMENT OF INVESTMENT MANAGER
The Company may, in its discretion, appoint one or more investment
managers (within the meaning of Section 3(38) of ERISA) to manage
(including the power to acquire and dispose of) all or part of the
assets of the Plan, as the Company shall designate. In that event
authority over and responsibility for the management of the assets so
designated shall be the sole responsibility of that investment manager.
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ARTICLE 10. AMENDMENT, TERMINATION, MERGERS AND CONSOLIDATIONS OF THE PLAN
10.01 PLAN AMENDMENT
The Company, by action of its Board of Directors, reserves the right at
any time and from time to time, and retroactively if deemed necessary
or appropriate, to amend in whole or in part any or all of the
provisions of the Plan. However, no 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 persons entitled to
benefits under the Plan. No amendment shall be made which has the
effect of decreasing the balance of the Accounts of any Participant or
of reducing the nonforfeitable percentage of the balance of the
Accounts of a Participant below the nonforfeitable percentage computed
under the Plan as in effect on the date on which the amendment is
adopted or, if later, the date on which the amendment becomes
effective.
Notwithstanding the foregoing, the duties and liabilities of the
Committee cannot be changed substantially without its consent.
10.02 PLAN TERMINATION
(a) The Company expects to continue this Plan and the payment of
its contributions hereunder indefinitely, but the continuance
of this Plan is not assumed as a contractual obligation of the
Company, and the Company expressly reserves the right to
discontinue the Plan in its entirety at any time for any
reason whatsoever upon 30 day's advance written notice of
termination given to the Committee, the Trustee and any other
participating Affiliated Companies.
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(b) In the event of the full or partial termination of this Plan
or upon the permanent discontinuance of Company contributions
under the Plan, the rights of all affected Participants to the
amounts credited to the affected Participants' Accounts shall
be nonforfeitable. Said Plan termination or discontinuance of
contributions shall be effective as of the date specified by
resolution of the Board of Directors.
(c) Termination of the Plan shall have no effect upon payment of
installments and benefits to former Participant and their
Beneficiaries, whose benefit payments commenced prior to Plan
termination. The Trustee shall retain sufficient assets to
complete any such payments, and shall have the right, upon
direction by the Committee, to purchase annuity contracts to
assure the completion of such payments or to pay the value of
the remaining payments in a lump sum distribution.
(d) The Company shall instruct the Trustee either (1) to continue
to manage and administer the assets of the Trust for the
benefit of the Participants and their Beneficiaries pursuant
to the terms and provisions of the applicable trust agreement,
or (2) to pay over to each Participant (and any vested former
Participant) the value of his vested interest, and to
thereupon dissolve the Trust Fund.
(e) Upon termination of the Plan, Income Deferral Contributions,
with earnings thereon, shall only be distributed to
Participants if (1) neither the Company nor an Affiliated
Company establishes or maintains a successor defined
contribution plan, and (2) payment is made to the Participants
in the form of a lump sum distribution (as defined in Section
402(d)(4) of the Code, without regard to
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clauses (i) through (iv) of subparagraph (A), subparagraph
(B), or subparagraph (F) thereof). For purposes of this
paragraph, a "successor defined contribution plan" is a
defined contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of the Code
("ESOP") or a simplified employee pension as defined in
Section 408(k) of the Code ("SEP")) which exists at the time
the Plan is terminated or within the 12-month period beginning
on the date all assets are distributed. However, in no event
shall a defined contribution plan be deemed a successor plan
if fewer than 2% of the Associates who are eligible to
participate in the Plan at the time of its termination are or
were eligible to participate under another defined
contribution plan of the Company or an Affiliated Company
(other than an ESOP or a SEP) at any time during the period
beginning 12 months before and ending 12 months after the date
of the Plan's termination.
10.03 MERGERS AND CONSOLIDATIONS OF PLANS
In the event of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan, each Participant in the event of
termination shall have a benefit in the surviving or transferee plan
(determined as if such plan were then terminated immediately after such
merger, etc.) that is equal to or greater than the benefit he would
have been entitled to receive immediately before such merger, etc. in
this Plan (had this Plan been terminated at that time). For the
purposes hereof, former Participants and Beneficiaries shall be
considered Participants.
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10.04 DISTRIBUTION OF ACCOUNTS UPON A SALE OF ASSETS OR A SALE OF A
SUBSIDIARY
Upon the disposition by the Company of at least 85% of the assets
(within the meaning of Section 409(d)(2) of the Code) used by the
Company in a trade or business or upon the disposition by the Company
of its interest in a subsidiary (within the meaning of Section
409(d)(3) of the Code), Income Deferral Contributions, with earnings
thereon, may be distributed to those Participants who continue in
employment with the employer acquiring such assets or with the sold
subsidiary, provided that:
(a) the Company maintains the Plan after the disposition,
(b) the buyer does not adopt the Plan or otherwise become a
participating employer in the Plan and does not accept any
transfer of assets or liabilities from the Plan to a plan it
maintains in a transaction subject to Section 414(l)(1) of the
Code, and
(c) payment is made to the Participant in the form of a lump sum
distribution (as defined in Section 402(d)(4) of the Code,
without regard to clauses (i) through (iv) of subparagraph
(A), subparagraph (B), or subparagraph (F) thereof).
10.05 REORGANIZATIONS
No Plan termination will occur solely as a result of the judicially
declared bankruptcy or insolvency of the Company or any participating
Affiliated Company, or the dissolution, merger, consolidation or
reorganization of the Company or any participating Affiliated Company,
or the sale by the Company or any participating Affiliated Company of
all or substantially all of its assets, or the termination or complete
discontinuance of contributions by any Company. However, arrangements
may be made with the consent of the Company whereby the Plan will be
continued by any successor to the Company or any participating
Affiliated Company or any purchaser of all or substantially all of its
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assets, in which case the successor or purchaser will be substituted
for the Company or any participating Affiliated Company under the Plan
and the Trust Agreement; provided that, if the Company or any
participating Affiliated Company is merged, dissolved, or in any other
way organized into, or consolidated with, any other employer, the Plan
as applied to the Company or any participating Affiliated Company will
automatically continue in effect without a termination thereof.
ARTICLE 11. GENERAL PROVISIONS
11.01 APPLICABLE LAW
This Plan shall be construed, regulated and administered under the laws
of the State of Illinois, except where ERISA or any superseded law of
the United States controls.
11.02 NONALIENATION
(a) Except as required by applicable law or by paragraph (c), no
benefit under the Plan shall in any manner be anticipated,
assigned or alienated, and any attempt to do so shall be void.
However, payment shall be made in accordance with the
provisions of any judgment, decree, or order which:
(i) creates for, or assigns to, a spouse, former spouse,
child or other dependent of a Participant the right
to receive all or a portion of the Participant"s
benefits under the Plan for the purpose of providing
child support, alimony payments or marital property
rights to that spouse, child or dependent,
(ii) is made pursuant to a State domestic relations law,
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(iii) does not require the Plan to provide any type of
benefit, or any option, not otherwise provided under
the Plan, and
(iv) otherwise meets the requirements of Section 206(d) of
ERISA, as amended, as a "qualified domestic relations
order", as determined by the Committee.
(b) Notwithstanding anything herein to the contrary, if the amount
payable to the alternate payee under the qualified domestic
relations order is less than $5,000 such amount shall be paid
in one lump sum as soon as practicable following the
qualification of the order. If the amount exceeds $5,000, it
may be paid as soon as practicable following the qualification
of the order if the qualified domestic relations order so
provides and the alternate payee consents thereto; otherwise
it may not be payable before the earliest of (i) the
Participant's termination of employment, (ii) the time such
amount could be withdrawn under Article 7 or (iii) the
Participant's attainment of age 50.
(c) A Participant's benefit under the Plan shall be offset or
reduced by the amount the Participant is required to pay to
the Plan under the circumstances set forth in Section
401(a)(13)(C) of the Code.
11.03 SEVERABILITY OF PROVISIONS
If any provision of this Plan shall be held invalid and unenforceable,
such invalidity or unenforceability shall not affect any other
provisions hereof, and this Plan shall be construed and enforced as if
such provisions had not been included.
11.04 FACILITY OF PAYMENT
If the Committee shall find that a Participant or other person entitled
to a benefit is
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unable to care for his affairs because of illness or accident or
because he is a minor, the Committee may direct that any benefit due
him, unless claim shall have been made for the benefit by a duly
appointed legal representative, be paid to his spouse, a child, a
parent or other blood relative, or to a person with whom he resides.
Any payment so made shall be a complete discharge of the liabilities of
the Plan for that benefit.
11.05 GENDER AND NUMBER
Except where otherwise clearly indicated by context, the masculine and
the neuter shall include the feminine and the neuter, the singular
shall include the plural, and vice-versa.
11.06 CONDITIONS OF EMPLOYMENT NOT AFFECTED BY PLAN
The establishment of the Plan shall not confer any legal rights upon
any Associate or other person for a continuation of employment, nor
shall it interfere with the rights of the Company to discharge any
Associate and to treat him without regard to the effect which that
treatment might have upon him as a Participant or potential Participant
of the Plan.
11.07 ERRONEOUS ALLOCATIONS
Notwithstanding any provision of the Plan to the contrary, if a
Participant's Account is credited with an erroneous amount due to a
mistake in fact or law, the Committee shall adjust such Account in such
equitable manner as it deems appropriate to correct the erroneous
allocation.
11.08 ADDITIONAL PARTICIPATING EMPLOYERS
(a) If any company is or becomes an United States subsidiary of or
Associated with
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the Company, the Board of Directors may include the Associates
of that subsidiary or Associated company in the membership of
the Plan upon appropriate action by that company necessary to
adopt the Plan. In that event, or if any persons become
Associates of the Company as the result of merger or
consolidation or as the result of acquisition of all or part
of the assets or business of another company, the Board of
Directors shall determine to what extent, if any, previous
service with the subsidiary, Associated or other company shall
be recognized under the Plan, but subject to the continued
qualification of the trust for the Plan as tax-exempt under
the Code.
(b) Any subsidiary or Associated company may terminate its
participation in the Plan upon appropriate action by it. In
that event the funds of the Plan held on account of
Participant in the employ of that company, and any unpaid
balances of the Accounts of all Participants who have
separated from the employ of that company, shall be determined
by the Committee. Those funds shall be distributed as provided
in Section 10.02 if the Plan should be terminated, or shall be
segregated by the Trustee as a separate trust, pursuant to
certification to the Trustee by the Committee, continuing the
Plan as a separate plan for the Associates of that company
under which the board of directors of that company shall
succeed to all the powers and duties of the Board of
Directors, including the appointment of the members of the
committee.
ARTICLE 12. TOP-HEAVY PROVISIONS
The provisions of this Article shall become applicable under the circumstances
described in the
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following special provisions. In the event that the provisions contained in this
Article are inconsistent with the terms contained in the remainder of the Plan,
the provisions contained in this Article shall take precedence.
12.01 TOP-HEAVINESS DEFINED
(a) For purposes of this Article, the Plan shall be "top-heavy"
if, as of the Determination Date,
(i) the value of the aggregate of the account balances
under the Plan for key employees exceeds 60% of the
value of the aggregate of the Account balances under
the Plan for all Associates, or
(ii) the Plan is part of a required aggregation group, and
the sum of the present values of the cumulative
account balances and the aggregate present values of
accrued benefits of key employees in all plans in the
required aggregation group exceeds 60% of a similar
sum determined for all Associates. Notwithstanding
the results of the said 60% text, the Plan shall not
be considered top-heavy for any Plan Year in which
the Plan is in a required aggregation group or the
Company elects to treat the Plan as a part of a
permissive aggregation group and such group is not
determined to be top-heavy.
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(b) For purposes of this Article, the following terms shall be
interpreted according to the definitions assigned to them:
(i) "Account balance" means the sum of (i) the balance of
a Participant's Accounts as of the most recent
Valuation Date occurring within the 12- month period
ending on the determination date, and (ii) the value
of any contributions actually made after the
Valuation Date but on or prior to the determination
date. The term shall include the aggregate
distributions made with respect to such Participant
under the Plan during the five-year period ending on
the determination date but shall not include any
qualifying rollover distributions (or similar
transfers) initiated by the Associate, and shall not
include the account balance of a nonkey employee who
was a key employee for any prior Plan Year, or the
account balance of any Participant who has not
performed services for the Company during the
five-year period ending on the determination date.
(ii) "Compensation" means the amount paid to the Associate
by the Company as stated on the Associate's Form W-2
for the calendar year that ends with or within the
applicable Plan Year, but such amount shall be deemed
not to exceed the Annual Dollar Limit.
(iii) "Defined benefit plan" means a qualified pension plan
which is not a defined contribution plan; however, in
the case of a defined benefit plan which provides a
benefit which is based partly on the balance of the
separate account of a Participant, that plan shall be
treated as a defined contribution plan to the extent
benefits are based on the separate
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account of a Participant and as a defined benefit
plan with respect to the remaining portion of the
benefits under the plan.
(iv) "Defined contribution plan" means a qualified plan
which provides for an individual account for each
Participant and for benefits based solely upon the
amount contributed to the Participant's account, and
any income, expenses, gains and losses, and any
forfeitures of accounts of other Participants which
may be allocated to that Participant's accounts,
subject to (iii) above.
(v) "Determination date" means the last day of the
preceding Plan Year, or in the case of the first Plan
Year, the last day of that Plan Year.
(vi) "5% owner of the Company" means any person who either
directly or constructively (as defined in Section 318
of the Code) owns more than 5% of either the value of
the outstanding stock of the Company or the total
combined voting power of all of the Company's stock.
(vii) Associate includes such Beneficiary or beneficiaries
who obtain an interest in the Plan by Beneficiary
designation, will, devise or through the laws of
intestacy.
(viii) "Key Employee" means any Associate or former
Associate in this Plan who, at any time during the
Plan Year ending on the determination date, or during
any of the four preceding Plan Years which began
after 1982, was:
(A) An officer of the Company,
(B) A 5% owner of the Company,
(C) One of the top ten owners of the Company, or
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(D) A 1% owner of the Company having an annual
compensation of more than $150,000.
The term shall also include beneficiaries of key
employees.
(ix) "Nonkey employee" means any Associate who is not a
key employee.
(x) "Officer" means at any time during the Plan Year or
any four preceding Plan Years an Associate who serves
as an administrative executive for the Company or an
Affiliated Company on a regular and continuous basis
and during the applicable year has annual
compensation from the Company or an Affiliated
Company greater than 50% of the amount in effect
under Section 415(b)(1)(A) of the Code. The maximum
number of Associates who shall be deemed to be
officers for purposes of this Article shall be the
lesser of:
(A) 50, or
(B) The greater of 3, or 10% of all Associates.
If the actual number of officers of the Company
exceeds the maximum number of Associates who are
deemed to be officers hereunder, the maximum number
of officers for purposes of this Article shall
include those officers who had the highest one-year
compensation while serving as an officer of the
Company during any applicable Plan Year.
(xi) "1% owner of the Company" means any person, who
either directly or constructively (as defined in
Section 318 of the Code) owns more than 1% of either
the outstanding stock of the Company or the total
combined voting power of all of the Company's stock.
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(xii) "Permissive aggregation group" means each qualified
plan in the required aggregation group and any other
qualified defined benefit and defined contribution
plan of the Company or an Affiliated Company with
contributions or benefits at least comparable to the
contributions or benefits under this Plan in which
all members are nonkey employees, if the resulting
aggregation group continues to meet the requirements
of Section 401(a)(4) and 410 of the Code.
(xiii) "Required aggregation group" includes:
(A) Each qualified defined benefit plan and
defined contribution plan of the Company or
an Affiliated Company (regardless of whether
the Plan terminated within the past five
years) in which a key employee is a
Participant, and
(B) Each other qualified defined benefit and
defined contribution plan of the Company or
an Affiliated Company which enables any plan
described in paragraph (xiii)(A), above, to
meet the requirements of Section 401(a)(4)
or 410 of the Code.
(xiv) "Top ten owner" means the 10 Associates who own
directly or constructively (as defined in Section 318
of the Code) both more than "% ownership interest in
value and the largest percentage ownership interest
in value of the Company and any Affiliated Company
and during the applicable year have annual
compensation from the Company or an Affiliated
Company greater than 100% of the amount in effect
under Section 415(c)(1)(A) of the Code.
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12.02 COMPANY CONTRIBUTIONS
The following provisions shall be applicable to Participants for any
Plan Year with respect to which the Plan is top-heavy:
(a) If the required minimum contribution is not provided by the
Plan for any Participant who is a nonkey employee, then in
each Plan Year, in addition to the contributions otherwise
provided under the Plan, the Company shall make contributions
on behalf of any such Participant (or each Associate eligible
to become a Participant) who is a nonkey employee and who has
not separated from service as of the last day of the Plan Year
(regardless of whether the nonkey employee elects to make
Income Deferral Contributions) which, when added to the
Company contributions allocated to his Matching Account for
the Plan Year (and not needed to meet the Contribution
Percentage Test) will be equal to a percentage of the
Participant's compensation for the Plan Year, that percentage
to be the lesser of 3% or the percentage rate, determined for
the key employee for whom that percentage is the highest,
equivalent to the fraction the numerator of which is the
contribution allocated to that key employee in accordance with
this Section 12.02 and the denominator of which is the
compensation of the key employee for that Plan Year.
(b) For purposes of this Section 12.02, all defined contribution
plans required to be included in a required aggregation group
shall be treated as one plan. This Section 12.02 shall not
apply if this Plan is required to be included in a required
aggregation group under Section 12.01 and if this Plan enables
a defined benefit plan required to be included in such group
to meet the requirements of Section 401(a)(4) or 410 of the
Code.
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<PAGE> 65
(c) Notwithstanding the foregoing provisions, no minimum
contribution shall be made with respect to a Participant (or
an Associate eligible to become a Participant) if the required
minimum benefit under Section 416(c)(1) of the Code is
provided under a Company sponsored defined benefit plan.
12.03 VESTING
(a) The following provisions shall be applicable to Participants
for any Plan Year with respect to which the Plan is top-heavy:
(i) In lieu of the vesting schedule in Article 5 the
following shall apply:
<TABLE>
<CAPTION>
=====================================================
YEARS OF SERVICE VESTED PERCENTAGE
=====================================================
<S> <C>
Less than 2 Years 0%
2 but less than 3 years 20%
3 but less than 4 years 40%
4 but less than 5 years 60%
5 years or more 100%
=====================================================
</TABLE>
provided that in no event shall the vested portion of
the Matching Account be less than the percentage
under Article 5.
(ii) If the Plan is top-heavy with respect to a Plan Year
and ceases to be top-heavy for a subsequent Plan
Year, the following provisions shall be applicable:
(A) With respect to a Participant who has
completed at least three years of Service on
or before the last day of the most recent
Plan Year for which the Plan was top-heavy,
the vesting schedule set forth above shall
continue to be applicable, to the extent the
application of that schedule provides the
Participant with a greater
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<PAGE> 66
vested portion of his Matching Account than
that provided under the provisions of
Article 5.
(B) With respect to a Participant who has
completed at least 2, but less than 3, years
of Service on or before the last day of the
most recent Plan Year for which the Plan was
top-heavy, the vesting provisions of Article
5 shall again be applicable; provided,
however, that in no event shall the vested
portion of his Matching Account be less than
the percentage determined under paragraph
(A) above as of the last day of the most
recent Plan Year for which the Plan was
top-heavy.
12.04 IMPACT ON MAXIMUM BENEFITS
For any Plan Year in which the Plan is a top-heavy plan, Section 3.10
shall be read by substituting the number "1.0" for the number "1.25"
wherever it appears therein except such substitution shall not have the
effect of reducing any benefit accrued under a defined benefit plan
sponsored by the Company prior to the first day of the Plan Year in
which this provision becomes applicable.
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<PAGE> 67
TruServ Corporation herewith causes this Plan to be executed as of July 1, 2000
in accordance with a duly adopted resolution of the Board of Directors and by
its duly authorized officer on this 1st day of July, 2000.
TruServ Corporation
/s/ BILL EVANS, Director of Employee Benefits /s/ ROBERT OSTROV, SVP
--------------------------------------------- ------------------------------
Witness
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