<PAGE>
As filed with the Securities and Exchange Commission on May 22, 1995
Registration No. 33-
-----------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------
NATURE'S SUNSHINE PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
UTAH 87-0327982
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
75 East 1700 South
PROVO, UTAH 84605-9005
(Address of Principal Executive Offices)
--------------------------
NATURE'S SUNSHINE PRODUCTS, INC. TAX DEFERRED RETIREMENT PLAN
(Full title of the plan)
BRENT F. ASHWORTH
Nature's Sunshine Products, Inc.
75 East 1700 South
PROVO, UTAH 84606-7319
(Name and address of agent for service)
(801) 342-4300
(Telephone number, including area code, of agent for service)
Copies to: BRENT CHRISTENSEN, ESQ.
Van Cott, Bagley, Cornwall & McCarthy
50 South Main Street, Suite 1600
Salt Lake City, Utah 84144
(801) 532-3333
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Proposed
Securities Maximum Proposed Maximum Amount of
to be Amount to be Offering Price Aggregate Registration
Registered Registered(1) Per Share(2) Offering Price(2) Fee(2)
---------- ----------- ----------- ---------------- -----
<S> <C> <C> <C> <C>
Common Stock 750,000 Shares $12.88 $9,656,250 $3,329.74
(no par value)
<FN>
-----------------------
(1)In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
as amended, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan described
herein.
(2)Estimeated pursuant to Rule 457(c) and (h), on the basis of the average
of the high and low prices of the registrant's Common Stock as reported by the
NASDAQ National Market System on May 16, 1995, a date within five business days
prior to the date of filing of this Registration Statement.
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION.
The documents containing the information specified in Part I of Form S-8
(plan information and registrant information) will be sent or given to employees
as specified by Securities and Exchange Commission Rule 428(b)(1). Such
documents need not be filed with the Securities and Exchange Commission either
as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of
Part II hereof, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act of 1933.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
See response to Item 1. above.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the registrant with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934 (File No 0-8707) are incorporated herein by reference:
(a) The registrant's latest Annual Report filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 ("Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the registrant's
document referred to in subparagraph (a), above;
(c) Description of the registrant's Common Stock contained in the
registration statement filed under the Exchange Act, including any amendment or
report filed for the purpose of updating such information; and
(d) All documents subsequently filed by the registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregistered all securities then remaining unsold, shall be deemed
2
<PAGE>
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents.
Any statement contained herein or in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or amended, to constitute
a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 16-10a-841 of the Utah Revised Business Corporation Act (UTAH
CODE Section 16-10a-901 et seq.) (the "Utah Corporations Law") allows a Utah
corporation to provide in its articles of incorporation or by shareholder
resolution or in its bylaws for the elimination or limitation of personal
liability of a director to the corporation or to its shareholders for monetary
damages for any action or omission, as a director, except (i) liability for and
financial benefit received by a director to which he was not entitled, (ii)
intentional infliction of harm on the corporation or the shareholders, (iii) an
unlawful distribution to shareholders in violation of Utah Corporations Law, and
(iv) intentional violation of criminal law.
Part 9 of the Utah Corporations Law provides for discretionary and
mandatory indemnification of directors in certain circumstances. Section
16-10a-902 empowers a corporation to indemnify a director, against liability if
his conduct was in good faith, he reasonably believed that his conduct was not
opposed to the corporation's best interest and in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful. A
corporation may not indemnify a director under Section 16-10a-902 if the
director was adjudged liable to the corporation for deriving an improper
personal benefit. A director may apply to a court of competent jurisdiction to
compel mandatory indemnification by the corporation and the court may also order
the corporation to pay the director's reasonable expenses incurred to obtain the
court ordered indemnification. All indemnification is limited to reasonable
expenses only.
Section 16-10a-903 requires that, unless limited by the articles of
incorporation, a corporation must indemnify a director who was successful in the
defense of any proceeding, claim, issue
3
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or matter in a proceeding, to which he was a party because he is or was a
director. Such indemnification is limited to reasonable expenses incurred and
limited to the extent of his success in the proceeding or claim.
Under Section 16-10a-904 a corporation may pay for or reimburse the
reasonable expenses incurred by a director in advance of final disposition of
the proceeding if the director furnishes the corporation a written affirmation
of his good faith belief that he has met the applicable standard of conduct,
provides a written undertaking personally binding him to pay the advance if it
is ultimately determined that he did not meet the standard of conduct, and a
determination is made that the facts then known to those making a determination
would not preclude indemnification. The director's undertaking need not be
secured and may be accepted without reference to financial ability to make
repayment.
Section 16-10a-906 prohibits a corporation from making any discretionary
indemnification, payment or reimbursement of expenses in advance of a
determination of a director's liability unless a determination has been made
that the director has met the applicable standard of conduct. Such
determination must be made as follows: (1) by a majority vote of a quorum of
the board of directors who are not parties to the proceeding; (2) if a quorum
cannot be obtained as contemplated by (1), above, by a majority vote of a
committee of two or more members of the board of directors who are not parties
to the proceeding and are designated by the board of directors; (3) by special
legal counsel selected by a quorum of the board of directors or its committee
composed of persons determined in the manner prescribed in (1) or (2), above, or
if a disinterested quorum of the board of directors or committee is not
possible, then selected by a majority vote of the full board of directors, or
(4) by a majority of the shareholders entitled to vote by person or proxy at a
meeting.
Section 16-10a-907 entitles an officer of the corporation to both the
mandatory and discretionary indemnification and discretionary payment or
reimbursement of reasonable expenses on the same basis allowed for directors
under the Utah Corporations Law, unless prohibited by a corporation's articles
of incorporation.
The Restated Articles of Incorporation of the registrant do not have any
provisions regarding the limitation of liability of liability or indemnification
of directors, officers or employees.
Article VIII of the registrant's By-laws empowers the Company to
indemnify present and former directors, officers, employees or agents of the
Company against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with a
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company).
4
<PAGE>
Such indemnification is contingent upon the person acting in good faith
and in a manner he reasonably believe to be in or not opposed to the best
interest of the Company, and for criminal proceedings, the person must have had
no reasonable cause to believe his conduct was unlawful. Indemnification inures
to the benefit of heirs and legal representatives and is extended to persons
who, at the request of the Company, serve as directors, officers, employees or
agents of other entities. No indemnification under the By-laws, without court
approval, is permitted for claims, issues or matters if the person is adjudged
to be liable for negligence or misconduct in performance of his duty to the
Company.
A majority of the Company's Board of Directors may authorize advances of
indemnification funds upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amounts unless it is ultimately determined that
the person is to be indemnified by the Company as authorized by the By-laws.
The By-laws do not preclude indemnification as may be provided by an
agreement, the vote of the Company's shareholders or disinterested directors, or
otherwise. Indemnification under the By-laws is in addition to any
indemnification permitted by law. The Company is empowered to purchase
insurance against liability of its directors, officers, employees or agents.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index.
An opinion of counsel (Exhibit Number 5) is not being filed since the
securities being registered are not original issuance securities.
The registrant has submitted the Nature's Sunshine Products, Inc. Tax
Deferred Retirement Plan (the "Plan") to the Internal Revenue Service ("IRS")and
will submit any amendments thereto to the IRS in a timely manner and will make
all changes required by the IRS in order to qualify the Plan under 401(a) and
401(k) of the Internal Revenue Code of 1986, as amended.
5
<PAGE>
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(b) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs 1.(a) and 1.(b) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
4. That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of any employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
6
<PAGE>
5. To deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the Prospectus, to deliver, or cause to be delivered to each person to
whom the Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such interim
financial information.
6. That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
7
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Provo, State of Utah, on
May 15, 1995.
NATURE'S SUNSHINE PRODUCTS, INC.
(REGISTRANT)
By: /s/ Alan D. Kennedy
-------------------------------------
Alan D. Kennedy, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Alan D. Kennedy President, Director and May 15, 1995
----------------------- Chief Executive Officer
Alan D. Kennedy
/s/ Kristine F. Hughes Chairman of the Board May 15, 1995
----------------------- and Director
Kristine F. Hughes
/s/ Eugene L. Hughes Executive Vice May 15, 1995
----------------------- President and Director
Eugene L. Hughes
/s/ Merrill Gappmayer Director May 15, 1995
-----------------------
Merrill Gappmayer
/s/ Pauline T. Hughes Director May 15, 1995
-----------------------
Pauline T. Hughes
/s/ Douglas Faggioli Chief Financial Officer May 15, 1995
----------------------- (Principal Accounting
Douglas Faggioli Officer)
THE PLAN. Pursuant to the requirements of the Securities Act of
1933, the Trustees of the Nature's Sunshine Products, Inc. Tax Deferred
Retirement Plan have duly caused this Registration Statement to the signed on
its behalf by the undersigned thereunto duly authorized, in the City of Provo,
and the State of Utah, on the 15th day of May, 1995.
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
By: /s/ Douglas Faggioli
-------------------------------
Douglas Faggioli, Plan Administrator
8
<PAGE>
EXHIBIT INDEX
Located at
Sequentially
Exhibit No. Description of Exhibit Numbered Page
----------- ---------------------- -------------
4.1 Nature's Sunshine Products, Inc.
Tax Deferred Retirement Plan
(January 1, 1995 Restatement) __
4.2 Nature's Sunshine Products, Inc.
Tax Deferred Retirement Trust Agreement __
24 Consent of Arthur Andersen LLP __
9
<PAGE>
EXHIBIT 4.1
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
(January 1, 1995 Restatement)
<PAGE>
TABLE OF CONTENTS
ARTICLE PAGE
------- ----
ARTICLE I
NAME AND PURPOSES........................... 1
1.1 Restatement.............................................. 1
1.2 Exclusive Benefit........................................ 1
1.3 No Profits Required...................................... 1
ARTICLE II
DEFINITIONS.............................. 1
2.1 Accounts................................................. 1
2.2 Affiliated Company....................................... 1
2.3 Anniversary Date......................................... 1
2.4 Annual Additions......................................... 1
2.5 Annuity Starting Date.................................... 2
2.6 Applicable Election Period............................... 2
2.7 Beneficiary.............................................. 2
2.8 Board of Directors....................................... 2
2.9 Break in Service......................................... 2
2.10 Code..................................................... 3
2.11 Committee................................................ 3
2.12 Company.................................................. 3
2.13 Company Contributions.................................... 3
2.14 Company Elective Contributions........................... 3
2.15 Company Contributions Account............................ 3
2.16 Compensation............................................. 3
2.17 Computation Period....................................... 5
2.18 Disability............................................... 5
2.19 Earliest Retirement Age.................................. 5
2.20 Effective Date and Restated Effective Date............... 5
2.21 Eligible Employee........................................ 5
2.22 Employee................................................. 6
2.23 Employment Commencement Date............................. 6
2.24 Entry Date............................................... 6
2.25 ERISA.................................................... 6
2.26 Highly Compensated Employee.............................. 6
2.27 Hour of Service.......................................... 8
2.28 Investment Manager....................................... 8
2.29 Leave of Absence......................................... 8
2.30 Matching Contributions................................... 9
2.31 Member................................................... 9
2.32 Member Deposits.......................................... 9
2.33 Non-Highly Compensated Employee.......................... 9
2.34 Normal Retirement Age.................................... 9
2.35 Plan..................................................... 9
2.36 Plan Administrator....................................... 9
2.37 Plan Year................................................ 9
2.38 Prior Plan............................................... 9
2.39 Qualified Joint and Survivor Annuity..................... 9
2.40 Qualified Preretirement Survivor Annuity................. 9
<PAGE>
2.41 Reemployment............................................. 9
2.42 Reemployment Commencement Date........................... 9
2.43 Separation............................................... 10
2.45 Suspense Account......................................... 10
2.46 Tax Deferred Deposits.................................... 10
2.47 Tax Deferred Deposits Account............................ 10
2.48 Trust and Trust Fund..................................... 10
2.49 Trustee.................................................. 10
2.50 Valuation Date........................................... 10
2.51 Year of Service.......................................... 10
ARTICLE III
ELIGIBILITY AND PARTICIPATION..................... 11
3.1 Participation............................................ 11
3.2 Participants in Prior Plan............................... 11
ARTICLE IV
MEMBER DEPOSITS............................ 11
4.1 Election................................................. 11
4.2 Amount Subject to Election............................... 11
4.3 Limitations on Deferrals and Company Contributions....... 12
4.4 Correction of Excess Contributions....................... 15
4.5 Distribution of Excess Deferrals......................... 15
4.6 Termination of, Change in Rate of, or
Resumption of Deferrals.................................. 15
4.7 Character of Deposits.................................... 16
4.8 Rollover Contributions................................... 16
ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS.................. 16
5.1 Trust Fund............................................... 16
5.2 Matching Contributions................................... 16
5.3 Company Elective Contributions........................... 16
5.4 Form and Timing of Company Contributions................. 16
5.5 Investment of Trust Assets............................... 16
5.6 Irrevocability........................................... 17
5.7 Company, Plan Administrator and Trustee Not Responsible for
Adequacy of Trust Fund................................... 17
ARTICLE VI
ACCOUNTS AND ALLOCATIONS........................ 17
6.1 Members' Accounts........................................ 17
6.2 Allocation of Amounts Contributed by Members............. 17
6.3 Allocation of Matching Contributions..................... 18
6.4 Allocation of Company Elective Contributions............. 18
6.5 Revaluation of Members' Accounts......................... 18
6.6 Life Insurance........................................... 20
6.7 Treatment of Accounts Upon Termination of Employment..... 20
6.8 Plan Administrator Authority............................. 20
<PAGE>
ARTICLE VII
VESTING IN PLAN ACCOUNTS........................ 20
7.1 Vesting in Accounts...................................... 20
7.2 Vesting in Company Contributions Account................. 20
7.3 Determination of Years of Service for Vesting............ 20
7.4 Full Vesting Upon Certain Events......................... 21
7.5 Amendment to Vesting Schedule............................ 21
ARTICLE VIII
PAYMENT OF PLAN BENEFITS........................ 22
8.1 Payment of Benefits...................................... 22
8.2 Withdrawals from Tax Deferred Deposits Accounts Upon
Attaining Age 59-1/2..................................... 22
8.3 Withdrawal of Tax Deferred Deposits for Hardship......... 23
8.4 Special Limitation Rules................................. 24
8.5 Valuation of Plan Benefits............................... 26
8.6 Designation of Beneficiary............................... 27
8.7 Lapsed Benefits.......................................... 27
8.8 Persons Under Legal Disability........................... 28
8.9 Additional Documents..................................... 28
8.10 Trustee-to-Trustee Transfers............................. 28
8.11 Direct Distributions..................................... 28
8.12 Forfeitures.............................................. 29
ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN................ 29
9.1 Plan Administration...................................... 29
9.2 Plan Administrator Powers................................ 30
9.3 Investment Manager....................................... 30
9.4 Funding Policy........................................... 31
9.5 Procedure if Committee is Plan Administrator............. 31
9.6 Compensation of Plan Administrator and Plan Expenses..... 31
9.7 Resignation and Removal of Members....................... 32
9.8 Appointment of Successors................................ 32
9.9 Records.................................................. 32
9.10 Reporting and Disclosure................................. 32
9.11 Reliance Upon Documents and Opinions..................... 32
9.12 Reliance on Plan Administrator Memorandum................ 33
9.13 Multiple Fiduciary Capacity.............................. 33
9.14 Limitation on Liability.................................. 33
9.15 Indemnification.......................................... 33
9.16 Bonding.................................................. 34
9.17 Prohibition Against Certain Actions...................... 34
ARTICLE X
MERGER OF COMPANY, MERGER OF PLAN................... 34
10.1 Effect of Reorganization or Transfer of Assets........... 34
10.2 Merger Restriction....................................... 34
<PAGE>
ARTICLE XI
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS.................... 35
11.1 Plan Termination......................................... 35
11.2 Discontinuance of Contributions.......................... 35
11.3 Rights of Members........................................ 35
11.4 Trustee's Duties on Termination.......................... 36
11.5 Partial Termination...................................... 36
ARTICLE XII
APPLICATION FOR BENEFITS........................ 36
12.1 Application for Benefits................................. 36
12.2 Action on Application.................................... 37
12.3 Appeals.................................................. 37
ARTICLE XIII
LIMITATIONS ON CONTRIBUTIONS...................... 38
13.1 General Rule............................................. 38
13.2 Other Defined Contribution Plans......................... 39
13.3 Defined Benefit Plans.................................... 39
13.4 Adjustments for Excess Annual Additions.................. 40
13.5 Affiliated Company....................................... 40
ARTICLE XIV
RESTRICTIONS ON ALIENATION....................... 41
14.1 General Restrictions Against Alienation.................. 41
14.2 Qualified Domestic Relations Orders...................... 41
ARTICLE XV
SPECIAL TOP-HEAVY PLAN RULES...................... 43
15.1 Applicability............................................ 43
15.2 Definitions.............................................. 43
15.3 Top-Heavy Status......................................... 44
15.4 Contributions............................................ 45
15.5 Maximum Annual Addition.................................. 46
15.6 Non-Eligible Employees................................... 46
15.7 Vesting.................................................. 47
ARTICLE XVI
PLAN AMENDMENTS............................ 47
16.1 Amendments............................................... 47
16.2 Retroactive Amendments................................... 47
ARTICLE XVII
MISCELLANEOUS............................. 47
17.1 No Enlargement of Employee Rights........................ 47
17.2 Inspection of Records.................................... 47
17.3 Mailing of Payments and Addresses........................ 48
17.4 Notices and Communications............................... 48
17.5 Governing Law............................................ 48
17.6 Interpretation........................................... 48
17.7 Withholding For Taxes.................................... 48
<PAGE>
17.8 Successors and Assigns................................... 48
17.9 Counterparts............................................. 48
ARTICLE XVIII
MEMBER-DIRECTED ACCOUNTS........................ 49
18.1 Member Directed Individual Account Plan.................. 49
18.2 Availability of Investment Alternatives.................. 49
18.3 Exercise of Control...................................... 49
18.4 Adjustment of Accounts................................... 50
18.5 Limitation of Liability and Responsibility............... 50
18.6 Former Members and Beneficiaries......................... 50
ARTICLE XIX
STOCK FUND............................... 50
19.1 General.................................................. 50
19.2 Accounting............................................... 50
19.3 Company But No Member Direction.......................... 50
19.4 Transfers from Fund effective after January 1, 1995...... 50
<PAGE>
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
ARTICLE I
NAME AND PURPOSES
1.1 RESTATEMENT. The Company restates its Tax Deferred
Retirement Plan in the form of this document. Unless otherwise specifically
noted, it is effective January 1, 1995. This Plan is a profit-sharing plan
under the provisions of Sections 401(k) of the Code to provide an opportunity
for employees to save for retirement. A Member who terminated employment prior
to January 1, 1995 shall have his/her benefits determined under the provisions
of the Prior Plan.
1.2 EXCLUSIVE BENEFIT. The Trust maintained pursuant to this
Plan and its assets shall not be used for, or diverted to, purposes other than
the exclusive benefit of Members or their beneficiaries, as prescribed in Code
Section 401(a).
1.3 NO PROFITS REQUIRED. Contributions may be made to this Plan
without regard to the current or accumulated profits of the Company.
ARTICLE II
DEFINITIONS
2.1 ACCOUNTS. "Accounts" or "Member's Accounts" shall mean the
various Accounts maintained for Members under the Plan, including Tax Deferred
Deposits Accounts, Company Contributions Accounts, and Rollover Contributions
Accounts to the extent those contributions are made to this Plan.
2.2 AFFILIATED COMPANY. "Affiliated Company" shall mean:
(a) Any corporation that is included in a controlled
group of corporations, within the meaning of Section 414(b) of the
Code, that includes the Company;
(b) Any trade or business that is under common control
with the Company within the meaning of Section 414(c) of the Code;
and
(c) Any member of an affiliated service group within the
meaning of Section 414(m) of the Code, that includes the Company.
2.3 ANNIVERSARY DATE. "Anniversary Date" shall mean the last
day of each Plan Year.
2.4 ANNUAL ADDITIONS. "Annual Additions" shall mean, for a
particular Member on behalf of any Plan Year, the sum of:
(a) The amount credited to the Member's Accounts from
Company Contributions and the amount of Deposits made by the Member
for the Plan Year; and
(b) Any amounts allocated to an account established
under a pension or annuity plan to provide benefits described in
Section 401(h) of the Code with respect to the Member after
retirement, if any.
A Member's Rollover contributions shall not be taken into account in determining
the amount of his/her Annual Additions.
<PAGE>
2.5 ANNUITY STARTING DATE. "Annuity Starting Date" means the
first day of the first period for which an amount is paid as an annuity or in
any other form.
2.6 APPLICABLE ELECTION PERIOD. "Applicable Election Period"
means:
(a) In the case of an election to waive the Qualified
Joint and Survivor Annuity, the ninety (90) day period ending on the
Annuity Starting Date, or
(b) In the case of an election to waive the Qualified
Preretirement Survivor Annuity, the period that begins on the first
day of the Plan Year in which the Member attains age thirty-five
(35) and ends on the date of the Member's death. In the case of a
Member who has separated from service, the period with respect to
benefits accrued before the date of the separation shall not begin
later than the date of the separation.
2.7 BENEFICIARY. "Beneficiary" or "Beneficiaries" means the
person or persons last designated by a Member as set forth in Section 8.6 or, if
there is no designated Beneficiary or surviving Beneficiary, the person or
persons designated in Section 8.6 to receive the interest of a deceased Member
in such event.
2.8 BOARD OF DIRECTORS. "Board of Directors" shall mean the
Board of Directors (or its delegate) of Nature's Sunshine Products, Inc. as it
may from time to time be constituted.
2.9 BREAK IN SERVICE. "Break in Service" shall mean:
(a) For purposes of eligibility, a Break in Service
shall mean a Computation Period in which the Employee does not
complete more than one (1) Hour of Service.
(b) For all other purposes under this Plan, a Break in
Service shall mean a Computation Period in which the Employee does
not complete more than five hundred (500) Hours of Service.
(c) The following provisions of this Section 2.9 shall
apply to an Employee described in Paragraph (a) who is absent from
work for any period
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the
Employee,
(iii) By reason of the placement of a child with
the Employee in connection with the adoption of the child by
the Employee, or
(iv) For purposes of caring for the child for a
period beginning immediately following the birth or
placement.
(d) The number of Hours of Service to which an Employee
described in Paragraph (b) shall be credited with shall be --
(i) The number which otherwise would normally have
been credited to the Employee but for the absence, or
(ii) If the number described in Subparagraph (i)
above is not capable of being determined, eight (8) Hours of
Service per day of such absence,
provided that the total number of hours treated as Hours of Service
under this Paragraph (c) shall not exceed five hundred one (501) and
that these Hours of Service shall be taken into
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account solely for purposes of determining whether or not the
Employee has incurred a Break in Service.
(e) The Hours described in Paragraph (b) shall be
credited to the Plan Year --
(i) In which the absence from work begins, if the
Employee would be prevented from incurring a Break in
Service in that Plan Year solely because the period of
absence is treated as Hours of Service under this Section
2.9, or
(ii) In any other case, in the immediately
following Plan Year.
(f) The above provisions of this Section 2.9 shall not
apply to an Employee unless the Employee provides such timely
information as the Plan Administrator may reasonably require to
establish that
(i) The absence is for reasons described in
Paragraph (b), and
(ii) The number of days for which there was such an
absence.
2.10 CODE. "Code" shall mean the Internal Revenue Code of 1986,
as in effect on the date of execution of this Plan and as thereafter amended
from time to time.
2.11 COMMITTEE. "Committee" shall mean a Committee designated as
Plan Administrator.
2.12 COMPANY.
(a) "Company" shall mean Nature's Sunshine Products, Inc.
or any successor thereof, if its successor shall adopt this Plan.
(b) In addition, unless the context indicates otherwise,
as used in this Plan the term "Company" shall also mean and include
any other Affiliated Company (or similar entity) that has been
granted permission by the Board of Directors to participate in this
Plan. This permission shall be granted under such conditions and
upon such conditions as the Board of Directors deems appropriate.
2.13 COMPANY CONTRIBUTIONS. "Company Contributions" shall mean
both Matching Contributions and Company Elective Contributions made by the
Company.
2.14 COMPANY ELECTIVE CONTRIBUTIONS. "Company Elective
Contributions" shall mean contributions pursuant to Section 5.3 of the Plan made
by the Company.
2.15 COMPANY CONTRIBUTIONS ACCOUNT. "Company Contributions
Account" of a Member shall mean his/her account in the Trust Fund in which are
held his/her allocations of Company Elective Contributions, Matching
Contributions and the earnings thereon.
2.16 COMPENSATION.
(a) "Compensation" shall mean the total of all amounts
paid by the Company by reason of services performed by an Employee,
including base salary, shift differential, overtime, bonuses and
wage replacement benefits under Company-sponsored programs for
either occupational or non-occupational disability benefits, except
as provided below, before deductions authorized by the Employee or
required by law to be withheld from the Employees of the Company.
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(b) Notwithstanding the foregoing, an Employee's
Compensation shall be determined without taking into account any of
the following:
(i) Contributions or payments by the Company for
or on account of an Employee under any employee benefit
plan, including but not limited to this Plan and any health
or welfare plans;
(ii) Compensation that is not subject to employer
income tax withholding under Code Section 3402 (or any
successor thereof);
(iii) Income caused by the exercise of stock
options;
(iv) Income attributable to benefits received under
the long term disability plan maintained by the Company; and
(v) Automobile, housing or entertainment
allowance; relocation expenses; payments for unused vacation
time; and other taxable fringe benefits including physical
exams and Christmas gifts or awards.
(c) A Member's Compensation shall include contributions
made on behalf of the Member under a salary reduction agreement to
this Plan and any plan qualifying under section 125, 401(k), 408(k)
or 403(b) of the Code.
(d) A Member's Compensation for purposes of this Plan
shall be the compensation paid to him/her during the relevant Plan
Year. For purposes of contributions and the allocation of
contributions under Articles IV, V and VI for the Plan Year during
which the Member enters the Plan, only compensation earned after
entry into the Plan will be taken into account as Compensation.
(e) In determining the compensation of an Employee, the
rules of Code Section 414(q)(6) shall apply, except that the term
"family" shall include only the spouse of the Employee and any
lineal descendants of the Employee who have not attained age 19
before the close of the Plan Year.
(f) In no instance may the Plan take into account an
Employee's compensation in a Plan Year in excess of the limit set
forth in Code Section 401(a)(17) that is applicable as of January 1
of that Plan Year (which limit at January 1, 1989 is $200,000 and at
January 1, 1994 is $150,000). In determining the Code Section
401(a)(17) limit of an individual who is a member of the family of a
5-percent owner or of a highly compensated employee (within the
meaning of that term in Code Section 414(q)) who is in the group
consisting of the 10 highly compensated employees paid the greatest
compensation during the year, the rules of Code Section 414(q)(6)
shall apply, except that in applying such rules for the purposes of
this section, the term "family" shall include on the spouse of the
employee and any lineal descendants who have not attained the age of
19 years before the close of such year. If the total Compensation
of the affected family members exceeds the Code Section 401(a)(17)
limit for the year, then the Code Section 401(a)(17) limit that
applies to each individual family member shall be determined by
multiplying the Code Section 401(a)(17) limit by the fraction in
which the numerator is the Compensation prior to the application of
the Code Section 410(a)(17) limit of such individual family member
and the denominator is the sum of the Compensation prior to the
application of the Code Section 401(a)(17) limit of all of the
affected family members.
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2.17 COMPUTATION PERIOD.
(a) "Computation Period" shall mean the consecutive
twelve (12) month period used for determining whether the Employee
is to be credited with a Year of Service or a Break in Service. The
Computation Period shall be the Plan Year.
2.18 DISABILITY.
(a) An individual shall be considered to be disabled if
he/she:
(i) is participating in the long-term disability
insurance policy of the Company, if any, and is determined
to be disabled under the terms of that policy by the
insurance company providing that policy; or
(ii) except as hereinafter specifically provided
with relation to an individual who has attained the age of
55 and is blind (as hereinafter defined), is unable to do
any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months. To meet this definition, the individual must have a
severe impairment, which makes him unable to do his previous
work or any other substantial gainful activity which exists
in the national economy. In determining whether an
individual is unable to do any other work, his residual
functional capacity, age, education and work experience are
to be considered. If the individual has attained the age of
55 years and is blind (as hereinafter defined), disability
shall mean the inability to use skills or abilities like the
ones used by the individual in any substantial gainful
activity regularly and for a substantial period of time. As
used in this paragraph, the term, "blind" shall mean a
central visual acuity of 20-200 or less in the better eye
with the use of correcting field of vision so that the
widest diameter of the visual field subtends an angle no
greater than 20 degrees is considered to have a central
visual acuity of 20-200 or less. The blindness must have
lasted or must be expected to last for a continuous period
of at least twelve months.
(b) An individual's status as disabled shall be
established in accordance with general Company policy.
2.19 EARLIEST RETIREMENT AGE. "Earliest Retirement Age" means
the earliest date on which, under the Plan, the Member could elect to receive a
distribution of benefits.
2.20 EFFECTIVE DATE AND RESTATED EFFECTIVE DATE. The original
effective date of this Plan is October 13, 1986. There has been a previous
restatement of this Plan that became effective January 1, 1989. The effective
date of this restatement of the Plan, the Restated Effective Date, is January 1,
1995. The provisions of the Plan as restated shall be effective as of the
Restated Effective Date unless otherwise indicated.
2.21 ELIGIBLE EMPLOYEE. "Eligible Employee" means any common law
employee of the Company who is not represented in employment by a labor
organization unless such organization and the Company has specifically agreed
that the Plan shall be applicable to employees so represented, and who is
regularly employed in the United States by the Company or included on the United
States dollar payroll of the Company; provided that if an Employee becomes
represented in employment by a labor organization and the Company and the labor
organization do not specifically agree that the Plan will be applicable to
employees so represented, the Employee will cease to be an Eligible Employee.
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2.22 EMPLOYEE.
(a) "Employee" shall mean each person currently employed
in any capacity by the Company or Affiliated Company any portion of
whose income is subject to withholding of income tax and/or for whom
Social Security contributions are made by the Company, as well as
any other person qualifying as a common law employee of the Company
or Affiliated Company.
(b) "Employee" shall include any person providing
services to any of the Affiliated Companies pursuant to an agreement
between one or more of the Affiliated Companies and any other person
if those services are of a type historically performed in the
business field of the Affiliated Companies by employees and the
person performing the service has done so for one or more of the
Affiliated Companies on a substantially full-time basis for at least
one year.
(c) Notwithstanding subsection (b), if the Employees
described in subsection (b) represent less than 20 percent of all
Employees who are not Highly Compensated Employees, the term
"Employee" shall not include those Employees described in subsection
(b) who are covered by a Plan described in Section 414(n)(5) of the
Code.
(d) Although Eligible Employees are the only class of
Employees eligible to participate in this Plan, the term "Employee"
is used to refer to persons employed in a non-Eligible Employee
capacity as well as Eligible Employee category. Thus, those
provisions of this Plan that are not limited to Eligible Employees
apply to both Eligible and non-Eligible Employees.
2.23 EMPLOYMENT COMMENCEMENT DATE.
(a) "Employment Commencement Date" shall mean the date
on which an Employee is first credited with an Hour of Service for
the Company or an Affiliated Company.
(b) Unless the Company shall expressly determine
otherwise, and except as is expressly provided otherwise in this
Plan, an Employee shall not, for the purposes of determining his/her
Employment Commencement Date, be deemed to have commenced employment
with an Affiliated Company prior to the effective date on which the
entity became an Affiliated Company.
2.24 ENTRY DATE. "Entry Date" for years prior to 1991 means the
first day of January and the first day of July of each year. "Entry Date" for
years beginning after 1990 means the first day of January, the first day of
April, the first day of July, and the first day of October.
2.25 ERISA. "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
2.26 HIGHLY COMPENSATED EMPLOYEE. The words "Highly Compensated
Employee" means:
(a) Each Employee performing services during the Plan
Year and who
(i) receives during the look-back year annual
compensation from the Company or an Affiliated Company of
more than Seventy-Five Thousand Dollars ($75,000) (as
adjusted under Code Section 415(d); or
(ii) is a person owning (or considered as owning
within the meaning of Code Section 318) at anytime during
the Plan Year or the look-back year more than five
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percent (5%) of the outstanding stock of the Company or an
Affiliated Company or stock possessing more than five
percent (5%) of the total combined voting power of all stock
of the Company or an Affiliated Company; or
(iii) receives during the look back year
compensation in excess of Fifty Thousand Dollars ($50,000)
(as adjusted under Code Section 415(d)) and whose annual
compensation for the look-back year places the Employee
among the top twenty percent (20%) of Employees when
Employees during the look-back year are ranked on the basis
of compensation paid during such Plan Year; or
(iv) was at anytime during the look-back year an
officer of the Company or an Affiliated Company and received
during the look-back year compensation greater than Fifty
Percent (50%) of the dollar limitation in effect under Code
Section 415(b)(1)(a) for the calendar year as of which such
year began (however, no more than fifty (50) Employees, or
if less, the greater of three (3) or 10 percent (10%) of all
Employees shall be treated as officers); provided, however,
if no officer otherwise satisfies this Paragraph (a)(iv)
then the highest paid officer for the preceding Plan Year
shall be treated as satisfying this Paragraph (a)(iv); or
(v) is described in Paragraphs (a)(i), (iii) or
(iv) if the Plan Year is substituted for the look-back year
and whose compensation for the Plan Year places the Employee
among the top 100 Employees for the Plan Year when Employees
are ranked on the basis of compensation for the Plan Year.
(b) Any Employee who (i) separated from the service of
the Company and all Affiliated Companies prior to the Plan Year, and
(ii) who returned to service for the Company or an Affiliated
Company during the Plan Year and (iii) who for the Plan Year
containing the date of separation or any Plan Year ending on or
after the 55th birthday of the Employee would be a Highly
Compensated Employee under the rules of subsection (a) of this
Section.
(c) For purposes of determining the compensation and
plan contributions or benefits of an Employee for a Plan Year or a
preceding Plan Year, the compensation and plan contributions or
benefits for the Plan Year of a family member of an Employee who is
(1) described in subsection (b) as a result of the application of
Paragraph (a)(ii) or described in Paragraph (a)(ii), or (2) one of
the 10 most highly compensated employees ranked on the basis of
compensation paid during the Plan Year shall be considered the
compensation and plan contributions or benefits for the Plan Year of
the Employee. The term family member includes spouse, lineal
ascendants and descendants and spouses of such lineal ascendants and
descendants.
(d) For the first Plan Year, the term "preceding Plan
Year" shall mean the 12 month period immediately preceding the first
Plan Year.
(e) The determination of who is a Highly Compensated
Employee shall be made in accordance with Section 414(q) of the Code
and regulations thereunder.
(f) The determination year is the Plan Year for which
the determination of who is a Highly-Compensated Employee is being
made.
(g) The look-back year is the Plan Year immediately
preceding the determination year, or, in the case of the first Plan
Year, it is the 12 month period immediately preceding the first Plan
Year.
(h) The term "compensation" as used in this Section
shall be the definition of compensation set forth in Section
13.1(d).
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2.27 HOUR OF SERVICE.
(a) "Hour of Service" of an Employee shall mean the
following:
(i) Each hour for which the Employee is paid by
the Company or an Affiliated Company or entitled to payment
for the performance of services as an Employee.
(ii) Each hour in or attributable to a period of
time during which the employee performs no duties
(irrespective of whether he/she has terminated his/her
Employment) due to a vacation, holiday, illness, incapacity
(including pregnancy or disability), layoff, jury duty,
military duty or a Leave of Absence (if the Leave of Absence
is an unpaid medical leave of Absence, the Employee will
accrue hours for the duration of such leave for the first
six months of such leave), for which he/she is so paid or so
entitled to payment, whether direct or indirect. However,
no such hours shall be credited to an Employee if (a) such
Employee is directly or indirectly paid or entitled to
payment for such hours and (b) such payment or entitlement
is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation,
unemployment compensation, or disability insurance laws, or
is a payment which solely reimburses the Employee for
medical or medically-related expenses incurred by him/her.
(iii) Each hour for which he/she is entitled to
back pay, irrespective of mitigation of damages, whether
awarded or agreed to by the Company or an Affiliated
Company, provided that such Employee has not previously been
credited with an Hour of Service with respect to such hour
under Subparagraphs (i) or (ii) above.
Hours of Service under Paragraphs (a)(ii) and (a)(iii) shall be
calculated in accordance with Department of Labor Regulation 29
C.F.R. Section 2530.200b-2(b). All Hours of Service determined
rules of subsection (a) shall be credited to the Computation Period
to which the payment relates, rather than the period in which it is
made.
(b) The Plan Administrator may use equivalencies instead
of keeping records of actual hours worked. The Plan Administrator
may use different equivalencies for different groups of employees,
provided there is a reasonable basis for the distinction and the
different treatment is consistently applied and the treatment does
not violate Code Section 401(a)(4). Permitted equivalencies include
days of employment equivalency (10 hours of service for each day in
which employee earns an hour of service), weeks of employment
equivalency (45 hours of service for every week in which employee
earns an hour of service), semi-monthly equivalency (95 hours of
service for each semi-monthly period in which employee earns an hour
of service), monthly equivalency (190 hours of service for every
month in which employee earns an hour of service) and a
shifts-of-employment equivalency (credited with number of hours in
one shift for each shift in which employee earns an hour of
service).
(c) Unless the Company shall expressly determine
otherwise, and except as may be expressly provided otherwise in this
Plan, an Employee shall not receive credit for his/her Hours of
Service completed with an Affiliated Company prior to the effective
date on which the entity became an Affiliated Company.
2.28 INVESTMENT MANAGER. "Investment Manager" means the one or
more Investment Managers, if any, that are appointed pursuant to Section 9.3.
2.29 LEAVE OF ABSENCE. "Leave of Absence" shall mean any absence
without pay authorized by the Company or an Affiliated Company under its
standard personnel practices. All persons under similar circumstances shall be
treated alike in the granting of such leaves.
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2.30 MATCHING CONTRIBUTIONS. "Matching Contributions" shall mean
contributions pursuant to Section 5.2 of the Plan made by the Company on behalf
of a Member which are solely contingent upon and related to Tax Deferred
Deposits of the Member.
2.31 MEMBER. "Member" shall mean any Eligible Employee who is a
participant in the Plan.
2.32 MEMBER DEPOSITS. "Member Deposits" shall mean all of a
Member's Tax Deferred Deposits to the Plan.
2.33 NON-HIGHLY COMPENSATED EMPLOYEE. "Non-Highly Compensated
Employee" means an Employee who is not a Highly Compensated Employee.
2.34 NORMAL RETIREMENT AGE. "Normal Retirement Age" shall be the
Member's attaining age 59 1/2.
2.35 PLAN. "Plan" shall mean the Nature's Sunshine Products
Deferred Retirement Plan herein set forth, and as it may be amended from time to
time.
2.36 PLAN ADMINISTRATOR. "Plan Administrator" shall mean the
administrator of the Plan, within the meaning of Section 3(16)(a) of ERISA. The
Plan Administrator shall be the person or entity designated as such by the
President of Nature's Sunshine Products, Inc. In the absence of any
designation, the Plan Administrator shall be the President of Nature's Sunshine
Products, Inc.
2.37 PLAN YEAR. "Plan Year" shall mean the fiscal year of the
Plan, which shall be the calendar year.
2.38 PRIOR PLAN. "Prior Plan" shall mean the plan existing
immediately prior to January 1, 1995.
2.39 QUALIFIED JOINT AND SURVIVOR ANNUITY. "Qualified Joint and
Survivor Annuity" means an annuity --
(a) For the life of the Member with a survivor annuity
for the life of the spouse which is fifty percent (50%) of the
amount of the annuity which is payable during the joint lives of the
Member and the spouse, and
(b) Which is the actuarial equivalent of a single life
annuity for the life of the Member.
Such term shall also refer to any annuity in a form having the effect of an
annuity described above.
2.40 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. "Qualified
Preretirement Survivor Annuity" means an annuity for the life of the surviving
spouse the actuarial equivalent of which is not less than fifty percent (50%) of
the balance of the Accounts of the Member as of the date of his/her death.
2.41 REEMPLOYMENT. "Reemployment" or "Reemployed" shall mean an
Employee being credited with over 500 Hours of Service during a Plan Year for
the Company or an Affiliated Company as an Employee following a Separation.
2.42 REEMPLOYMENT COMMENCEMENT DATE. In the case of an Employee
whose employment is terminated and who is subsequently reemployed by the Company
or an Affiliated Company, the term "Reemployment Commencement Date" shall mean
the first day following the termination of his/her employment on which the
Employee is credited with an Hour of Service for the Company or an Affiliated
Company as an Employee.
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2.43 SEPARATION. A "Separation" means termination of employment
of the Member with the Company or, even though continuing as an Employee,
experiencing a Break in Service.
2.44 SERVICE. "Service" shall mean the period of employment with
the Company.
2.45 SUSPENSE ACCOUNT. "Suspense Account" shall mean the Account
established pursuant to any provisions of Section 13.4 to hold any excess Annual
Additions.
2.46 TAX DEFERRED DEPOSITS. "Tax Deferred Deposits" shall mean
those contributions made by a Member which represent pre-tax contributions.
2.47 TAX DEFERRED DEPOSITS ACCOUNT. "Tax Deferred Deposits
Account" of a Member shall mean his/her individual account in the Trust Fund in
which are held his/her Tax Deferred Deposits and the earnings thereon.
2.48 TRUST AND TRUST FUND. "Trust" or "Trust Fund" shall mean
the one or more trusts created for funding purposes under the Plan.
2.49 TRUSTEE. "Trustee" shall mean the individual or entity
acting as a trustee of the Trust Fund.
2.50 VALUATION DATE. "Valuation Date" shall mean the date as of
which the Trustee shall determine the value of the assets in the Trust Fund for
purposes of determining the value of each Account, which shall be December 31 of
each year, and such other dates as may be determined in rules prescribed by the
Plan Administrator.
2.51 YEAR OF SERVICE.
(a) For all purposes under this Plan except eligibility
beginning on or after January 1, 1991, an Employee shall be deemed
to have completed a "Year of Service" if he/she completes one
thousand (1,000) or more Hours of Service during the relevant
Computation Period. Solely for purposes of eligibility beginning
January 1, 1991, an Employee shall be deemed to have completed a
"Year of Service" as of the date following the Employment
Commencement Date or the Reemployment Commencement Date on which
he/she is credited with six months of Service.
(b) An Employee shall be credited with his/her Years of
Service with an Affiliated Company, but only to the extent that such
service would have been credited under the rules set forth in this
Section. Notwithstanding the foregoing, unless the Company shall
provide by resolution of its Board of Directors an Employee shall
not receive credit for his Years of Service with an Affiliated
Company for any period of employment with an Affiliated Company
prior to such entity becoming an Affiliated Company. An Employee
shall receive credit for service with previous employers only to the
extent provided by resolution of the Board of Directors and then
only if the credit for service satisfies the nondiscrimination
standards of Section 401(a)(4) of the Code.
(c) Notwithstanding the foregoing, the Years of Service
for a purpose of any individual who was an Employee on the Restated
Effective Date shall be his/her Years of Service under the Prior
Plan for that purpose as of the Restated Effective Date. Any Years
of Service prior to the Restated Effective Date that were
disregarded for a purpose under the provisions of the Prior Plan
shall be disregarded under this Plan for that same purpose.
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ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 PARTICIPATION.
(a) Each Eligible Employee shall become eligible to
participate upon the first Entry Date coincident with or immediately
following the completion of a Year of Service.
(b) If an Eligible Employee experiences a Separation (i)
after satisfaction of the requirements of Paragraph (a) above but
prior to his/her entering the Plan, or (ii) after the Employee
becomes a Member of the Plan, the Employee shall become eligible to
participate in the Plan immediately upon his/her Reemployment
Commencement Date. Prior Service of an Eligible Employee who
experiences a Separation shall be taken into account upon his/her
Reemployment Commencement Date for purposes of satisfying the
eligibility requirements of this Plan.
(c) If a Member becomes ineligible to participate
because he or she has become a member of an ineligible class of
Employees (but has not incurred a Separation), then upon return to
an eligible class of Employees, the Employee will immediately become
a Member. If an Employee who is not a member of an eligible class
of Employees becomes a member of that class, that Employee will
participate as of the first Entry Date following his or her
completion of the Plan's eligibility requirements.
3.2 PARTICIPANTS IN PRIOR PLAN. Any Employee who was eligible
to participate in the Plan on December 31. 1988, shall automatically be eligible
to participate in the restated Plan on January 1, 1995, provided he/she is an
Eligible Employee on that date.
ARTICLE IV
MEMBER DEPOSITS
4.1 ELECTION.
(a) To the extent permitted by Section 4.2 below, each
Eligible Employee may elect to defer the receipt of a portion of
his/her Compensation and have the deferred amount contributed
directly by the Company to the Plan as Tax Deferred Deposits.
Deposits may be made only by means of payroll withholding or such
other means as the Plan Administrator shall prescribe.
(b) The Plan Administrator shall prescribe such rules
and procedures and provide such forms as are necessary or
appropriate for each Member, and each Eligible Employee who will
become a Member, to make deposits pursuant to this Article IV.
4.2 AMOUNT SUBJECT TO ELECTION.
(a) Members may elect to contribute a percentage of
his/her Compensation for the Plan Year to the Plan as Tax Deferred
Deposits not to exceed ten percent (10%).
(b) Notwithstanding the foregoing, the Tax Deferred
Deposits of a Member for a Plan Year may not exceed $7,000, as
adjusted in order to reflect increases in the cost-of-living as
announced from time to time by the U.S. Treasury Department. This
limitation applies in the aggregate to the "elective contributions"
of the Member under all plans. For this purpose, the term "elective
contributions" includes the Member's Tax Deferred Deposits to this
Plan, the Member's pre-tax contributions to any other qualified cash
or deferred arrangement (as defined
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in Section 401(k) of the Code), any elective employer contributions
to a simplified employee pension plan that are not included in the
Member's gross income due to Code Section 402(h)(1)(b) and any
employer contribution used to purchase an annuity contract under
Code Section 403(b) pursuant to a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(d)).
(c) The Plan Administrator may prescribe such rules as
it deems necessary or appropriate regarding the maximum amount that
a Member may elect to defer and the timing of such an election.
These rules shall apply to all individuals eligible to make an
election described in Section 4.1, except to the extent that the
Plan Administrator prescribes special or more stringent rules
applicable only to Tax Deferred Deposits made by Highly Compensated
Employees and except to the extent of Section 4.3 hereof.
4.3 LIMITATIONS ON DEFERRALS AND COMPANY CONTRIBUTIONS.
(a) The Plan Administrator may in its discretion limit,
revoke or amend an election by a Member under Section 4.2(a) (or, in
the case of Company Contributions, limit the amount to be allocated)
if it determines that such limitation, revocation or amendment is
necessary under one of the following circumstances:
(i) in the case of Tax Deferred Deposits to insure
that the discrimination tests of Section 401(k) of the Code
governing permissible levels of tax-deferred contributions
are met for such Plan Year, or to insure that one of the
following tests is met for such Plan Year:
(1) The Actual Average Percentage of the
Tax Deferred Deposits of the Highly-Compensated
Employees eligible to participate is not more than
1.25 times the Actual Average Percentage of the
Tax-Deferred Deposits for all other Employees
eligible to participate; or
(2) The Actual Average Percentage of the
Tax Deferred Deposits for the Highly-Compensated
Employees eligible to participate is not more than
2.0 times the Actual Average Percentage of the Tax
Deferred Deposits for all other Employees eligible
to participate and the Actual Average Percentage of
the Tax Deferred Deposits for the Highly-Compensated
Employees eligible to participate does not exceed
the Actual Average Percentage of the Tax Deferred
Deposits for all other Employees eligible to
participate by more than two (2) percentage points.
(ii) in the case of Company Contributions to insure
that the discrimination tests of Section 401(m) of the Code
governing permissible levels of contributions are met for
such Plan Year, or to insure that one of the following tests
is met for such Plan Year:
(1) The Actual Average Percentage of the
Company Contributions for the Highly-Compensated
Employees eligible to participate is not more than
1.25 times the Actual Average Percentage of the
Company Contributions for all other Employees
eligible to participate; or
(2) The Actual Average Percentage of the
Company Contributions for the Highly-Compensated
Employees eligible to participate is not more than
2.0 times the Actual Average Percentage of the
Company Contributions for all other Employees
eligible to participate and the Actual Average
Percentage of the Company Contributions for the
Highly-Compensated Employees eligible to participate
does not exceed the Actual
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Average Percentage of the Company Contributions for
all other Employees eligible to participate by more
than two (2) percentage points; or
(iii) to insure that a MEMBER's additions for any
calendar year will not exceed the limitations of Article
XIII; or
(iv) to insure that the Tax Deferred Deposits of a
Member for any calendar year do not exceed the limits of
Code Section 402(g) for the Year in which the deposits are
made as described in Section 4.2(b); or
(v) to insure deductibility of the Employer's
entire contribution to the Plan and any other qualified plan
for federal income tax purposes.
(b) If a limitation or amendment becomes necessary
pursuant to Paragraphs (a)(i) or (ii) above, such limitation or
amendment will be first applied to the Member who is the
Highly-Compensated Employee electing the highest percentage of
Deposits pursuant to Section 4.2(a) or receiving the highest
percentage of Company Contributions, as the case may be, until the
tests of (i) or (ii) are met or until such Member's election
pursuant to Section 4.2(a) or percentage of Company Contributions,
as the case may be, is reduced to the same percentage level as the
Member who is the Highly-Compensated Employee electing the second
highest percentage of deposits pursuant to Section 4.2(a) or
receiving the second highest percentage of Company Contributions,
whichever is applicable. If further limitations are required, then
both such Members' percentage elections (or Company Contributions)
shall be reduced until the tests of (i) or (ii) are met or until the
two Members' elections pursuant to Section 4.2(a) or percentage of
Company Contributions, as the case may be, are reduced to the same
percentage level as the Member who is the Highly-Compensated
Employee electing the third highest percentage of deposits pursuant
to Section 4.2(a) or receiving the third highest percentage of
Company Contributions, whichever is applicable, and such limitations
or amendments shall continue to be made in a similar manner from
Members who are Highly-Compensated Employees making the highest
percentage elections (or receiving the highest percentage of Company
Contributions) to the lowest until the tests of (i) or (ii) are
satisfied.
(c) For purposes of this Section 4.3, the following
meanings shall attach:
(i) The "Actual Average Percentage" for a
specified group of Employees for a Plan Year shall be the
average of the ratios (calculated separately for each
Employee in such group) of the amount of Tax Deferred
Deposits or Company Contributions actually paid over to the
Trust on behalf of each such Employee for each Plan Year to
the Employee's Compensation for such Plan Year.
(ii) The term "Compensation" shall include all
amounts paid by the Employer to the Employee which are
currently includable in the Employee's gross income. The
Employer shall have the right to increase the Employee's
Compensation by the amount of any Employee salary reduction
elections under Code Sections 125 and 401(k), or to use such
alternate definition of Compensation as the Internal Revenue
Service may provide by regulation under Code Section 414(s).
(iii) In determining the contributions and
compensation of a Highly Compensated Employee, the rules of
Code Section 414(q) regarding the treatment of certain
family members shall be taken into account. For purposes of
the rules of Code Section 401(m), a Highly Compensated
Employee who is either a 5 percent owner or one of the ten
most highly compensated employees is subject to the family
aggregation rules of Code Section 414(q)(6). To the extent
and for such purposes as required by the Treasury
Regulations, family member includes spouse, lineal
ascendants and descendants and spouses of lineal ascendants
and descendants.
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(d) For purposes of this Section, the following rules
shall apply:
(i) If a Highly-Compensated Employee is a
participant in two or more cash or deferred arrangements
sponsored by the Company or an Affiliated Company, the
average deferral percentage of the Highly-Compensated
Employee shall be determined by treating all such cash or
deferred arrangements under which the Highly-Compensated
Employee is eligible (other than those that may not be
permissively aggregated) as a single arrangement.
(ii) The contribution percentage for any Member who
is a Highly-Compensated Employee for the Plan Year and who
is eligible to receive an allocation of Company
Contributions (or to have employee contributions within the
meaning of Code Section 401(m)(3)(a), qualified nonelective
contributions within the meaning of Code Section
401(m)(4)(c) or elective deferrals within the meaning of
Code Section 402(g)(3)(a) allocated to his account under
this Plan and one or more other plans described in Code
Sections 401(a) or arrangements described in Code Section
401(k) that are maintained by the Company or an Affiliated
Company) shall be determined as if all such contributions
(and all such matching contributions, qualified nonelective
contributions or elective deferrals) were made under a
single plan.
(iii) If two or more plans which include
arrangements under Code Section 401(k) or (m) are considered
one plan for the purposes of Code Section 401(a)(4) or
410(b), the Code Section 401(k) or (m) arrangements included
in such plans shall be treated as one arrangement.
(iv) If a Highly-Compensated Employee is subject to
the family aggregation rules of Code Section 414(q)(6)
because he/she is either a five percent owner or one of the
ten most highly compensated employees, the combined deferral
percentage for the family group (which is treated as one
Highly-Compensated Employee) must be determined by combining
the Tax Deferred Deposits, compensation and other amounts
treated as elective contributions of all the eligible family
members. Except to the extent taken into account in the
preceding sentence, the Tax Deferred Deposits, compensation
and other amounts treated as elective contributions of all
family members are disregarded in determining the actual
deferral percentage for the groups of Highly-Compensated
Employees and those who are not Highly-Compensated
Employees.
(v) The amount of excess contributions to correct
for a Plan Year pursuant to Section 4.4 shall be reduced by
any excess deferrals previously distributed to a Member
pursuant to Section 4.5 for the taxable year ending with or
within the Plan Year.
(vi) The amount of excess deferrals for a taxable
year of a Member that must be distributed to the Member
pursuant to Section 4.5 shall be reduced by any excess
contributions previously distributed with respect to the
Member for the Plan Year beginning with or within that
taxable year.
(vii) The Company shall maintain records
demonstrating compliance with the testing requirements of
Code Section 401(k) and (m).
(viii) To the extent there is multiple use of the
alternative limitation within the meaning of Section
1.401(m)-2(b) of the Treasury Regulations, the average
deferral percentage of the Highly-Compensated Employees in
the Plan shall be reduced in accordance with Paragraph (b)
above until the combined average deferral percentage
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and average contribution percentage of the Highly-
Compensated Employees does not exceed the aggregate limit.
(ix) The determination and treatment of the
contributions percentage of any Member shall satisfy such
other requirements as may be prescribed by the Secretary of
the Treasury.
4.4 CORRECTION OF EXCESS CONTRIBUTIONS.
(a) If the contributions made on behalf of Members under
Section 4.2(a) or Sections 5.2 and 5.3 causes the Plan to fail the
discrimination tests under Section 4.3, then any contributions of a
Member in excess of the amount permitted to be contributed by the
Member under Section 4.3 or the amount permitted to be contributed
on behalf of the Member under Sections 5.2 and 5.3 ("excess
contributions") and any allocable income shall be returned to the
affected Members no later than 12 months after the close of the Plan
Year in which the excess contributions were made.
(b) The income allocable to the excess contributions of
a Member shall be determined by multiplying the income allocable to
the Tax Deferred Deposits or Company Contributions, as the case may
be, of the Member for the Plan Year by a fraction, the numerator of
which is the excess contributions of the Member contributed for the
preceding Plan Year and the denominator of which is the account
balance in the Member's Tax Deferred Deposits Account or Company
Contributions Account, as the case may be, as of the last day of the
preceding Plan Year.
(c) The excess contribution of a Highly-Compensated
Employee whose contribution percentage is determined under the
family attribution rules shall be allocated among family members in
proportion to the share of the contribution of each family member
that is combined to determine the contribution percentage.
4.5 DISTRIBUTION OF EXCESS DEFERRALS.
(a) The Plan Administrator shall direct the distribution
to a Member of any excess deferrals by the Member for the calendar
year that are claimed by the Member under subsection (b) together
with any income allocable thereto. Such distribution shall be made
no later than April 15 of the year following the calendar year to
which the excess deferral relates. The income allocable to an
excess deferral shall be determined under the same principles
described for determining income allocable to excess contributions
in Section 4.4(b).
(b) The claim of a Member shall be in writing and
submitted to the Plan Administrator by March 1 of the year following
the year in which the excess deferral was made, shall specify the
amount of excess deferrals to this Plan for the preceding calendar
year, and shall include a statement that if the excess deferrals are
not distributed, the excess deferrals, when added to the amounts
deferred under other plans and arrangements described in Code
Sections 401(k), 408(k) or 403(b), exceeds the limit imposed on the
Member by Code Section 402(g) for the year in which the deferral
occurred.
4.6 TERMINATION OF, CHANGE IN RATE OF, OR RESUMPTION OF
DEFERRALS.
(a) The Plan Administrator shall prescribe such rules
and procedures as it deems necessary or appropriate relating to the
submission of requests by Members for the termination, resumption,
or change in the rate of the Member's deposits. These rules and
procedures may require prior written notice to the Plan
Administrator before any such action may be taken with respect to a
Member's deposits.
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(b) The right of a Member to make deposits shall cease
upon termination of employment by the Company. A Member who is on a
Leave of Absence, however, may continue to make deposits during such
period to the extent and under such rules and procedures as shall be
determined by the Plan Administrator.
4.7 CHARACTER OF DEPOSITS. Tax Deferred Deposits shall be
treated as employer contributions for purposes of Code Sections 401(k) and
414(h).
4.8 ROLLOVER CONTRIBUTIONS. Rollover contributions are not
permitted under this Plan.
ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS
5.1 TRUST FUND. The Company has entered into a Trust Agreement
for the establishment of a Trust to hold the assets of the Plan. The Trustee
has agreed to hold and administer all funds and assets that may be deposited
with the Trustee pursuant to the terms of this Plan.
5.2 MATCHING CONTRIBUTIONS. The Company shall contribute a
percentage as determined from time to time by the Company of the Qualified Tax
Deferred Deposits made by each Member for the Plan Year. Qualified Tax Deferred
Deposits are the Tax Deferred Deposits made by a Member for a Plan Year that do
not exceed the percentage as determined from time to time by the Company of the
Compensation of the Member for that Plan Year which percentage, however, shall
not exceed six percent (6%) of the Compensation of the Member for that Plan
Year. The amount the Company is required to contribute under this Section shall
be reduced by any forfeitures for the Plan Year that are not allocated under
Section 6.4(a) to restore accounts of rehired MEMBERS.
5.3 COMPANY ELECTIVE CONTRIBUTIONS. The Company may make
Company Elective Contributions to the Plan in an amount, if any, on behalf of
each Plan Year determined in its discretion. The Company is not required to
make any contribution under this Section in any Plan Year. The amount of this
contribution, if any, shall not exceed the maximum deductible amount determined
under Code Section 404.
5.4 FORM AND TIMING OF COMPANY CONTRIBUTIONS. Company
Contributions to the Trust Fund shall be paid in the form of cash. The Company
Contributions shall be paid by the Company directly to the Trustee annually,
semi-annually, quarterly, semi-monthly, monthly or at such times as the Company
in its sole discretion may determine. The total amount of the Company
Contribution for a Plan Year shall be paid to the Trustee either during the Plan
Year or at any time prior to the date prescribed by law for the filing of the
Company's Federal Income Tax Return (including any extensions thereof) for the
taxable year of the Company ending on the last day of the Plan Year.
5.5 INVESTMENT OF TRUST ASSETS.
(a) The manner in which the assets of the Trust Fund
(including the income earned thereon) shall be invested shall be
determined in accordance with rules prescribed by the Plan
Administrator. The Plan Administrator may prescribe special rules
regarding the investment of Rollover Contributions Accounts or Tax
Deferred Deposits Accounts, which rules may provide that these
Accounts may be invested differently than the other Accounts
established under this Plan.
(b) It is intended that this Plan constitute a
participant directed individual account plan under Section 404(c) of
the ERISA. The Plan Administrator shall administer the Plan in
accordance with the provisions of Article XVIII. The Plan
Administrator may divide the Trust into one or more subfunds but the
Trust shall at all times constitute a single trust. In addition,
each Member's Account may be divided into one or more subaccounts to
reflect the investment of such Account in one or more investment
alternatives maintained under the Trust.
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<PAGE>
(c) The rules prescribed by the Plan Administrator
pursuant to this Section 5.5 shall be consistent with Article XVIII,
with the fiduciary responsibility rules of Part 4 of Subtitle B of
Title I of ERISA and with Section 401(a) of the Code.
5.6 IRREVOCABILITY. The Company shall have no right or title
to, nor interest in, the contributions made to the Trust Fund, and no part of
the Trust Fund shall revert to the Company except that on and after the
Effective Date funds may be returned to the Company as follows:
(a) In the case of a Company Contribution which is made
by a mistake of fact, at the Company's written request that
contribution may be returned to the Company within one (1) year
after it is made.
(b) All company contributions to the Trust are hereby
conditioned upon the Plan satisfying all of the requirements of Code
Section 401(a). If the Internal Revenue Service determines upon an
initial timely application that the Plan does not qualify, at the
Company's written election the Plan may be revoked and all such
contributions may be returned to the Company within one year after
the date of Internal Revenue Service denial of the qualification of
the Plan. Upon such revocation the affairs of the Plan and Trust
shall be terminated and wound up as the Company shall direct.
(c) All Company Contributions to the Plan are
conditioned upon the deductibility of those contributions under Code
Section 404. To the extent a deduction is disallowed, at the
Company's written request the contribution may be returned to the
Company within one year after the disallowance.
(d) In the event that the Plan is terminated when there
are amounts remaining in the Suspense Account, the excess funds may
revert to the Company to the extent provided in Section 13.4(e).
5.7 COMPANY, PLAN ADMINISTRATOR AND TRUSTEE NOT RESPONSIBLE FOR
ADEQUACY OF TRUST FUND.
(a) The Company, Plan Administrator, and the Trustee
shall not be liable or responsible for the adequacy of the Trust
Fund to meet and discharge any or all payments and liabilities
hereunder. All Plan benefits will be paid only from the Trust
assets, and neither the Company, the Plan Administrator nor the
Trustee shall have any duty or liability to furnish the Trust with
any funds securities or other assets except as expressly provided in
the Plan.
(b) Except as required under the Plan or Trust or under
Part 4 of Subtitle B of Title I of ERISA, the Company shall not be
responsible for any decision, act or omission of the Trustee, or the
Plan Administrator, and shall not be responsible for the application
of any moneys, securities, investments or other property paid or
delivered to the Trustee.
ARTICLE VI
ACCOUNTS AND ALLOCATIONS
6.1 MEMBERS' ACCOUNTS. In order to account for the allocated
interest of each Member in the Trust Fund, there shall be established and
maintained for each member a Company Contributions Account, a Tax Deferred
Deposits Account, and for those making such a contribution, a Rollover
Contributions Account.
6.2 ALLOCATION OF AMOUNTS CONTRIBUTED BY MEMBERS. All Tax
Deferred Deposits contributed by a Member shall be allocated to the Tax Deferred
Deposits Account established and maintained for that Member. Such contributions
shall be paid by the Company to the Trustee as soon as practicable, but in no
event later than ninety (90) days after such amounts are withheld from the
Members' paychecks.
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6.3 ALLOCATION OF MATCHING CONTRIBUTIONS. Matching
Contributions related to the Tax Deferred Deposits of a Member shall be
contributed to the Plan and allocated to the Company Contributions Account
established and maintained for that Member. Such contributions shall be paid by
the Company to the Trustee as the Company in its sole discretion shall determine
within the time period for contributions allowed by law. The Matching
Contribution for the benefit of a Member shall be allocated to the Company
Contributions Account of the Member as of the date the contribution is made to
the Plan.
6.4 ALLOCATION OF COMPANY ELECTIVE CONTRIBUTIONS.
(a) Company Elective Contributions and forfeitures for
the Plan Year shall first be used to restore the Company
Contributions Accounts of rehired Members in accordance with the
terms of Section 8.12(b). Any remaining forfeitures for the Plan
Year shall reduce that amount of contribution for that year of the
Company under Section 5.2 (Matching Contributions).
(b) Any remaining Company Elective Contributions for the
Plan Year will be allocated as of the Anniversary Date of the Plan
Year among the Company Contributions Accounts of the Members based
upon the ratio of the amount of each Member's Compensation for the
Plan Year to the total of all Members' Compensation for the Plan
Year (computed in the same manner). Each Member's share of the
Company Elective Contributions shall be allocated to the Company
Contributions Account of the Member.
(c) Notwithstanding the above, a Member shall not be
entitled to share in an allocation under Paragraph (b) above for a
particular Plan Year unless that Member completes at least 1000
Hours of Service during the Plan Year and is employed by the Company
as an Eligible Employee on the last day of that Plan Year. However,
the rule in the preceding sentence shall not apply to a Member whose
employment is terminated (i) after age sixty-five (65), or (ii) by
reason of his/her death or disability.
(d) The allocations of Company contributions under this
Section shall be made after the allocations required by Sections 6.5
and 13.5 have been made.
(e) In no event shall a Member who experiences a
forfeiture as of the end of an Plan Year share in any allocation of
forfeitures for that Plan Year.
6.5 REVALUATION OF MEMBERS' ACCOUNTS. Within sixty (60) days
after each Valuation Date the Trustee shall value the assets of the Trust on the
basis of fair market values. If a Member is directing the investment of funds
in his/her account, such investments shall be valued separately from those
invested by the Trustee so that gains or losses of the investments made at the
direction of a Member are not commingled with the gains and losses from the
assets invested by the Trustee or invested as the direction of any other Member.
In this Section, the reference to the "Trust Fund" shall refer only to the
assets in the Trust being invested by the Trustee without the direction of a
Member.
Upon receipt of these valuations from the Trustee, the Plan Administrator shall
revalue the Accounts of each Member to the extent not being invested at the
direction of the Member as of the Applicable Valuation Date so as to reflect a
proportionate share in any increase or decrease in the fair market value of the
assets in the Trust Fund, determined by the Trustee as of that date as compared
with the value of the assets in the Trust Fund as of the immediately preceding
Valuation Date. The valuation and allocation provisions of this Section shall
be applied and implemented in accordance with the following rules:
(a) All gains, losses, dividends and other property
acquisitions and/or transfers that occur with respect to the Trust
Fund shall be held, charged, credited, debited or otherwise
accounted for on an unallocated basis until allocated to Members'
Accounts entitled to share therein or otherwise used or applied in
accordance with the provisions of this Plan.
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(b) As of each Valuation Date the Plan Administrator
shall revalue the Accounts of each Member in accordance with the
following rules of this subsection (b) so as to reflect to each such
Account not being invested at the direction of a Member a
proportionate share in the net income or loss of the assets since
the immediately preceding Valuation Date.
(i) The share of the net income (or loss) that
will be allocated to each Account maintained on behalf of a
Member is the ratio which the balance of his/her Account on
the preceding Valuation Date (reduced by the amount of any
distributions or withdrawals attributable to his/her Account
and increased by the amount of any contributions allocated
to his/her Account prior to the applicable Valuation Date)
bears to the sum of such balances for all other Members as
of that date.
(ii) The net income (or loss) that is allocable
pursuant to the provisions of this Paragraph (b) shall
include:
(1) The increase (or decrease) in the fair
market value of Trust assets;
(2) All cash income of the Trust, whether in
the form of interest, cash dividends, or otherwise;
and
(3) All expenses attributable to Trust
assets (that have not been paid by the Company)
since the preceding Valuation Date.
(iii) The net income (or loss) that is allocable
pursuant to the provisions of this subsection (b) does not
include current Company Contributions, Tax Deferred
Deposits, or Rollover Contributions.
(c) The Plan Administrator shall prescribe such rules as
it deems necessary or appropriate regarding adjustment to be made in
the way the earnings of the Trust Fund are allocated among the
various Accounts to reflect (i) separate investment alternatives
available to Members, (ii) time of contributions during the Plan
Year, and (iii) changes made by a Member during the Plan Year
regarding the way in which the assets already credited to his
Account(s) are invested.
(d) Under rules which may be prescribed by the Plan
Administrator, Accounts of a Member which become wholly or partially
distributable or withdrawable on other than a Valuation Date shall
be valued currently if such interim valuation (as determined in the
sole discretion of the Plan Administrator) is necessary to account
for a substantial change in the fair market value of the assets in
the Trust (or in one or more of the subfunds) since the last
Valuation Date. The increase or decrease in the amount distributed
to the Member as a result of an interim valuation shall only
increase or decrease the earnings of the Trust which is to be
allocated at the next Valuation Date as of which allocations are
made under this Section.
(e) Under rules developed by the Plan Administrator,
Accounts invested at the direction of the Member shall be valued
separately from the assets in the Trust Fund. The value to each
such account at any time shall be the value of the assets in such
account at that time acquired at the direction of the Member,
reduced by the account's share of general expenses attributable to
Trust assets (that have not been paid by the Company) and any
specific costs or expenses (that have not been paid by the Company)
associated specifically with the account or the assets in the
account acquired at the direction of the Member.
(f) This allocation of net income and losses under this
Section shall be made prior to the allocations required under
Section 13.4.
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6.6 LIFE INSURANCE. The Plan Administrator shall not direct the
purchase of life insurance on the lives of Members.
6.7 TREATMENT OF ACCOUNTS UPON TERMINATION OF EMPLOYMENT. Upon
a Member's termination of employment, pending distribution of the Member's
benefit pursuant to the provisions of Article VIII below, the Member's Accounts
shall continue to be maintained and accounted for in accordance with all
applicable provisions of this Plan, including but not limited to the allocation
of Company Elective Contributions and net income or loss to which the Accounts
are entitled under the applicable provisions of Sections 6.4 and 6.5 as of any
Valuation Date or other date preceding the distribution of the Member's entire
benefit under the Plan.
6.8 PLAN ADMINISTRATOR AUTHORITY.
(a) Allocations of all assets shall be made on the basis
of, and expressed in terms of, dollar value.
(b) The Plan Administrator and the Trustee shall
establish accounting procedures for the purpose of making the
allocations, valuations and adjustments to Members' Accounts
provided for in this Article VI. From time to time the Plan
Administrator and Trustee may modify such accounting procedures for
the purpose of achieving equitable, nondiscriminatory, and
administratively feasible allocations among the Accounts of Members
in accordance with the general concepts of the Plan and the
provisions of this Article VI.
(c) The Company, the Plan Administrator and Trustee do
not in any manner or to any extent whatsoever warrant, guarantee or
represent that the value of a Member's Account shall at any time
equal or exceed the amount previously contributed or credited
thereto.
ARTICLE VII
VESTING IN PLAN ACCOUNTS
7.1 VESTING IN ACCOUNTS. A Member shall be fully vested at all
times in the amounts allocated to his/her Tax-Deferred Deposits Account and
Rollover Contributions Account.
7.2 VESTING IN COMPANY CONTRIBUTIONS ACCOUNT. A Member shall
have a nonforfeitable interest in a percentage of the amounts allocated to
his/her Company Contributions Account in accordance with the following table:
Number of Years Nonforfeitable Percentage
of Service Interest
--------------- --------------------------
less than 4 0
4 or more 100%
7.3 DETERMINATION OF YEARS OF SERVICE FOR VESTING. All Years of
Service of a Member for the Company shall be taken into account subject to the
following:
(a) Any service prior to the Restated Effective Date
that was disregarded under the terms of the Prior Plan.
(b) A Member who experiences a Separation and is later
reemployed will not be credited with any Years of Service earned
prior to the Separation until he/she has completed a Year of Service
after reemployment.
(c) If a Member experiences a Break in Service before
he/she has a vested interest under this Article VII, then in
determining his/her Years of Service under this Section, all Years
of Service earned before the Break in Service shall be forfeited if
the consecutive
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number of Breaks in Service equals or exceeds the greater of five or
the Years of Service earned before the Breaks.
(d) If a Member incurs a Separation which is followed by
five consecutive Breaks in Service and is subsequently reemployed,
no Year of Service after such period of five consecutive Breaks in
Service shall be taken into account in determining the vested
percentage in the Member's Company Contributions Account accrued up
to such period of Breaks in Service.
(e) If a Member incurs a Separation and receives a
distribution from the Plan of his or her entire nonforfeitable
benefits in accordance with the terms of the Plan, Years of Service
shall exclude Years of Service credited prior to the Separation
unless the Member is reemployed as an Employee by the Company before
incurring five (5) consecutive Breaks in Service and repays to the
Plan all money distributed from his/her Company Contributions
Account prior to 60 months after such reemployment.
For purposes of the preceding sentence, a Member who ceases to
participate in the Plan and whose nonforfeitable percentage in
his/her Company Contributions Account is zero, shall be deemed to
have received a complete distribution of the nonforfeitable portion
of his/her Company Contributions Account.
7.4 FULL VESTING UPON CERTAIN EVENTS. Upon the occurrence of
one of the following events, a Member shall be fully vested in his or her
Company Contributions Account notwithstanding any other provisions of the Plan:
(a) Death or Disability of the Member; or
(b) Attainment by the Member of Normal Retirement Age.
7.5 AMENDMENT TO VESTING SCHEDULE. If this restatement amends
the vesting schedule in a manner that affects the computation of the
nonforfeitable interest of a Member in his/her Company Contributions Account, a
Member with at least three Years of Service on the Restated Effective Date may
elect to have his/her nonforfeitable interest computed under the Plan without
regard to the amendment made to the vesting schedule. The period during which
the election may be made shall commence with the date the amendment to the
vesting schedule is adopted and shall end on the last to occur of the following:
(a) 60 days after the amendment to the vesting schedule
is adopted;
(b) 60 days after the amendment to the vesting schedule
becomes effective; or
(c) 60 days after the Member is given written notice of
the amendment to the vesting schedule by the Plan Administrator.
No amendment to the vesting schedule shall reduce the nonforfeitable interest of
a Member in his/her Accounts attributable to contributions made before the
amendment is adopted.
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ARTICLE VIII
PAYMENT OF PLAN BENEFITS
8.1 PAYMENT OF BENEFITS.
(a) Benefits shall become distributable to a Member upon
the Separation of the Member on account of disability, termination
of employment or retirement. Benefits shall become distributable to
the Beneficiary of a Member upon the Separation of the Member on
account of death.
(b) The amount of the benefits distributable to a Member
(or in the case of death benefits to the Beneficiary of the Member)
shall be the amount credited to such Member's Accounts as of the
date of distribution, taking into account any contributions made to
the Member's Accounts during the Plan Year and any withdrawals from
the Member's Accounts during the Plan Year.
(c) Distribution shall be as follows:
(i) If the nonforfeitable balance in the Member's
accounts to be distributed does not exceed $3,500.00,
distribution shall be in the form of a cash lump sum to the
Member or, in the case of death, to his/her Beneficiary.
(ii) If the nonforfeitable balance in the Member's
accounts to be distributed exceeds $3,500.00, distribution
shall be in the form of either (1) a cash lump sum payment,
or (2) monthly installments, as nearly equal as practicable,
over a designated number of months not to exceed the life
expectancy of the Member or the joint life expectancy of the
Member and a designated beneficiary (or, in the case of
death benefits the life expectancy of the Beneficiary).
If a Member (or his/her Beneficiary) shall elect to have
benefits paid in the form of subsection (2) above, such
Member (or his/her Beneficiary) shall have the right to
elect to receive the balance of the account in the form of
subsection (2) at anytime.
Nothing in this Plan shall reduce or eliminate Code Section
411(d)(6) protected benefits determined immediately prior to
January 1, 1995 under the terms of the Prior Plan and the
Plan Administrator shall so administer this Plan.
(d) Distribution of benefits shall commence as soon as
reasonably practicable (taking into account the allocation rules of
Article VI, if applicable) and in no event later than 60 days after
the end of Plan Year in which occurred the event entitling the
Member (or his/her Beneficiary) to benefits. Notwithstanding the
foregoing, if the nonforfeitable balance in the Member's accounts to
be distributed exceeds $3,500.00, distribution shall not be made
before the end of the Plan Year of the Member's death or attainment
of age 62, whichever occurs first, without the written consent of
the Member.
8.2 WITHDRAWALS FROM TAX DEFERRED DEPOSITS ACCOUNTS UPON
ATTAINING AGE 59-1/2.
After attaining age 59-1/2, a Member may elect to withdraw amounts,
in cash, from his/her Tax Deferred Deposits Account. Unless otherwise permitted
by rules adopted by the Plan Administrator, no more than one withdrawal may be
made in any Plan Year under this section.
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8.3 WITHDRAWAL OF TAX DEFERRED DEPOSITS FOR HARDSHIP.
(a) Subject to the approval of the Plan Administrator
and guidelines promulgated by the Plan Administrator, withdrawals
from the Member's Tax Deferred Deposits Account may be permitted to
meet a financial hardship resulting from:
(i) Uninsured medical expenses incurred by the
member, or the Member's spouse or dependent;
(ii) The purchase (excluding mortgage payments) of
a principal residence of the Member;
(iii) The payment of tuition for the next semester
or quarter of post-secondary education for the Member, or
the Member's spouse, children or dependents;
(iv) The prevention of eviction of the Member from
his/her principal residence, or foreclosure on the mortgage
of the Member's principal residence; and
(v) Any other event described in Treasury
Regulations or rulings as an immediate and heavy financial
need and approved by the Company as a reason for permitting
distribution under this Section.
The Plan Administrator shall determine, in a non-discriminatory
manner, whether a Member has a financial hardship. A distribution
may be made under this Section only if such distribution does not
exceed the amount required to meet the immediate financial need
created by the hardship and is not reasonably available from other
resources of the Member.
(b) The withdrawal amount shall not in any event exceed
the value of the Member's Tax Deferred Deposits Account as of date
of the Plan Administrator's acceptance of the Member's written
application for a hardship withdrawal. In addition, except as
provided otherwise in the following sentence, the withdrawal amount
shall not exceed the value of the Member's Deposits to such Account,
less previous withdrawals. Notwithstanding the foregoing, any
distribution under this Section may include earnings accrued to the
Member's Tax Deferred Deposits Account prior to 1989. Payment of
the withdrawal shall be in a single sum no later than the end of the
month following the date on which the withdrawal is approved by the
Plan Administrator unless in its rules the Plan Administrator
selects a different time limit.
(c) If a Member withdraws any amount from his/her Tax
Deferred Deposits Account pursuant to this Section, he/she shall be
unable to elect that any Deposits be made on his behalf under this
Plan or under any other Plan maintained by the Company or an
Affiliated Company until one year after receipt of the withdrawal.
In addition, a Member who withdraws any amount from his/her Tax
Deferred Deposits Account pursuant to this Section shall be unable
to elect any Tax Deferred Deposits under this Plan or under any
other plan maintained by the Company or an Affiliated Company for
the Member's taxable year immediately following the taxable year of
the withdrawal to any extent that such Tax Deferred Deposits would
exceed the applicable limit under Section 402(g) of the Code for
such taxable year, reduced by the amount of such Member's Tax
Deferred Deposits for the taxable year of the withdrawal.
(d) A Member shall not be permitted to make any
withdrawals from his/her Tax Deferred Deposits Account pursuant to
this section until he/she has obtained all distributions, other than
hardship distributions, and all non-taxable loans currently
available under all qualified profit sharing and retirement plans
maintained by the Company.
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8.4 SPECIAL LIMITATION RULES. The purpose of this Section is to
set forth the legal limits on the form and timing of distributions from the
Plan. This Section shall not be construed to provide any additional forms in
which payment of benefits may be made, or to extend the time in which payment is
to commence, that are not specifically provided by other provisions of the Plan.
(a) Unless a Member elects to the contrary pursuant to
rules prescribed by the Plan Administrator, payment of benefits must
commence no later than the 60th day after the close of the Plan Year
in which occurs the latest of the following:
(i) The Member's Normal Retirement Age;
(ii) The tenth anniversary of the date on which the
Member commenced participation in the Plan; or
(iii) The termination of the Member's employment
with the Company or an Affiliated Company.
(b) The interest of each Member shall be distributed to
the Member --
(i) Not later than the Required Beginning Date, or
(ii) Commencing not later than the Required
Beginning Date over a specified period of years not
exceeding:
(1) the life of the Member,
(2) the life of the Member and a
Beneficiary,
(3) a period certain not extending beyond
the life expectancy of the Member, or
(4) a period certain not extending beyond
the joint and last survivor expectancy of the Member
and a Beneficiary.
(c) If the Member's interest is to be distributed in
other than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
(i) Individual account.
(1) If a Member's benefit is to be
distributed over (1) a period not extending beyond
the life expectancy of the Member or the joint life
and last survivor expectancy of the Member and the
Beneficiary, or (2) a period not extending beyond
the life expectancy of the Beneficiary, the amount
required to be distributed for each calendar year,
beginning with distributions for the first
distribution calendar year, must at least equal the
quotient obtained by dividing the Member's benefit
by the applicable life expectancy.
(2) The amount to be distributed each year,
beginning with distributions for the first
distribution calendar year shall not be less than
the quotient obtained by dividing the Member's
benefit by the lesser of (1) the applicable life
expectancy or (2) if the Member's spouse is not the
Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of Section
1.401(a)(9)-2 of the Proposed Regulations.
Distributions after the death of the Member shall be
distributed using the applicable life
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expectancy in Section 8.4(c)(i)(1) above as the
relevant divisor without regard to Proposed
Regulations Section 1.401(a)(9)-2.
(3) The minimum distribution required for
the Member's first distribution calendar year must
be made on or before the Member's Required Beginning
Date. The minimum distribution for other calendar
years, including the minimum distribution for the
distribution calendar year in which the Member's
Required Beginning Date occurs, must be made on or
before December 31 of that distribution calendar
year.
(ii) Other forms. If the Member's benefit is
distributed in the form of an annuity purchased from an
insurance company, distributions thereunder shall be made in
accordance with the requirements of Code Section 401(a)(9)
and the proposed regulations thereunder.
(d) For purposes of Section 8.4(b), "Required Beginning
Date" shall mean, with respect to a Member, April 1 of the calendar
year following the calendar year in which the Member attains age
seventy and one-half (70-1/2).
(e) If distribution has begun and the Member dies before
his/her entire benefit is distributed, the method of distributing
the remaining portion of his/her benefit shall be at least as rapid
as that in effect as of the date of his/her death.
(f) If the Member dies before distribution of his or her
interest begins, distribution of the Member's entire interest shall
be completed by December 31 of the calendar year containing the
fifth anniversary of the Member's death except to the extent that an
election is made to receive distributions in accordance with (i) or
(ii) below:
(i) if any portion of the Member's interest is
payable to a Beneficiary, distributions may be made over a
period certain not greater than the life expectancy of the
Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in
which the Member died;
(ii) if the Beneficiary is the Member's surviving
spouse, the date distributions are required to begin in
accordance with (i) above shall not be earlier than the
later of (1) December 31 of the calendar year immediately
following the calendar year in which the Member died and (2)
December 31 of the calendar year in which the Member would
have attained age 70 1/2.
The Member's Beneficiary must elect the method of
distribution no later than the earlier of (3) December 31 of the
calendar year in which distributions would be required to begin
under this Section, or (4) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the Member.
If the Member has no Beneficiary, or if the Beneficiary does not
elect a method of distribution, distribution of the Member's entire
interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Member's death.
(g) For purposes of Section 8.4(f) above, if the
surviving spouse dies after the Member, but before payments to such
spouse begin, the provisions of Section 8.4(f) with the exception of
paragraph (ii) therein, shall be applied as if the surviving spouse
were the Member. For purposes of this Section 8.4(f), any amount
paid to a child of the Member will be treated as if it had been paid
to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
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(h) All distributions shall be determined and made in
accordance with the Proposed Regulations under section 401(a)(9),
including the minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the Proposed Regulations.
(i) Definitions. The following definitions shall apply
to this Section 8.4.
(i) APPLICABLE LIFE EXPECTANCY. The life
expectancy (or joint and last survivor expectancy)
calculated using the attained age of the participant (or the
Beneficiary) as of the participant's (or Beneficiary's)
birthday in the applicable calendar year reduced by one for
each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being
recalculated, the applicable life expectancy shall be the
life expectancy as so recalculated. The applicable calendar
year shall be the first distribution calendar year, and if
life expectancy is being recalculated such succeeding
calendar year.
(ii) DISTRIBUTION CALENDAR YEAR. A calendar year
for which a minimum distribution is required. For
distributions beginning before the Member's death, the first
distribution calendar year is the calendar year immediately
preceding the calendar year which contains the Member's
Required Beginning Date. For distributions beginning after
the Member's death, the first distribution calendar year is
the calendar year in which distributions are required to
begin pursuant to Section 8.4(f) and (g) above.
(iii) LIFE EXPECTANCY. Life expectancy and joint
and last survivor expectancy are computed by use of the
expected return multiples in Tables V and VI of Regulations
Section 1.72-9.
Unless otherwise elected by the Member (or
spouse, in the case of distributions described in
Section 8.4(f) above) by the time distributions are
required to begin, life expectancies shall be
recalculated annually. Such election shall be
irrevocable as to the Member (or spouse) and shall
apply to all subsequent years. The life expectancy
of a nonspouse Beneficiary may not be recalculated.
(iv) MEMBER'S BENEFIT.
(1) The account balance as of the last
valuation date in the calendar year immediately
preceding the distribution calendar year (valuation
calendar year) increased by the amount of any
contributions or forfeitures allocated to the
account balance as of dates in the valuation
calendar year after the valuation date and decreased
by distributions made in the valuation calendar year
after the valuation date.
(2) Exception for second distribution
calendar year. For purposes of subparagraph (1)
above, if any portion of the minimum distribution
for the first distribution calendar year is made in
the second distribution calendar year on or before
the Required Beginning Date, the amount of the
minimum distribution made in the second distribution
calendar year shall be treated as if it had been
made in the immediately preceding distribution
calendar year.
8.5 VALUATION OF PLAN BENEFITS. The Plan Administrator shall
prescribe such rules as it deems necessary or appropriate regarding the
valuation of a Member's benefit for purposes of this Article VIII. These rules
shall take into account, among other things, contributions to the Account of the
Member since the
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last Valuation Date. Each Account of a Member which becomes wholly or partially
distributable on other than a Valuation Date may in the discretion of the Plan
Administrator be valued currently as set forth in Section 6.4(d).
8.6 DESIGNATION OF BENEFICIARY.
(a) In the event of the death of a Member, the interest
of the Member in the Plan (taking into account all prior
distributions to the Member) shall be paid to the surviving spouse
of the Member if the spouse is still alive, or if not, to the
Beneficiary designated by the Member on the form prescribed by and
delivered to the Plan Administrator. If the surviving spouse is
still alive, payment to another Beneficiary (rather than the spouse)
will be made, however, only if --
(i) The spouse of the Member consented in writing
to the designation of another as the distributee and the
consent acknowledges the effect of the designation and is
witnessed by a Plan Representative or a notary public, or
(ii) It is established to the satisfaction of a
Plan Representative that the consent required under
subparagraph (i) above may not be obtained because there is
no spouse, because the spouse cannot be located, or such
other circumstances as may be prescribed in regulations
under Code Section 417.
For purposes of this Section 8.6(a), "Plan Representative" shall
mean the person or persons designated by the Plan Administrator to
perform the duties specified herein.
(b) Subject to the provisions of this Section, the
Member shall have the right to change or revoke any such designation
by filing a new designation or notice of revocation with the Plan
Administrator, and no notice to any Beneficiary nor consent by any
Beneficiary shall be required to effect any such change or
revocation.
(c) If a deceased Member shall have failed to designate
a Beneficiary, or if the Plan Administrator shall be unable to
locate a designated Beneficiary after reasonable efforts have been
made, or if for any reason the designation shall be legally
ineffective, or if the Beneficiary shall have predeceased the
Member, any distribution required to be made under the provisions of
this Plan shall commence to the Member's surviving spouse (if then
living) or, if not, to the Member's estate. However, if the Plan
Administrator cannot locate a qualified representative of the
deceased Member's estate, or if administration of the estate is not
otherwise required, the Plan Administrator in its discretion may
make the distribution under this subsection to the deceased Member's
heirs at law, determined in accordance with the law of the State of
the Member's domicile in effect as of the date of the Member's
death.
(d) The Plan Administrator shall prescribe such rules
and procedures as it deems appropriate to implement the provisions
of this Section.
8.7 LAPSED BENEFITS.
(a) In the event that a benefit is payable under this
Plan to a Member and after reasonable efforts the Member and his/her
Beneficiary cannot be located for the purpose of paying the benefit
during a period of seven (7) consecutive years, the Member shall be
presumed dead and the benefit shall be allocated as of the end of
the Plan Year to the Company Contributions Accounts of the Members
based upon the relative Compensation of each Member for the Plan
Year.
(b) Notwithstanding the provisions of Section 8.7(a)
above, if the Member or his/her Beneficiary shall, subsequently
present a valid claim to the benefit, the Accounts of the Member
shall be reinstated and the benefit shall be payable to the Member
or Beneficiary.
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8.8 PERSONS UNDER LEGAL DISABILITY.
(a) If any payee under the Plan is a minor or if the
Plan Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any payment
due him/her, the Plan Administrator may have the payment, or any
part thereof, made to the person (or persons or institution) whom it
reasonably believes is caring for or supporting the payee, unless it
has received due notice of claim therefor from a duly appointed
guardian or committee of the payee.
(b) Any such payment shall be a payment from the
Accounts of the payee and shall, to the extent thereof, be a
complete discharge of any liability under the Plan to the payee.
8.9 ADDITIONAL DOCUMENTS.
(a) The Plan Administrator or the Company may require
satisfactory proof of any matter under this Plan from or with
respect to any Employee, Member, or Beneficiary, and no person shall
be entitled to receive any benefits under this Plan until the
required proof shall be furnished.
(b) The Plan Administrator or Trustee, or both, may
require the execution and delivery of such documents, papers and
receipts as the Plan Administrator or Trustee may determine
necessary or appropriate in order to establish the fact of death of
the deceased Member and of the right and identity of any Beneficiary
or other person or persons claiming any benefits under this Article
VIII.
(c) The Plan Administrator or the Trustee, or both, may,
as a condition precedent to the payment of death benefits hereunder,
require an inheritance tax release and/or such security as the Plan
Administrator or Trustee, or both, may deem appropriate as
protection against possible liability for State or Federal death
taxes attributable to any death benefits.
8.10 TRUSTEE-TO-TRUSTEE TRANSFERS. In the case of any Member or
Members who have terminated employment with the Company and all Affiliated
Companies participating in this Plan and subsequently become employed by an
unrelated successor employer or an Affiliated Company not participating in this
Plan, the Plan Administrator, in its discretion, may, at the request of such
Member or Members, direct the Trustee to transfer the Accounts of such Member or
Members directly to the trustee of any retirement plan maintained by such
successor employer or employers in lieu of any distribution described in the
preceding provisions of this Article VIII if (i) the retirement plan maintained
by such successor employer is determined to the satisfaction of the Plan
Administrator to be qualified under Section 401 of the Code, (ii) the sponsor
and trustee of such plan consent to the transfer, and (iii) such transfer
satisfies the conditions of Section 10.2 hereof.
8.11 DIRECT DISTRIBUTIONS. Notwithstanding any provision of the
plan to the contrary that would otherwise limit a distributee's election under
this Section, a distributee may elect, at the time and in the manner prescribed
by the Plan Administrator to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the
distributee in a direct rollover.
For purposes of this Section, the following definitions apply:
(a) Eligible rollover distribution: An eligible
rollover distribution is any distribution of all or any portion of
the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and
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the portion of any distribution that is not includable in gross
income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(b) Eligible retirement plan: An eligible retirement
plan is an individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(c) Distributee: A distributee includes a Member or
former employee. In addition, the Member's or former Member's
surviving spouse and the Member's or former Member's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
(d) Direct rollover: A direct rollover is a payment by
the plan to the eligible retirement plan specified by the
distributee.
8.12 FORFEITURES.
(a) A Member who experiences a Separation shall forfeit
the non-vested portion of his or her Company Contributions Account
as of the last day of the Plan Year in which he or she experiences a
Separation. Such forfeiture shall be allocated in accordance with
the provisions of Section 6.4.
(b) In the event a Member who experiences a Separation
is reemployed before incurring five (5) consecutive Breaks in
Service, the amount of any forfeiture experienced by the Member
shall be restored to the Company Contributions Account of the
Member.
(c) The provisions of this Plan (including (a) and (b)
of this Section and Section 6.4(a)) providing for the forfeiture and
allocation of the non-vested portion of the Company Contributions
Account at the end of the Plan Year in which the Member experiences
a Separation shall become effective January 1, 1994. The provisions
of the Plan as it existed prior to this restatement which provided
for forfeitures to occur and be allocated after the Member
experiences a period of five (5) consecutive Breaks in Service shall
apply to the periods prior to January 1, 1994. The non-vested
Company Contributions Account of any Member who experienced a
Separation before 1994 that is still being held shall be forfeited
and allocated in accordance with the terms of this Plan as of
December 31, 1994.
ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN
9.1 PLAN ADMINISTRATION.
(a) Authority to control and manage the operation and
administration of the Plan shall be vested in the Plan
Administrator.
(b) For purposes of ERISA Section 402(a), the Plan
Administrator shall be the Named Fiduciaries of this Plan. If a
Committee is designated as Plan Administrator, each member of the
Committee shall be a Named Fiduciary of this Plan.
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(c) The Plan Administrator shall cause to be attached to
the copy of the Plan maintained in the office of the Plan
Administrator an accurate schedule listing the names of all persons
from time to time serving as the Named Fiduciaries of the Plan for
the purpose of inspection.
9.2 PLAN ADMINISTRATOR POWERS. The Plan Administrator shall
have all powers necessary to supervise the administration of the Plan and
control its operations. In addition to any powers and authority conferred on
the Plan Administrator elsewhere in the Plan or by law, the Plan Administrator
shall have, by way of illustration but not by way of limitation, the following
powers and authority:
(a) To allocate fiduciary responsibilities (other than
"Trustee Responsibilities") among the Named Fiduciaries and to
designate one or more other persons to carry out fiduciary
responsibilities (other than Trustee Responsibilities). However, no
allocation or delegation under this Section 9.2(a) shall be
effective until the person or persons to whom the responsibilities
have been allocated or delegated agree to assume the
responsibilities. The term "Trustee Responsibilities" shall have
the meaning set forth in Section 405(c) of ERISA.
(b) To designate agents to carry out responsibilities
relating to the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical,
accounting, clerical, and other assistance as it may deem
appropriate in carrying out of the provisions of this Plan,
including one or more persons to render advice with regard to any
responsibility any Named Fiduciary or any other fiduciary may have
under the Plan.
(d) To establish rules and procedures from time to time
for the conduct of the Plan Administrator's business and the
administration and effectuation of this Plan.
(e) To administer, interpret, construe and apply this
Plan. To decide all questions which may arise or which may be raised
under this Plan by any Employee, Member, former Member, Beneficiary
or other person whatsoever, including but not limited to all
questions relating to eligibility to participate in the Plan, the
amount of service of any Member, and the amount and payment of
benefits to which any Member or his/her Beneficiary may be entitled.
(f) To determine the manner in which the assets of this
Plan, or any part thereof, shall be disbursed.
(g) To direct the Trustee, in writing, from time to
time, to invest and reinvest the Trust Fund, or any part thereof, or
to purchase, exchange, or lease any property, real or personal,
which the Plan Administrator may designate. This shall include the
right to direct the investment of all or any part of the Trust in
any one security or any one type of securities permitted hereunder.
(h) To perform or cause to be performed such further
acts as it may deem to be necessary, appropriate or convenient in
the efficient administration of the Plan.
Any action taken in good faith by the Plan Administrator in the exercise of
authority conferred upon it by this Plan shall be conclusive and binding upon
the Members and their Beneficiaries. All discretionary powers conferred upon
the Plan Administrator shall be absolute. However, all discretionary powers
shall be exercised in a uniform and nondiscriminatory manner.
9.3 INVESTMENT MANAGER.
(a) Notwithstanding anything in this Article IX to the
contrary, the Plan Administrator, by action reflected in the minutes
thereof, may appoint one or more Investment
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Managers, as defined in Section 3(38) of ERISA, to manage all or a
portion of the assets of the Plan.
(b) An Investment Manager shall discharge its duties in
accordance with applicable law and in particular in accordance with
Section 404(a)(1) of ERISA.
(c) An Investment Manager, when appointed, shall have full
power to manage the assets of the Plan for which it has
responsibility, and neither the Company nor the Plan Administrator
shall thereafter have any responsibility for the management of those
assets, except as otherwise provided by law.
9.4 FUNDING POLICY.
(a) At periodic intervals, not less frequently than
annually, the Plan Administrator shall confer with the Trustee
regarding the long-run and short-run financial needs of the Plan.
9.5 PROCEDURE IF COMMITTEE IS PLAN ADMINISTRATOR. If a
Committee is appointed to serve as Plan Administrator, the following procedures
shall apply:
(a) A majority of the members of the Committee as
constituted at any time shall constitute a quorum, and any action by
a majority of the members present at any meeting, or authorized by a
majority of the members in writing without a meeting, shall
constitute the action of the Committee.
(b) The Committee may designate one or more of its
members ("Designated Members") as authorized to execute any document
or documents on behalf of the Committee, in which event the
Committee shall notify the Trustee of this action and the name or
names of the Designated Members.
(c) The Trustee, Company, Members, Beneficiaries, and
any other party dealing with the Committee may accept and rely upon
any document executed by the designated Members as representing
action by the Committee until the Committee shall file with the
Trustee a written revocation of the authorization of the Designated
Members.
9.6 COMPENSATION OF PLAN ADMINISTRATOR AND PLAN EXPENSES.
(a) The Plan Administrator, including members of a
Committee serving as Plan Administrator, shall serve without
compensation unless the Company shall otherwise determine. However,
in no event shall any Plan Administrator (including any member of a
Committee serving as Plan Administrator) who receives full-time pay
from the Company receive compensation from the Plan for his/her
services as the Plan Administrator.
(b) The Plan Administrator (including all members of a
Committee serving as Plan Administrator) shall be reimbursed for any
necessary or appropriate expenditures incurred in the discharge of
duties as the Plan Administrator.
(c) The compensation or fees, as the case may be, of all
officers, agents, counsel, the Trustee, or other persons retained or
employed by the Plan Administrator shall be fixed by the Plan
Administrator, subject to approval by the Company.
(d) The expenses incurred in the establishment and
administration of the Plan, including but not limited to the
expenses incurred by the Plan Administrator (including members of
the Committee if serving as Plan Administrator) in exercising their
duties, shall be paid out of the Trust assets, to the extent they
are not paid by the Company.
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(e) Notwithstanding the provisions of Section 9.6(d)
above, to the extent provided by rules prescribed by the Plan
Administrator, the cost of interest, transfer taxes, and normal
brokerage charges which are included in the cost of securities (or
other forms of investments) purchased by the Trust Fund (or charged
to proceeds in the case of sales) shall be charged and allocated in
a fair and equitable manner to the Accounts of the Members to which
the securities (or other forms of Investments) are allocated.
9.7 RESIGNATION AND REMOVAL OF MEMBERS. The President of Nature
Sunshine Products, Inc. may remove any Plan Administrator. The following apply
if a Committee is serving as Plan Administrator:
(a) Any member of the Committee may resign at any time
by giving written notice to the Chairman or Secretary of the
Committee, effective as therein stated.
(b) Any member of the Committee may, at any time, be
removed by the President of Nature Sunshine Products, Inc.
(c) In the case of a Committee member who is also an
Employee of the Company, his/her status as a Committee member shall
terminate as of the effective date of the termination of his/her
employment, except as otherwise provided by the Company.
9.8 APPOINTMENT OF SUCCESSORS.
(a) Upon the death, resignation, or removal of any Plan
Administrator (including any member of a Committee serving as Plan
Administrator), the President of Nature Sunshine Products, Inc. may
appoint a successor.
(b) Notice of appointment of a successor shall be given
by the Plan Administrator in writing to the Trustee.
(c) Upon termination, for any reason, of a Plan
Administrator (including a member of a Committee serving as Plan
Administrator), the Plan Administrator's (or the member's) status as
a Named Fiduciary shall concurrently be terminated, and upon the
appointment of a successor Plan Administrator (or member) the
successor shall assume the status of a Named Fiduciary as provided
in Section 9.1.
9.9 RECORDS. The Plan Administrator shall keep a record of all
its proceedings and shall keep, or cause to be kept, all such books, accounts,
records or other data as may be necessary or advisable in its judgment for the
administration of the Plan and to properly reflect the affairs thereof, and to
satisfy the requirements of ERISA Section 107.
9.10 REPORTING AND DISCLOSURE. The Plan Administrator shall be
responsible for the reporting and disclosure of information required to be
reported or disclosed pursuant to ERISA or any other applicable law.
9.11 RELIANCE UPON DOCUMENTS AND OPINIONS.
(a) The Plan Administrator (including the members of a
Committee serving as Plan Administrator), the Board of Directors,
the Company and any person delegated under the provisions hereof to
carry out any fiduciary responsibilities under the Plan ("Delegated
Fiduciary"), shall be entitled to rely upon any tables, valuations,
computations, estimates, certificates and reports furnished by any
consultant, or firm or corporation which employs one or more
consultants, upon any opinions furnished by legal counsel, and upon
any reports furnished by the Trustee.
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(b) The Plan Administrator (including the members of a
Committee serving as Plan Administrator), the Board of Directors,
the Company and any Delegated Fiduciary shall be fully protected and
shall not be liable in any manner whatsoever for anything done or
action taken or suffered in reliance upon any such consultant or
firm or corporation which employs one or more consultants, Trustee,
or counsel, except as otherwise provided by law.
(c) Any and all such things done or actions taken or
suffered by the Plan Administrator, the Board of Directors, the
Company, and any Delegated Fiduciary shall be conclusive and binding
on all Employees, Members, Beneficiaries, and any other persons
whomsoever, except as otherwise provided by law.
(d) The Plan Administrator and any Delegated Fiduciary
may, but are not required to, rely upon all records of the Company
with respect to any matter or thing whatsoever, and may likewise
treat those records as conclusive with respect to all Employees,
Members, Beneficiaries, and any other persons whomsoever, except as
otherwise provided by law.
9.12 RELIANCE ON PLAN ADMINISTRATOR MEMORANDUM. Any person
dealing with the Plan Administrator may rely on and shall be fully protected in
relying on a certificate or memorandum in writing signed by the Plan
Administrator (including a certificate signed by the Chairman of a Committee
serving as Plan Administrator as authorized by the majority of the members of
the Committee) as constituted as of the date of the certificate or memorandum,
as evidence of any action taken or resolution adopted by the Plan Administrator.
9.13 MULTIPLE FIDUCIARY CAPACITY. Any person or group of persons
may serve in more than one fiduciary capacity with respect to the Plan.
9.14 LIMITATION ON LIABILITY.
(a) Except as provided in Part 4 of Subtitle B of Title
I of ERISA, no person shall be subject to any liability with respect
to his/her duties under the Plan unless he/she acts fraudulently or
in bad faith.
(b) No person shall be liable for any breach of
fiduciary responsibility resulting from the act or omission of any
other fiduciary or any person to whom fiduciary responsibilities
have been allocated or delegated, except as provided in Part 4 of
Subtitle B of Title I of ERISA.
(c) No action or responsibility shall be deemed to be a
fiduciary action or responsibility except to the extent required by
ERISA.
9.15 INDEMNIFICATION.
(a) To the extent permitted by law, the Company shall
indemnify each member of the Board of Directors and the Plan
Administrator (including the members of a Committee serving as Plan
Administrator), and any other Employee of the Company with duties
under the Plan, against expenses (including any amount paid in
settlement) reasonably incurred by him/her in connection with any
claims against him/her by reason of his/her conduct in the
performance of his/her duties under the Plan, except in relation to
matters as to which he/she acted fraudulently or in bad faith in the
performance of such duties.
(b) The preceding right of indemnification shall be in
addition to any other right to which the Board or Plan Administrator
or other person may be entitled as a matter of law or otherwise, and
shall pass to the estate of a deceased person.
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(c) For purposes of satisfying its indemnity obligations
under this Section, the Company may (but need not) purchase and pay
premiums for one or more policies of insurance. However, this
insurance shall not release the Company of its liability under this
section.
9.16 BONDING. The Plan Administrator (including all members of a
Committee serving as Plan Administrator) and all other Employees having
responsibilities under the Plan shall be bonded to the extent required by
Section 412 of ERISA or any other applicable law.
9.17 PROHIBITION AGAINST CERTAIN ACTIONS.
(a) In administering this Plan, the Plan Administrator
shall not discriminate in favor of any class of Employees and
particularly it shall not discriminate in favor of highly
compensated Employees, or Employees who are officers or shareholders
of the Company.
(b) Also, the Plan Administrator shall not cause the
Plan to engage in any transaction that constitutes a nonexempt
Prohibited Transaction under Section 4975(c) of the Code or Section
406(a) of ERISA.
(c) The Plan Administrator shall not be required to
engage in any transaction which it determines in its sole
discretion, might tend to subject itself, its members, the Plan, the
Company, or any Member to liability under federal or state
securities law.
(d) No Plan Administrator (including a member of a
Committee serving as Plan Administrator) who is also a Member or
former Member of this Plan shall vote or decide any matter relating
solely to that person's rights under this Plan.
ARTICLE X
MERGER OF COMPANY, MERGER OF PLAN
10.1 EFFECT OF REORGANIZATION OR TRANSFER OF ASSETS.
(a) In the event of a consolidation, merger, sale,
liquidation, or other transfer of the operating assets of the
Company to any other company, the ultimate successor or successors
to the business of the Company shall automatically be deemed to have
elected to continue this Plan in full force and effect, in the same
manner as if the Plan had been adopted by resolution of its board of
directors, unless the successor(s), by resolution of its board of
directors, shall elect not to so continue this Plan in effect, in
which case the Plan shall automatically be deemed terminated as of
the applicable effective date set forth in the board resolution.
(b) Upon the sale, to an entity that is not an
Affiliated Company, of a subsidiary that is an Affiliated Company,
the Plan Administrator shall direct the Trustee to make a
distribution of an affected Member's distributable benefit in the
Trust Fund as if such Member's employment terminated.
10.2 MERGER RESTRICTION. Notwithstanding any other provision in
this document, this Plan shall not in whole or in part merge or consolidate
with, or transfer its assets and/or liabilities to any other plan unless each
affected Member in this Plan would receive a benefit immediately after the
merger, consolidation, or transfer (if the Plan then terminated) which is equal
to or greater than the benefit he/she would have been entitled to receive
immediately before the merger, consolidation, or transfer (if the Plan had then
terminated). Provided the requirements set forth in the preceding sentence are
satisfied, the Plan Administrator may direct that the Plan may merge,
consolidate with, or transfer all or any portion of its assets and/or
liabilities to another tax-qualified employee pension benefit plan. Any such
transaction shall be effected in accordance with any and all applicable law.
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ARTICLE XI
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS
11.1 PLAN TERMINATION.
(a) The Company may terminate the Plan and the Trust
Agreement at any time by an instrument in writing executed in the
name of the Company by an officer or officers duly authorized to
execute such an instrument, and delivered to the Trustee.
(b) Upon and after the effective date of the
termination, the Company shall not make any further contributions
under the Plan and no contributions need be made by the Company
applicable to the Plan Year in which the termination occurs, except
as may otherwise be required by law.
(c) The rights of all affected Members to benefits
accrued to the date of termination of the Plan, to the extent funded
as of the date of termination, shall automatically become fully
vested as of that date.
11.2 DISCONTINUANCE OF CONTRIBUTIONS.
(a) In the event the Company decides it is impossible or
inadvisable for business reasons to continue to make Company
Contributions under the Plan, the Company by resolution of its Board
of Directors may discontinue contributions to the Plan. Upon and
after the effective date of this discontinuance, the Company shall
not make any further Company Contributions under the Plan and no
Company Contributions need be made by the Company with respect to
the Plan Year in which the discontinuance occurs, except as may
otherwise be required by law.
(b) The discontinuance of Company Contributions on the
part of the Company shall not terminate the Plan as to the funds and
assets then held by the Trustee, or operate to accelerate any
payments of distributions to or for the benefit of Members or
Beneficiaries, and the Trustee shall continue to administer the
Trust Fund in accordance with the provisions of the Plan until all
of the obligations under the Plan shall have been discharged and
satisfied.
(c) However, if this discontinuance of Company
Contributions shall cause the Plan to lose its status as a
tax-qualified plan under Code Section 401(a), the Plan shall be
terminated in accordance with the provisions of this Article XI.
(d) On and after the effective date of a complete
discontinuance of Company Contributions, the rights of all affected
Members to the balance in their Accounts as of that date, shall
automatically become fully vested.
(e) The failure of the Company to contribute to the
Trust in any year, if contributions are not required under the Plan
for that year, shall not constitute a complete discontinuance of
contributions to the Plan.
11.3 RIGHTS OF MEMBERS. Upon the termination of the Plan, for
any cause whatsoever, all assets of the Plan, after payment of expenses, shall
be used for the exclusive benefit of Members and their Beneficiaries and no part
thereof shall be returned to the Company, except as provided in the Section 5.6
of this Plan.
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11.4 TRUSTEE'S DUTIES ON TERMINATION.
(a) On or before the effective date of termination of
this Plan, the Trustee shall proceed as soon as possible, but in any
event within six (6) months from the effective date, to reduce all
of the assets of the Trust Fund to cash or other property.
(b) After first deducting the estimated expenses for
liquidation and distribution chargeable to the Trust Fund, and after
setting aside a reasonable reserve for expenses and liabilities
(absolute or contingent) of the Trust, the Plan Administrator shall
make the allocations required under Article VI, where applicable,
with the same effect as though the date of completion of liquidation
were a Valuation Date of the Plan.
(c) Following these allocations, the Trustee shall
promptly, after receipt of appropriate instructions from the Plan
Administrator, distribute in accordance with Article VIII to each
former Member a benefit equal to the amount credited to his/her
Accounts as of the date of completion of the liquidation. Benefits
of each Member shall be paid in cash; provided, however, payment may
be made in property if the Trustee and Member agree. Notwithstanding
the foregoing, if the value of all of a Member's Accounts exceeds
$3,500, no distribution will be made without his/her written consent
before he/she attains Normal Retirement Age or dies if the Company
is maintaining any other qualified plan, other than an employee
stock ownership plan.
(d) The Trustee and the Plan Administrator shall
continue to function as such for such period of time as may be
necessary for the winding up of this Plan and for the making of
distributions in accordance with the provisions of this Plan.
11.5 PARTIAL TERMINATION.
(a) In the event of a partial termination of the Plan
within the meaning of Code Section 411(d)(3), the interests of
affected Members in the Trust Fund, as of the date of the partial
termination, shall become fully vested as of that date.
(b) That portion of the assets of the Plan affected by
the partial termination shall be used exclusively for the benefit of
the affected Members and their Beneficiaries, and no part thereof
shall otherwise be applied, except as provided in Section 5.5.
(c) With respect to Plan assets and Members affected by
a partial termination, the Plan Administrator and the Trustee shall
follow the same procedures and take the same actions prescribed in
this Article XI in the case of a total termination of the Plan.
ARTICLE XII
APPLICATION FOR BENEFITS
12.1 APPLICATION FOR BENEFITS.
(a) The Plan Administrator may require any person
claiming benefits under the Plan to submit an application therefor,
together with such other documents and information as the Plan
Administrator may require.
(b) In the case of any person suffering from a
disability which prevents such claimant from making personal
application for benefits, the Plan Administrator may, in its
discretion, permit application to be made by another person acting
on his/her behalf.
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12.2 ACTION ON APPLICATION.
(a) Within ninety (90) days following receipt of an
application and all necessary documents and information, the Plan
Administrator's authorized delegate reviewing such claim shall
furnish the claimant with written notice of the decision rendered
with respect to such application.
(b) If no written notice if furnished the claimant
within ninety (90) days of receipt of the application, the
application shall be deemed denied.
(c) In the case of a denial of the claimant's
application, such written notice shall set forth:
(i) The specific reasons for the denial;
(ii) References to the Plan provision upon which
the denial is based;
(iii) A description of any additional information or
material necessary for perfection of the application
(together with an explanation why such material or
information is necessary); and
(iv) An explanation of the Plan's claim review
procedure.
(d) A claimant who wishes to contest the denial of
his/her application for benefits or to contest the amount of
benefits payable shall follow the administrative procedures for an
appeal of benefits as set forth in Section 12.3 below, and shall
exhaust such administrative procedures prior to seeking any other
form of relief.
12.3 APPEALS.
(a) In order to appeal the decision rendered with
respect to his/her application for benefits or with respect to the
amount of his/her benefits, the claimant must follow the appeal
procedures set forth in this Section 12.3.
(b) The appeal must be made, in writing, within sixty
(60) days after the date of notice of the decision with respect to
the application, or if the application has neither been approved nor
denied within the applicable period provided in Section 12.2 above,
then the appeal must be made within sixty (60) days after the
expiration of such period.
(c) The claimant may request that his/her application be
given full and fair review by the Plan Administrator. The claimant
may review all pertinent documents and submit issues and comments in
writing in connection with the appeal.
(d) The decision of the Plan Administrator shall be made
promptly, and not later than ninety (90) days after the Plan
Administrator's receipt of a request for review.
(e) The decision on review shall be in writing and shall
include specific reasons for the decision, written in a manner
calculated to be understood by the claimant with specific reference
to the pertinent Plan provisions upon which the decision is based.
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ARTICLE XIII
LIMITATIONS ON CONTRIBUTIONS
13.1 GENERAL RULE.
(a) Notwithstanding anything to the contrary contained
in this Plan, the total Annual Additions under this Plan to a
Member's Accounts for any Plan Year shall not exceed the lesser of:
(i) Thirty Thousand Dollars ($30,000) (or such
greater amount as may be permitted pursuant to regulations
issued under Section 415(d)(1) of the Code); or
(ii) Twenty-five percent (25%) of the Member's
total compensation (determined in accordance with Section
13.1(d) below) from the Company and any Affiliated Companies
for the year.
(b) For purposes of this Article XIII, the Compensation
of a Disabled Member shall be the Compensation the Member would have
received for the year if the Member was paid at the rate of
Compensation paid immediately before becoming disabled.
(c) For purposes of this Article XIII, the Company has
elected a "Limitation Year" corresponding to the Plan Year.
(d) For purposes of this Article XIII, "Compensation"
shall mean a Member's earned income, wages, salaries, fees for
professional service and other amounts received for personal
services actually rendered in the course of employment with the
Company (including, but not limited to, commissions, compensation
for services on the basis of a percentage of profits, commissions on
insurance premiums, tips, and bonuses), and excluding the following:
(i) Company contributions to a plan of deferred
compensation to the extent contributions are not included in
gross income of the Employee for the taxable year in which
contributed, or on behalf of an Employee to a simplified
employee pension plan to the extent such contributions are
deductible under Code Section 219(b)(7), and any
distributions from a plan of deferred compensation whether
or not includable in the gross income of the Employee when
distributed;
(ii) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by an Employee becomes freely transferable or
is no longer subject to a substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and
(iv) Other amounts which receive special tax
benefits or contributions made by the Company (whether or
not under a salary reduction agreement) towards the purchase
of an annuity contract as defined under Code Section 403(b)
(whether or not the contributions are excludable from the
gross income of the Employee).
Compensation for any limitation year is the compensation actually
paid or includable in gross income during such year. In the case of a Member
who is permanently and totally disabled as defined in Code Section 22(e)(3) and
who is not an officer, owner, or highly compensated, Compensation means the
Compensation the Member would have received for the year if he/she was paid at
the rate of Compensation paid to him/her immediately before the Member became
totally disabled.
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13.2 OTHER DEFINED CONTRIBUTION PLANS. If the Company or an
Affiliated Company is contributing to any other defined contribution plan (as
defined in Section 414(i) of the Code) for its Employees, some or all of whom
may be Members in this Plan, then each Member's Annual Additions in the other
plan shall be aggregated with the Member's Annual Additions under this Plan for
the purposes of applying the limitations of Section 13.1.
13.3 DEFINED BENEFIT PLANS. If a Member of this Plan is also a
member of a defined benefit plan (as defined in Section 414(j) of the Code) to
which contributions are made by the Company or an Affiliated Company, then in
addition to the limitation contained in Section 13.1 of this Plan, the "Combined
Plan Fraction" shall not exceed 1.0.
(a) "Defined Contribution Plan Fraction" means a
fraction determined in accordance with the provisions of Code
Section 415(e) and the following rules with respect to the combined
participation by a Member in all defined contribution plans of the
Company and all Affiliated Companies.
(i) The numerator of such fraction is the sum of
all Annual additions to the Member's accounts under all such
plans for all of his/her years of participation in such
plans.
(ii) The denominator of this fraction is the sum of
the lesser of the following amounts determined separately
with respect to each year: (a) the product of 1.25
multiplied by the dollar limitation under Code Section
415(c)(1)(a) (determined without regard to Subsection (c)(6)
thereof), or (b) the product of 1.4 multiplied by the
percentage of compensation limitation under Code Section
415(c)(1)(b) (or Subsection (c)(7) or (8) thereof, if
applicable) with respect to the Member for such year.
(iii) At the election of the Plan Administrator, in
applying the above rules with respect to any year ending
after December 31, 1982, the denominator will respect to
each Member for all years ending before January 1, 1983,
shall be an amount equal to the product of the denominator
for the year ending 1982 otherwise determined in accordance
with the rules stated above and multiplied by the
"Transition Fraction". The "Transition Fraction" is a
fraction the numerator of which is the lesser of $51,875, or
1.4 multiplied by twenty-five (25%) percent of the
Compensation of the Member for the year ending in 1981, and
the denominator of which is the lesser of $41,500, or
twenty-five (25%) percent of the Compensation of the Member
for the year ending in 1981.
(b) "Defined Benefit Plan Fraction" means a fraction
determined in accordance with the provisions of Code Section 415(e)
and the following rules with respect to the combined participation
by a Member in all defined benefit plans of the Company and all
Affiliated Companies.
(i) The numerator of the fraction is the projected
annual benefit of the Member under all such plans
(determined as of the close of the year).
(ii) The denominator of this fraction is the lesser
of the product of 1.25 multiplied by the dollar limitation
under Code Section 415(b)(1)(a) for such year, or the
product of 1.4 multiplied by the percentage of compensation
limitation under Code Section 415(b)(1)(b) with respect to
the Member for that year.
(c) "Combined Plan Fraction" means a fraction determined
in accordance with the provisions of Code Section 415(e) and the
following rules. This fraction shall be the sum of
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the Defined Contribution Plan Fraction and the Defined Benefit Plan
Fraction. In the event that the Combined Plan Fraction would exceed
1.0 --
(i) The amount in the numerator of the Defined
Contribution Plan Fraction may be reduced in accordance with
the Treasury Regulations promulgated under Section 235(g)(3)
of the Tax Equity and Fiscal Responsibility Act of 1982,
then
(ii) The limit otherwise applicable to Member under
any or all defined benefit plans shall be accordingly
reduced.
13.4 ADJUSTMENTS FOR EXCESS ANNUAL ADDITIONS. In general, the
amount of Company Contributions for any Plan Year under this Plan and any other
defined contribution plans (as defined in Code Section 414(i)) maintained by the
Company or an Affiliated Company will be determined so as to avoid Annual
Additions in excess of the limitations set forth in Sections 13.1 through 13.4.
However, if as a result of an administrative error in calculating those Company
contributions, the Annual Additions to a Member's Account under this Plan (after
giving effect to the maximum permissible adjustments under the other plans)
would exceed the applicable limitations described in Sections 13.1 through 13.4,
the excess amount shall be subject to the following rules:
(a) If the Member had made any salary reduction
contributions to this Plan or to any other defined contribution plan
that is maintained by the Company or an Affiliated Company which
would be aggregated with this Plan under Section 13.2., these
contributions shall be returned to the Member to the extent of any
excess Annual Additions.
(b) If excess Annual Additions remain, amounts which
give rise to the excess Annual Additions under this Plan shall be
reallocated, to the extent possible, to the Accounts of the Members
who do not have excessive Annual Additions in accordance with the
allocation formula applicable to Company Elective Contributions
provided under Section 6.4. The residue of the foregoing excess
amount, if any, shall be held in a Suspense Account.
(c) Any amounts held in the Suspense Account shall be
allocated to the Company Contributions Accounts of Members as of the
next succeeding Anniversary Date based upon the allocation formula
applicable to Company Elective Contributions provided in Section
6.4.
(d) The Trustee shall segregate any amounts held in the
Suspense Account from other assets of the Plan and may place the
cash portions thereof in an interest-bearing account in any bank or
savings and loan institution, including the Trustee's own banking
department (if applicable). Any amounts held in the Suspense
Account shall not participate in any allocation of forfeitures, or
net income or loss of other assets of the Trust Fund under Article
VI.
(e) In the event the Plan shall terminate at a time when
all amounts in the Suspense Account have not been allocated to the
Accounts of the Members, the Suspense Account amounts shall be
applied as follows:
(i) The amount of the Suspense Account shall first
be allocated, as of the Plan termination date, to Members on
the same basis as specified in Section 13.4(c) above, with
the allocation to be made to the maximum extent permissible
under the Annual Additions limitations of this Article XIII,
and
(ii) If after those allocations have been made, any
further residue funds remain in the Suspense Account, the
residue shall revert to the Company in accordance with the
applicable provisions of the Code.
13.5 AFFILIATED COMPANY. For purposes of this Article XIII, the
status of an entity as an Affiliated Company shall be determined by reference to
the percentage tests set forth in Code Section 415(h).
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ARTICLE XIV
RESTRICTIONS ON ALIENATION
14.1 GENERAL RESTRICTIONS AGAINST ALIENATION.
(a) The interest of any Member or Beneficiary in the
income, benefits, payments, claims or rights hereunder, or in the
Trust Fund shall not in any event be subject to sale, assignment,
hypothecation, or transfer. Each Member and Beneficiary is
prohibited from anticipating, encumbering, assigning, or in any
manner alienating his/her interest under the Trust Fund, and is
without power to do so, except as may otherwise be provided for in
this Article XIV. The interest of any Member or Beneficiary shall
not be liable or subject to his/her debts, liabilities, or
obligations, now contracted, or which may be subsequently
contracted. The interest of any Member or Beneficiary shall be free
from all claims, liabilities, bankruptcy proceedings, or other legal
process now or hereafter incurred or arising; and the interest or
any part thereof, shall not be subject to any judgment rendered
against the Member or Beneficiary.
(b) In the event any person attempts to take any action
contrary to this Article XIV, that action shall be void and the
Company, the Plan Administrator, the Trustees and all Members and
their Beneficiaries, may disregard that action and are not in any
manner bound thereby, and they, and each of them separately, shall
suffer no liability for any disregard of that action, and shall be
reimbursed on demand out of the Trust Fund for the amount of any
loss, cost or expense incurred as a result of disregarding or of
acting in disregard of that action.
(c) The preceding provisions of this Section 14.1 shall
be interpreted and applied by the Plan Administrator in accordance
with the requirements of Code Section 401(a)(13) and ERISA Section
206(d) as construed and interpreted by authoritative judicial and
administrative rulings and regulations.
14.2 QUALIFIED DOMESTIC RELATIONS ORDERS. The rules set forth in
Section 14.1 above shall not apply with respect to a "Qualified Domestic
Relations Order" described below.
(a) A "Qualified Domestic Relations Order" is a judgment,
decree, or order (including approval of a property settlement
agreement) that --
(i) Creates or recognizes the existence of an
Alternate Payee's right to, or assigns to an Alternate Payee
the right to, receive all or a portion of the benefits
payable with respect to a Member,
(ii) Relates to the provision of child support,
alimony payments, or marital property rights to a spouse,
child or other dependent of a Member,
(iii) Is made pursuant to a State domestic relations
law (including a community property law), and
(iv) Clearly specifies:
(1) The name and last known mailing address
(if any) of the Member and the name and mailing
address of each Alternate Payee covered by the
order;
(2) The amount or percentage of the Member's
benefits to be paid to each Alternate Payee, or the
manner in which the amount or percentage is to be
determined,
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(3) The number of payments or period to
which the order applies, and
(4) Each plan to which the order applies.
For purposes of this Section 14.2, the term "Alternate Payee" means any spouse,
former spouse, child or other dependent of a Member who is recognized by a
domestic relations order as having a right to receive all, or a portion of, the
benefits payable with respect to the Member.
(b) A domestic relations order is not a Qualified
Domestic Relations Order if it requires --
(i) The Plan to provide any type or form of
benefit, or any option, not otherwise provided under the
Plan,
(ii) The Plan to provide increased benefits,
(determined on the basis of actuarial value), or
(iii) The payment of benefits to an Alternate Payee
that are required to be paid to another Alternate Payee
under a previous Qualified Domestic Relations Order.
(c) A domestic relations order shall not be considered
to fail to satisfy the requirements of Paragraph (b)(i) above with
respect to any payment made before a Member has separated from
service solely because the order requires that payment of benefits
be made to an alternate Payee --
(i) On or after the date on which the Member
attains (or would have attained) age fifty-five (55),
(ii) As if the Member had retired on the date on
which such payment is to begin under the order (based on the
value of the Member's Account balances at that time), and
(iii) In any form in which the benefits may be paid
under the Plan to the Member.
(d) In the case of any domestic relations order received
by the Plan --
(i) The Plan Administrator shall promptly notify
the Member and any Alternate Payee of the receipt of the
order and the Plan's procedures for determining the
qualified status of domestic relations orders, and
(ii) Within a reasonable period after the receipt
of the order, the Plan Administrator shall determine whether
the order is a Qualified Domestic Relations Order and shall
notify the Member and each Alternate Payee of the
determination.
(e) The Plan Administrator shall establish reasonable
procedures to determine the qualified status of domestic relations
orders and to administer distributions under Qualified Domestic
Relations Orders.
(i) During any period in which the issue of
whether a domestic relations order is a Qualified Domestic
Relations Order is being determined (by the Plan
Administrator, by a court of competent jurisdiction, or
otherwise), the Plan Administrator shall segregate in a
separate account in the Plan (or in an escrow account) the
amounts which would have been payable to the Alternate Payee
during
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the period if the order had been determined to be a Qualified
Domestic Relations Order.
(ii) If within eighteen (18) months the order (or
modification thereof) is determined to be a Qualified
Domestic Relations Order, the Plan Administrator shall pay
the segregated amounts (plus any interest thereon) to the
person or persons entitled thereto.
(iii) If within eighteen (18) months --
(1) It is determined that the order is not a
Qualified Domestic Relations Order, or
(2) The issue as to whether Qualified
Domestic Relations Order is not resolved,
then the Plan Administrator shall pay the segregated amounts
(plus any interest thereon) to the person or persons who
would have been entitled to the amounts if there had been no
order, including restoration of such amounts to the
Account(s) of the Member.
(iv) Any determination that an order is a Qualified
Domestic Relations Order that is made after the close of the
eighteen (18) month period shall be applied prospectively
only.
ARTICLE XV
SPECIAL TOP-HEAVY PLAN RULES
15.1 APPLICABILITY.
(a) Notwithstanding any provision in this Plan to the
contrary, the provisions of this Article XV shall apply in the case
of any Plan Year in which the Plan is determined to be a Top-Heavy
Plan under the rules of Section 15.3.
(b) Except as is expressly provided to the contrary, the
rules of this Article XV, shall be applied after the application of
the Affiliated Company rules of Section 2.2.
15.2 DEFINITIONS.
(a) For purposes of this Article XV, the term "Key
Employee" shall mean any Employee who, at any time during the Plan
Year or any of the four (4) preceding Plan Years, is or was --
(i) An officer of the Company having an annual
compensation from the Company greater than fifty percent
(50%) of the amount in effect under Section 415(b)(1)(a) of
the Code for the applicable Plan Year. However, no more
than fifty (50) Employees (or, if lesser, the greater of
three (3) or ten percent (10%) of the Employees) shall be
treated as officers;
(ii) One of the ten (10) employees having annual
compensation from the Company of more than the limitation in
effect under Code Section 415(c)(1)(a) and owning (or
considered as owning within the meaning of Code Section 318)
the largest interests in the Company. For this purpose, if
two (2) Employees have the same
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interest in the Company, the employee having greater annual
compensation from the Company shall be treated as having a
larger interest;
(iii) A Five Percent Owner of the Company; or
(iv) A One Percent Owner of the Company having an
annual compensation from the Company of more than one
hundred fifty thousand dollars ($150,000.00).
(b) For purposes of this Section 15.2, the term "Five
Percent Owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than five percent (5%)
of the outstanding stock of the Company or stock possessing more
than five percent (5%) of the total combined voting power of all
stock of the Company. The rules of Subsections (b), (c), and (m) of
Code Section 414 shall not apply for purposes of applying these
ownership rules.
(c) For purposes of this Section 15.2, the term "One
Percent Owner" means any person who would be described in Paragraph
(b) if "one percent (1%) were substituted for "five percent (5%)
each place where it appears therein.
(d) For purposes of this Section 15.2, the rules of Code
Section 318(a)(2)(c) shall be applied by substituting "five percent
(5%)" for "fifty percent (50%)".
(e) For purposes of this Article XV, the term "Non-Key
Employee" shall mean any Employee who is not a Key Employee.
(f) For purposes of this Article XV, the terms "Key
Employee" and "Non-Key Employee" include their Beneficiaries.
15.3 TOP-HEAVY STATUS.
(a) The term "Top-Heavy" Plan means, with respect to any
Plan Year --
(i) Any defined benefit plan if, as of the
Determination Date, the present value of the cumulative
accrued benefits under the Plan for Key Employees exceeds
sixty percent (60%) of the present value of the cumulative
accrued benefits under the plan for all Employees, and
(ii) Any defined contribution plan if, as of the
Determination Date, the aggregate of the account balances of
Key Employees under the Plan exceeds sixty percent (60%) of
the present value of the aggregate of the account balances
of all Employees under the plan.
For purposes of this Paragraph (a), the term "Determination Date"
means, with respect to any plan year, the last day of the preceding
plan year. In the case of the first plan year of any plan, the term
"Determination Date" shall mean the last day of that plan year.
(b) Each plan maintained by the Company required to be
included in an Aggregation Group shall be treated as a Top-Heavy
Plan if the Aggregation Group is a Top-Heavy Group.
(i) The term "Aggregation Group" means --
(1) Each Plan of the Company in which a Key
Employee is a Member, and
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(2) Each other plan of the Company which
enables any plan described in Paragraph (b)(i)(l) to
meet the requirements of Code sections 401(a)(4) or
410.
Also, any plan not required to be included in an Aggregation
Group under the preceding rules may be treated as being part
of such group if the group would continue to meet the
requirements of Code Sections 401(a)(4) and 410 with the
plan being taken into account.
(ii) The term "Top-Heavy Group" means any
Aggregation Group if the sum (as of the Determination Date)
of --
(1) The present value of the cumulative
accrued benefits for Key Employees under all defined
benefit plans included in the group, and
(2) The aggregate of the account balances of
Key Employees under all defined contribution plans
included in the group exceeds sixty percent (60%) of
a similar sum determined for all Employees.
(iii) For purposes of determining --
(1) The present value of the cumulative
accrued benefit of any Employee, or
(2) The amount of the account balance of any
Employee,
such present value or amount shall be increased by the
aggregate distributions made with respect to the Employee
under the plan during the five (5) year period ending on the
Determination Date. The preceding shall also apply to
distributions under a terminated plan which, if it had not
been terminated, would have been required to be included in
an Aggregation Group. Also, any rollover contribution or
similar transfer initiated by the Employee and made after
December 31, 1983 to a plan shall not be taken into account
with respect to the transferee plan for purposes of
determining whether such plan is a Top-Heavy Plan (or
whether any Aggregation Group which includes such plan is a
Top-Heavy Group).
(c) If any individual is a Non-Key Employee with respect
to any plan for any plan year, but the individual was a Key Employee
with respect to the plan for any prior plan year, any accrued
benefit for the individual (and the account balance of the
individual) shall not be taken into account for purposes of this
Section 15.3.
(d) If any individual has not received any compensation
from the Company (other than benefits under the Plan) at any time
during the five (5) year period ending on the Determination Date,
any accrued benefit for such individual (and the account of the
individual) shall not be taken into account for purposes of this
Section 15.3.
15.4 CONTRIBUTIONS. For each Plan Year in which the Plan is
Top-Heavy, the minimum contributions for that year shall be determined in
accordance with the rules of this Section 15.4.
(a) Except as provided below, the minimum contribution
for each Non-Key Employee shall be not less than three percent (3%)
of his Compensation. For this purpose, the individual's
Compensation shall be determined in accordance with the rules of
Code Section 415.
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(b) Subject to the following rules of this Paragraph
(b), the percentage set forth in Paragraph (a) above shall not be
required to exceed the percentage at which contributions (including
amounts deferred by an individual under a cash or deferred
arrangement under Section 401(k) of the Code) are made (or are
required to be made) under the Plan for the year for the Key
Employee for whom the percentage is the highest for the year. This
determination shall be made by dividing the contributions for each
Key Employee by so much of his total Compensation for the year as
determined under Section 2.16. For purposes of this Paragraph (b),
all defined contribution plans required to be included in an
Aggregation Group shall be treated as one plan. However, the rules
of this Paragraph (b) shall not apply to any plan required to be
included in an Aggregation Group if the plan enables a defined
benefit plan to meet the requirements of Code Sections 401(a)(4) or
410.
(c) The requirements of this Section 15.4 must be
satisfied without taking into account contributions under chapters 2
or 21 of the code, title II of the Social Security Act, or any other
Federal or State law.
(d) In the event a Member is covered by both a defined
contribution and a defined benefit plan maintained by the Company,
both of which are determined to be top-heavy, the Company may elect,
in its discretion, to satisfy either the defined benefit minimum or
the defined contribution minimum, in accordance with regulations
issued under Code Section 416(f).
15.5 MAXIMUM ANNUAL ADDITION.
(a) Except as set forth below, in the case of any
Top-Heavy Plan the rules of Section 13.3(a)(ii) and (b)(ii) shall be
applied by substituting "1.0" for "1.25".
(b) The rule set forth in Paragraph (a) above shall not
apply if the requirements of Subparagraphs (i) and (ii) are
satisfied.
(i) The requirements of this Subparagraph (i) are
satisfied if the rules of Paragraph (a) above would be
satisfied after substituting "four percent (4%)" for "three
percent (3%)" where it appears therein.
(ii) The requirements of this Subparagraph (ii) are
satisfied if the Plan would not be a Top-Heavy Plan if
"ninety percent (90%)" were substituted for "sixty percent
(60%)" each place it appears in Section 15.3(a)(ii).
(c) The rules of Paragraph (a) shall not apply with
respect to any individual as long as there are no--
(i) Company contributions, forfeitures, or
voluntary nondeductible contributions allocated to the
individual, or
(ii) Accruals to the individual under a defined
benefit plan maintained by the Company.
(d) In the case where the Plan is subject to the rules
of Paragraph (a) above, the rules of Section 13.3(a)(iii) shall be
applied by substituting "$41,500" for "$51,875".
15.6 NON-ELIGIBLE EMPLOYEES. The rules of this Article XV shall
not apply to any Employee included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a collective bargaining
agreement between employee representatives and one or more employers if there is
evidence that retirement benefits were the subject of good faith bargaining
between such employee representatives and the employer or employers.
46
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15.7 VESTING. In the event the Plan is Top-Heavy, then vesting
shall be determined for the first Plan Year for which the Plan is Top-Heavy and
all subsequent Plan Years under the following schedule:
Number of Years Nonforfeitable Percentage
of Service Interest
--------------- -------------------------
less than 3 0
3 or more 100%
ARTICLE XVI
PLAN AMENDMENTS
16.1 AMENDMENTS. The Board of Directors may at any time, and
from time to time, amend the Plan by an instrument in writing executed in the
name of the Company by an officer or officers duly authorized to execute such
instrument, and delivered to the applicable Trustee. However, no amendment
shall be made at any time, the effect of which would be:
(a) To cause any assets of the Trust Fund to be used for
or diverted to purposes other than providing benefits to the Members
and their Beneficiaries, and defraying reasonable expenses of
administering the Plan, except as provided in Section 5.5;
(b) To have any retroactive effect so as to deprive any
Member or Beneficiary of any accrued benefit to which he/she would
be entitled under this Plan, in contravention of Code Section
411(d)(6); or
(c) To alter or increase the responsibilities or
liabilities of a Trustee without his/her written consent.
16.2 RETROACTIVE AMENDMENTS. Notwithstanding any provisions of
this Article XVI to the contrary, the Plan may be amended prospectively or
retroactively (as provided in Section 401(b) of the Code) to make the Plan
conform to any provision of ERISA, any Code provisions dealing with
tax-qualified employees' trustees, or any regulation under either.
ARTICLE XVII
MISCELLANEOUS
17.1 NO ENLARGEMENT OF EMPLOYEE RIGHTS.
(a) This Plan is strictly a voluntary undertaking on the
part of the Company and shall not be deemed to constitute a contract
between the Company and any Employee, or to be consideration for, or
an inducement to, or a condition of, the employment of any Employee.
(b) Nothing contained in this Plan or the Trust shall be
deemed to give any Employee the right to be retained in the employ
of the Company or to interfere with the right of the Company to
discharge or retire any Employee at any time.
(c) No Employee, nor any other person, shall have any
right to or interest in any portion of the Trust Fund other than as
specifically provided in this Plan.
17.2 INSPECTION OF RECORDS. No Member, other than the Plan
Administrator (or a member of the Committee serving as Plan Administrator) or an
individual authorized by the Plan Administrator or the Company, may inspect the
records of the Plan Administrator relating to any other Member.
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17.3 MAILING OF PAYMENTS AND ADDRESSES.
(a) All payments under the Plan shall be delivered in
person or mailed to the last address or the Member (or, in the case
of death of the Member, to the last address of any other person
entitled to such payments under the terms of the Plan).
(b) Each Member shall be responsible for furnishing the
Plan Administrator with his/her correct current address and the
correct current name and address of his/her Beneficiary or
Beneficiaries.
17.4 NOTICES AND COMMUNICATIONS.
(a) All applications, notices, designations, elections,
and other communications from Members shall be in writing, on forms
prescribed by the Plan Administrator and shall be mailed or
delivered to the office designated by the Plan Administrator, and
shall be deemed to have been given when received by that office.
(b) Each notice, report, remittance, statement, and
other communication directed to a Member or Beneficiary shall be in
writing and may be delivered in person or by mail. An item shall be
deemed to have been delivered and received by the Member when it is
deposited in the United States Mail with postage prepaid, addressed
to the Member or Beneficiary at his/her last address of record with
the Plan Administrator.
17.5 GOVERNING LAW.
(a) All legal questions pertaining to the Plan shall be
determined in accordance with the provisions of ERISA and the laws
of the State of Utah.
(b) All contributions made hereunder shall be deemed to
have been made in Utah.
17.6 INTERPRETATION.
(a) Article and Section headings are for convenient
reference only and shall not be deemed to be part of the substance
of this instrument or in any way to enlarge or limit the contents of
any Article or Section.
(b) Unless the context clearly indicates otherwise,
masculine gender shall include the feminine, and the singular shall
include the plural and the plural the singular.
(c) The provisions of this Plan shall in all cases be
interpreted in a manner that is consistent with this Plan satisfying
the requirements of Code Section 401(a) for qualification as an
employees' trust.
17.7 WITHHOLDING FOR TAXES. Any payments out of the Trust Fund
may be subject to withholding for taxes as may be required by any applicable
federal or state law.
17.8 SUCCESSORS AND ASSIGNS. This Plan and the Trust established
hereunder shall inure to the benefit of, and be binding upon, the parties hereto
and their successors and assigns.
17.9 COUNTERPARTS. This Plan may be executed in any number of
identical counterparts, each of which shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purpose without
the production of any other counterparts.
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ARTICLE XVIII
MEMBER-DIRECTED ACCOUNTS
18.1 MEMBER DIRECTED INDIVIDUAL ACCOUNT PLAN. This Plan is
intended to constitute a participant directed individual account plan under
Section 404(c) of ERISA. As such, Members shall be provided the opportunity to
exercise control over some or all of the assets in their accounts under the Plan
and to choose from a broad range of investment alternatives.
18.2 AVAILABILITY OF INVESTMENT ALTERNATIVES. The Plan
Administrator, pursuant to uniform and nondiscriminatory rules, shall establish
three (3) or more Employee Selected Investment Funds in accordance with the
terms and provisions of this Article XVIII. In establishing Employee Selected
Investment Funds, the Plan Administrator shall select investment alternatives
which provide each Member with a broad range of investment alternatives as
determined to be appropriate by the Plan Administrator.
18.3 EXERCISE OF CONTROL.
(a) INVESTMENT DIRECTION. Each Member may direct that
all of the amounts attributable to his accounts or to an account
shall be invested in a single Employee Selected Investment Fund or
may direct fractional (percentage) increments of his accounts to be
invested in such fund or funds as he shall desire in accordance with
uniform procedures promulgated by the Plan Administrator.
(b) REQUIRED INFORMATION. The Plan Administrator shall
provide each Member with the opportunity to obtain sufficient
information to make informed decisions with regard to investment
alternatives available under the Plan, and incidents of ownership
appurtenant to such investments. Neither the Company or Affiliated
Company, Plan Administrator, Trustee, or any other individual
associated with the Plan or the Company or Affiliated Company shall
give investment advice to Members with respect to Plan investments.
The providing of information pursuant to this Article XIX shall not
in any way be deemed to be the providing of investment advice, and
shall in no way obligate the Company, an Affiliated Company, Plan
Administrator, Trustee or any other individual associated with the
Plan or the Company or Affiliated Company to provide any investment
advice.
(c) TRANSACTION COSTS. The Plan Administrator, pursuant
to uniform and nondiscriminatory rules, may charge each Member's
accounts for the reasonable expenses of carrying out investment
instructions directly related to such account, provided that each
Member is periodically (not less than quarterly) informed of such
actual expenses incurred with respect to his or her respective
accounts.
(d) IMPERMISSIBLE INVESTMENT INSTRUCTION. The Plan
Administrator shall decline to implement any Member instructions if:
(1) the instruction is inconsistent with any provisions of the Plan
or Trust Agreement; (2) the instruction is inconsistent with any
investment direction policies adopted by the Plan Administrator from
time to time; (3) implementing the instruction would not afford a
Plan fiduciary protection under section 404(c) of ERISA; (4)
implementing the instruction would result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code;
(5) implementing the instruction would result in taxable income to
the Plan; (6) implementing the instruction would jeopardize the
Plan's tax qualified status; or (7) implementing the instruction
could result in a loss in excess of a Member's account balance. The
Plan Administrator, pursuant to uniform and non-discriminatory
rules, may promulgate additional limitations on investment
instruction consistent with Section 404(c) of ERISA from time to
time.
(e) INDEPENDENT EXERCISE. A Member shall be given the
opportunity to make independent investment directions. No Plan
fiduciary shall subject any Member to improper
49
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influence with respect to any investment decisions, and nor shall
any Plan fiduciary conceal any non-public facts regarding a Member's
Plan investment unless disclosure is prohibited by law. Plan
fiduciaries shall remain completely neutral in all regards with
respect to Member investment direction. A Plan fiduciary may not
accept investment instructions from a Member known to the Plan
fiduciary to be legally incompetent.
(f) FAILURE TO GIVE INVESTMENT DIRECTIONS. A Member may
be required to direct the investment of his accounts as a condition
of making salary reduction contributions to the Plan. If a Member
fails for any reason to give investment directions regarding his
accounts the Trustee shall invest such amounts as the Trustee deems
to be appropriate.
18.4 ADJUSTMENT OF ACCOUNTS. Adjustments pursuant to Section 6.5
shall be made on a separate fund basis. Gains and income or losses attributable
to each Investment Fund shall be allocable strictly to the Investment Fund and
accounts invested therein. Each Investment Fund shall be invested in accordance
with the provisions of the Plan and Trust Agreement.
18.5 LIMITATION OF LIABILITY AND RESPONSIBILITY. The Trustee,
the Plan Administrator, the Company and any Affiliated Company shall not be
liable for acting in accordance with the directions of a Member pursuant to this
Article XIX or for failing to act in the absence of any such direction. The
Trustee, the Plan Administrator, and the Company and any Affiliated Company
shall not be responsible for any loss resulting from any direction made by a
Member and shall have no duty to review any direction made by a Member. The
Trustee, the Plan Administrator, the Company and any Affiliated Company shall
have no obligation to consult with any Member regarding the propriety or
advisability of any selection made by the Member.
18.6 FORMER MEMBERS AND BENEFICIARIES. For purposes of this
Article XIX, the term "Member" shall be deemed to include former Members and the
Beneficiaries of any deceased Members.
ARTICLE XIX
STOCK FUND
19.1 GENERAL. As part of the merger of the ESOP of the Company
into this Plan on December 30, 1991, the Trustee of this Plan became the owner
of a block of stock of the Company. Each Participant in the ESOP who had an
interest in the ESOP on December 30, 1991 that became part of this Plan shall
have an interest in the Stock Fund established pursuant to this Plan. To the
extent that Company Elective Contributions are added to this Stock Fund at the
direction of the Company, Members sharing in allocations of those contributions
under Section 6.5 shall also have an interest in this Stock Fund represented by
those contributions.
19.2 ACCOUNTING. The Plan Administrator shall account for each
Member's interest in the Stock Fund on either a dollar accounting or a share
accounting basis, as the Plan Administrator shall determine. The interest of
each Member in the Stock Fund shall be reflected in the Company Contributions
Account of the Member and adjusted based upon the accounting of the Stock Fund
as of each Valuation Date.
19.3 COMPANY BUT NO MEMBER DIRECTION. During such time as the
Stock Fund shall exist as a separate fund (in other words, until the Stock Fund
ceases to exist as a separate fund in accordance with the provisions of Section
19.4), a Member shall not have any right or power to transfer money into the
Stock Fund or to direct the investment of such Fund.
19.4 TRANSFERS FROM FUND EFFECTIVE AFTER JANUARY 1, 1995. In
accordance with policies and procedures established by the Plan Administrator
and as soon as administratively feasible, the Stock Fund shall cease to exist as
a separate fund within the Plan. The interest of each Member in the Stock Fund
shall become part of the Company Contributions Account of the Member that will
be subject to the investment directions of the Member provided by Article XVIII.
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IN WITNESS WHEREOF, in order to record the adoption of this restated
Plan, Nature's Sunshine Products, Inc. has caused this instrument to be executed
by its duly authorized officers this 15th day of May, 1995.
NATURE'S SUNSHINE PRODUCTS, INC.
/s/ Alan D. Kennedy
------------------------------------------
Its President
---------------------------------------
51
<PAGE>
EXHIBIT 4.2
NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
TRUST AGREEMENT
<PAGE>
INDEX
PAGE
SECTION I
General................................ 1
1.1 Compliance With Law...................................... 1
1.2 Definition of Terms...................................... 1
SECTION II
Establishment of Trust......................... 2
2.1 Establishment of Trust................................... 2
2.2 Contributions to the Trust............................... 2
2.3 Prior Administration..................................... 2
2.4 The Fund................................................. 2
2.5 Fund to be Held in Trust................................. 2
2.6 Fund to be Held for Benefit of Plan Participants......... 2
SECTION III
Administration of the Plan....................... 2
3.1 Administrator............................................ 2
3.2 Notice of Identity....................................... 2
3.3 Trustee's Right to Act................................... 2
3.4 Indemnity................................................ 3
SECTION IV
Disbursement from the Fund....................... 3
4.1 Disbursements by Trustee................................. 3
4.2 Monies Held by Administrator or Other Entity............. 3
4.3 Direction to the Trustee................................. 3
SECTION V
Allocation of Investment Responsibilities............... 3
5.2 Selection of Investment Manager.......................... 4
5.3 Investment Managers...................................... 4
5.4 Transfer of Assets to Investment Managers................ 4
5.5 Limitation of Non-Interest-Bearing Accounts.............. 5
SECTION VI
Investment of the Fund......................... 5
6.1 Standard of Care......................................... 5
6.2 Waiver of Investment Restrictions........................ 5
6.3 Grant of Investment Powers............................... 5
6.4 Maintenance of Cash Balances............................. 6
i
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SECTION VII
Powers of the Trustee......................... 7
7.1 General Powers........................................... 7
7.2 Specific Powers of the Trustee........................... 8
7.3 Maintenance of Indicia of Ownership...................... 9
7.4 Third Party Transactions................................. 9
7.5 Voting of Company Stock.................................. 9
SECTION VIII
Discretionary Powers.......................... 10
8.1 Trustee Granted Discretion............................... 10
SECTION IX
Prohibited Transactions........................ 10
9.1 Transactions which are Prohibited........................ 10
9.2 Provision of Ancillary Services by Trustee............... 10
SECTION X
Expenses, Compensation and Taxes.................... 10
10.1 Expenses and Compensation of the Trustee................. 10
10.2 Payment from the Fund.................................... 10
10.3 Payment of Taxes......................................... 10
SECTION XI
Accounts, Books and Records of the Fund................ 11
11.1 Recordkeeping Duty of Trustee............................ 11
11.2 Periodic Payments........................................ 11
11.3 Additional Accounting.................................... 11
11.4 Judicial Determination of Accounts....................... 11
11.5 Filings by Administrator................................. 11
11.6 Determination of Fair Market Value....................... 11
11.7 Retention of Records..................................... 11
SECTION XII
Fiduciary Duties of Trustee...................... 12
12.1 Acknowledgment of Fiduciary Duty......................... 12
12.2 Judicial Determination................................... 12
SECTION XIII
Resignation and Removal........................ 12
13.1 Power to Resign or Remove................................ 12
13.2 Notice................................................... 12
13.3 Successor Appointment.................................... 12
13.4 Transfer of Fund to Successor............................ 12
13.5 Retention of Nontransferable Assets...................... 12
13.6 Accounting............................................... 12
ii
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SECTION XIV
Actions by the Company or Administrator................ 13
14.1 Action by Company........................................ 13
14.2 Action by Administrators................................. 13
SECTION XV
Amendment or Termination........................ 13
15.1 Amendment or Termination................................. 13
15.2 Retention of Nontransferable Property.................... 13
15.3 Termination in the Absence of Directions from the
Administrator............................................ 13
15.4 Termination on Corporate Dissolution..................... 13
SECTION XVI
Merger or Consolidation........................ 14
16.1 Merger or Consolidation of Company....................... 14
16.2 Merger or Consolidation of Plan.......................... 14
SECTION XVII
Acceptance of Trust.......................... 14
17.1 Acceptance by Trustee.................................... 14
SECTION XVIII
Nonalienation of Trust......................... 14
18.1 Trust not Subject to Assignment or Alienation............ 14
18.2 Plans' Interest in Trust not Assignable.................. 14
SECTION XIX
Governing Law............................. 14
19.1 Governing Law............................................ 14
SECTION XX
Parties to Court Proceedings...................... 15
20.1 Only Company and Trustee Necessary....................... 15
SECTION XXI................................................................ 15
21.1 Additional Companies..................................... 15
SECTION XXII............................................................... 15
22.1 Execution in Counterparts................................ 15
iii
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NATURE'S SUNSHINE PRODUCTS, INC.
TAX DEFERRED RETIREMENT PLAN
TRUST AGREEMENT
THIS TRUST AGREEMENT made and entered into as of the 28th day of
December, 1994, between Nature's Sunshine Products, Inc., a Utah corporation
(hereinafter referred to as the "Company"), and Douglas Faggioli, Joseph A.
Speirs and Alan D. Kennedy, residents of the State of Utah (hereinafter referred
to collectively as the "Trustee"),
WITNESSETH:
WHEREAS, the Company established the NATURE'S SUNSHINE PRODUCTS,
INC. TAX DEFERRED RETIREMENT PLAN (the"Plan") by adopting the master plan and
trust of Zions First National Bank known as the Zions First National Bank
Defined Contribution Master Plan and Trust Agreement effective October 13, 1986,
with Zions First National Bank as trustee, which Plan is a profit-sharing plan
with Code Section 401(k) features under Section 401(a) of the Internal Revenue
Code of 1986, as amended, and validly existing regulations thereunder (herein
referred to in their entirety as the "Code") and the Employee Retirement
Security Act of 1974, as amended (the "Act"), for the benefit of the employees
therein described; and
WHEREAS, the Company has previously replaced Zions First National
Bank as Trustee with Douglas Faggioli, Joseph A. Speirs and Alan D. Kennedy as
Trustee of the Plan;
WHEREAS, the Company has restated the Plan effective January 1, 1989
on December 28, 1994;
WHEREAS, the Company and the Trustee wish to establish by separate
agreement a trust for the purpose of holding of assets to provide for the
funding of and payment of benefits under the Plan.
NOW, THEREFORE, the following shall be the trust agreement and trust
for the Plan:
SECTION I
General
1.1 COMPLIANCE WITH LAW. The Trust hereinafter established is
intended to comply with the Act and to be a "qualified trust" as such term is
used in Sections 401 and 501 of the Internal Revenue Code of 1986, as amended
(the "Code").
1.2 DEFINITION OF TERMS. The terms used herein shall have the
meaning ascribed to them by the Employee Retirement Income Security Act of 1974,
as amended (the "Act") or, where defined by the Plan, the Plan, unless the
context clearly indicates an intended different meaning.
<PAGE>
SECTION II
Establishment of Trust
2.1 ESTABLISHMENT OF TRUST. The Company hereby establishes with
the Trustee a trust consisting of such sums of money and such property
acceptable to the Trustee as shall from time to time be paid or delivered to the
Trustee.
2.2 CONTRIBUTIONS TO THE TRUST. The Trustee shall have no duty
to determine or collect contributions under the Plan and shall be solely
accountable for monies or properties actually received by it. The Company shall
have the sole duty and responsibility for the determination of the accuracy or
sufficiency of the contributions to be made under the Plan, the transmittal of
the same to the Trustee and compliance with any statute, regulation or rule
applicable to contributions.
2.3 PRIOR ADMINISTRATION. Except to the extent required by law,
the Trustee shall not have any duty to inquire into the administration of the
Plan or actions taken under the Plan by any prior trustee.
2.4 THE FUND. All monies and properties which become subject to
this Agreement, all investments and reinvestments made therewith and proceeds
thereof and all earnings and profits thereon, less the payments which at the
time of reference shall have been made by the Trustee as authorized herein and
any losses thereto, are referred to herein as the "Fund."
2.5 FUND TO BE HELD IN TRUST. The Fund shall be held by the
Trustee in trust and dealt with in accordance with the provisions of this
Agreement and the Act.
2.6 FUND TO BE HELD FOR BENEFIT OF PLAN PARTICIPANTS. Except as
may be provided by law for the purpose of returning the Company's contributions
or in case any Plan of which this Trust forms a part provides for the return of
company contributions in the event (i) such Plan fails to initially qualify
under the applicable provisions of the Code, or (ii) a contribution is made by a
mistake of fact, at no time prior to the satisfaction of all liabilities for
benefits under any Plan shall any part of the Fund be used for or diverted to
purposes other than for the exclusive benefit of participants, retired
participants, or their beneficiaries under the Plan and for the payment of the
reasonable expenses of the Plan.
SECTION III
Administration of the Plan
3.1 ADMINISTRATOR. The Plan shall be administered by the person
or persons, board, committee or other entity designated by the terms of the Plan
to administer the Plan or, in the absence of such designation, the Plan shall be
administered by the Company (hereinafter referred to as the "Administrator") and
the Administrator shall have the sole fiduciary duty as to such plan
administration and the Trustee shall not be responsible in any respect for such
administration.
3.2 NOTICE OF IDENTITY. The Company will furnish the Trustee
from time to time with copies of the letters of appointment evidencing the
appointment, identity and termination of office of any persons acting as or
constituting the members of any entity acting as Administrator with respect to
any rights, power or duty specified in this Agreement. The Company will notify
the Trustee from time to time in writing as to the rights, powers and duties of
each such person or entity and, in the absence of any of the above notices, the
Trustee shall rely solely upon the Company.
3.3 TRUSTEE'S RIGHT TO ACT. The Trustee shall be entitled to
deal with any person or entity identified by the Company as an Administrator
until notified otherwise by the Company, in writing.
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3.4 INDEMNITY.
(a) The Company shall fully indemnify and save harmless
the Trustee from liability and expense incident to any act or
failure to act by reason of the Trustee's reliance upon or
compliance with instructions issued by the Administrator or the
Company.
(b) To the extent permitted by law, the Company shall
indemnify each Trustee (other than a corporate fiduciary serving as
trustee) against expenses (including any amount paid in settlement)
reasonably incurred by him/her in connection with any claims against
him/her by reason of his/her conduct in the performance of his/her
duties as Trustee under this agreement, except in relation to
matters as to which he/she acted fraudulently or in bad faith in the
performance of such duties.
(c) The preceding right of indemnification shall be in
addition to any other right to which such person may be entitled as
a matter of law or otherwise, and shall pass to the estate of a
deceased person.
(d) For purposes of satisfying its indemnity obligations
under this Section, the Company may (but need not) purchase and pay
premiums for one or more policies of insurance. However, this
insurance shall not release the Company of its liability under this
section.
SECTION IV
Disbursement from the Fund
4.1 DISBURSEMENTS BY TRUSTEE. The Trustee shall make such
payments out of the Fund as the Administrator may from time to time in writing
direct. In the discretion of the Administrator, such payments may be made
directly to the person specified by the Administrator or deposited in a checking
account maintained by the Administrator for the purpose of making payments to
the person, or persons entitled to such payments under the Plan, or to an
account maintained by some other entity which the Administrator may designate to
make payments.
4.2 MONIES HELD BY ADMINISTRATOR OR OTHER ENTITY. To the extent
monies are held in accounts designated by the Administrator or by some other
entity, the Administrator or other entity shall hold such monies in trust in
such a manner that the same shall be secure from the claims of all creditors of
the Company, the Administrator, any participant or beneficiary covered by the
Plan.
4.3 DIRECTION TO THE TRUSTEE. Any direction given to the
Trustee in accordance with this Section need not specify the specific
application of the payment to be made, but shall specify that the payment is for
the purposes of the Plan or the payment of Plan's expenses.
SECTION V
Allocation of Investment Responsibilities
5.1 INVESTMENT RESPONSIBILITIES. The Trustee shall have
responsibility for the management and control of the assets of the fund and
shall from time to time invest and reinvest the fund. Notwithstanding the
foregoing, the Trustee shall follow investment directions given by the
Administrator, including but not limited to directions from plan participants
received by the Trustee from the Administrator, and shall not have fiduciary
responsibility for the investments made in accordance with such directions.
Furthermore, the Trustee shall have no responsibility for assets of the fund
that have been allocated under Section 5.3 of the Plan to the investment control
of an Investment Manager.
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5.2 SELECTION OF INVESTMENT MANAGER. The Administrator shall
have the power to appoint and remove one or more investment managers to manage
such portions of the Fund as the Administrator shall designate to the Trustee
(such investment managers are hereinafter referred to singularly as an
"Investment Manager" and collectively as the "Investment Managers"). Each such
Investment Manager shall be either (i) registered as an investment adviser under
the Investment Advisers Act of 1940; (ii) a bank, as defined in that Act; or
(iii) an insurance company qualified to perform investment services under the
laws of more than one State. Each Investment Manager shall accept its
appointment and acknowledge in writing to the Trustee and Administrator that it
is a fiduciary with respect to the Plan's assets under its management.
5.3 INVESTMENT MANAGERS.
(a) Upon the appointment of each Investment Manager, the
Administrator shall so notify the Trustee and instruct the Trustee in writing to
segregate into a separate account those assets as to which each Investment
Manager has discretion and control. The Investment Manager shall designate in
writing the person or persons who are to represent any such Investment Manager
in dealings with the Trustee. Except as provided in Section 5.5, upon the
segregation of the assets in accordance with the instructions of the
Administrator, the Trustee shall thereupon be relieved and released of all
investment duties, responsibilities and liabilities normally and statutorily
incident to a trustee as to such separate account, and shall not be liable for
the acts or omissions of the Investment Manager, except to the extent that
co-fiduciary liability may be imposed under the Act. Except as provided in
Section 5.5 or as otherwise provided by the Administrator in writing from time
to time, the Trustee shall take no action with respect to the duties or powers
allocated to an Investment Manager in Section 6 or Section 7 without receipt of
written directions of the Investment Manager. Unless specifically prohibited in
writing, the Trustee, as custodian, may hold the assets of such separate account
in the name of a nominee or nominees.
(b) Should an Investment Manager at any time elect to place
security transactions directly with a broker or dealer, the Trustee shall not
recognize such transaction unless and until it has received instructions or
confirmation of such fact from the Investment Manager. Should the Investment
Manager direct the Trustee to utilize the services of any person with regard to
the assets under its management or control, such instructions shall be in
writing and shall specifically set forth the actions to be taken by the Trustee
as to such services.
(c) In the event that an Investment Manager places security
transactions directly or directs the utilization of a service, the Investment
Manager shall be solely responsible for the acts of such persons. The sole duty
of the Trustee as to such transactions shall be incident to its duties as
custodian.
(d) Upon the resignation or removal of an Investment Manager and
upon receipt of written notice from the Administrator that an Investment
Manager's authority has terminated, and unless the Administrator informs the
Trustee that a successor Investment Manager has been appointed, the Trustee
shall reassume complete investment responsibility for the assets of the Fund
previously under such Investment Manager's investment control.
5.4 TRANSFER OF ASSETS TO INVESTMENT MANAGERS.
(a) Upon receipt of written directions by the Administrator, the
Trustee shall (i) transfer and deliver such part of the assets of the Fund as
may be specified in such writing to any Investment Manager so appointed, and
(ii) accept the transfer back to it of any such assets at any time held by an
Investment Manager, provided that the Administrator may only direct such
transfers as are in conformity with the provisions of the Plan, this Agreement,
the Act, and Sections 401(a) and 501(a) of the Code. Any such written direction
shall constitute a certification to the Trustee by the Administrator that the
transfer so directed is one which the Administrator is authorized to direct and
is in conformity with the aforesaid provisions.
(b) If any assets are so transferred to the custody of an
Investment Manager, such Investment Manager shall undertake and be responsible
for all the custodial duties therefore, and such assets shall remain for all
purposes a part of the Fund and the Trust, and as such, subject to all the terms
and provisions of
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this Agreement. If any Investment Manager receiving such assets is a bank or
trust company, it may invest any part or all of such assets in units of any
collective, common or pooled trust fund operated or maintained by it exclusively
for the commingling and collective investment of monies or other assets held
under or as part of a plan which is established in conformity with and qualifies
under Section 401(a) of the Code. Notwithstanding the provisions of this
Agreement which place restrictions upon the actions of the Trustee, or the
Investment Manager, to the extent monies or other assets are utilized to acquire
units of any collective trust, the terms of the collective trust indenture shall
solely govern the investment duties responsibilities and powers of the trustee
of such collective trust, and to the extent required by law, such terms,
responsibilities and powers shall be incorporated herein by reference and shall
be part of this Agreement. For the purposes of valuation of any interest under
the Plans of which this trust forms a part, the value of the interest maintained
by the Fund in such collective trust shall be the fair market value of the
collective fund units held determined in accordance with generally recognized
valuation procedures.
(c) The Trustee shall have no duty or responsibility as to the
safekeeping of such assets or as to the investment and reinvestment of the same,
except that the Trustee shall require such statements and reports from such
Investment Manager as may be necessary to enable the Trustee and the
Administrator to carry out their recordkeeping and reporting duties under this
Agreement. The Trustee shall enter into and execute such agreements, receipts
and releases as shall be required to carry out the directions of the
Administrator with respect to the transfer of any assets of the Fund to or from
an Investment Manager in accordance with this Section 5.4.
5.5 LIMITATION OF NON-INTEREST-BEARING ACCOUNTS. Unless the
Trustee has received contrary instructions from either the Administrator or an
Investment Manager, it shall invest for short term purposes any cash under the
investment control of an Investment Manager, which is in its custody and has not
otherwise been invested by the Investment Manager, in short term securities of
the United States of any agency or instrumentality thereof, certificates of
deposit, money market funds, and (if subject to withdrawal on a daily or weekly
basis) participations in common or collective funds composed thereof.
SECTION VI
Investment of the Fund
6.1 STANDARD OF CARE. The Trustee and each Investment Manager
shall discharge its investment duties as provided under Sections 5 and 6 hereof
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character with like
aims and by diversifying the investments held hereunder consistent with
investment policies, objectives and guidelines so as to minimize the risk of
large losses, unless under the Plan or circumstances it would be clearly not
prudent to diversify.
6.2 WAIVER OF INVESTMENT RESTRICTIONS. Such investment and
reinvestment shall not be restricted to securities or property of the character
authorized for investments by trustees or investment managers under any statute
or other laws of any state, district or territory.
6.3 GRANT OF INVESTMENT POWERS. In addition to any power
granted to trustees or investment managers under any statute or other laws, such
laws and statutes if necessary being incorporated herein by reference, the
Trustee's and each Investment Manager's investment powers may, unless restricted
in writing by the Administrator, include, but shall not be limited to,
investment in the following:
(a) domestic or foreign common and preferred stocks and
options thereof, as well as warrants, rights and preferred stocks
convertible into common stock, regardless of where or how traded
(including stock of the Company to the extent directed to so invest
by the Administrator or by investment direction from a participant
receive through the Administrator);
(b) corporate bonds and debentures and any such
securities which are convertible into common stock, domestic or
foreign;
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(c) bonds or other obligations of the United States of
America or any foreign nation, and any agencies thereof, or any
bonds or other obligations which are directly or indirectly
guaranteed by the United States or any foreign nation, or any agency
thereof;
(d) obligations of the states and of municipalities or
of any agencies thereof;
(e) notes of any nature, of foreign or domestic issuers;
(f) mortgages and real estate, wherever situate and
whether developed or undeveloped, including sales and leasebacks,
interests or participations in real estate investment trusts,
non-income producing properties, real estate partnerships, trusts
and group trusts;
(g) savings accounts, certificates of deposit and other
types of time deposits, bearing a reasonable rate of interest based
upon the duration, amount, type and geographical area, with any
financial institution or quasi-financial institution or any
department of the same, either domestic or foreign, under the
supervision of the United States or of any State, including any such
financial institution owned, operated or maintained by a Trustee in
its corporate or association capacity (including any department or
division of the same) or a corporation or association affiliated
with the same;
(h) leaseholds of any duration;
(i) mineral and other natural resources, including, but
not limited to, oil, gas, timber and coal, and any participation
therein in any form, including but not limited to, royalties,
ownership, drilling and exploration, partnerships, commingled funds
and trusts;
(j) units of any collective, common or pooled trust fund
operated or maintained exclusively for the commingling and
collective investment of monies or other assets held under or as
part of a plan which is established in conformity with and qualifies
under Section 401(a) of the Code, including any such fund operated
or maintained by a Trustee. The Company shall specify in an
attachment to this Trust Agreement the collective, common or pooled
trust funds in which the Trustee or an Investment Manager is
authorized hereunder to invest. Notwithstanding the provisions of
the Agreement which place restrictions upon the actions of the
Trustee or an Investment Manager, to the extent monies or other
assets are utilized to acquire units of any collective trust, the
terms of the collective trust indenture shall solely govern the
investment duties, responsibilities and powers of the trustee of
such collective trust, and such terms, responsibilities and powers
shall be incorporated herein by reference and shall be part of this
Agreement. For the purposes of valuation of any interest under the
Plan of which this Trust forms a part, the value of the interest
maintained by the Fund in such collective trust shall be the fair
market value of the collective fund units held determined in
accordance with generally recognized valuation procedures;
(k) open-end and closed-end investment companies,
regardless of the purposes for which such fund or funds were
created, and any partnership, limited or unlimited, joint venture
and other forms of joint enterprise created for any lawful purpose;
(l) individual or group insurance policies and contracts
including, but not limited to, life insurance, annuity (fixed or
variable) and investment policies and contracts, but only if
directed by an Administrator to purchase or retain such policies and
contracts.
6.4 MAINTENANCE OF CASH BALANCES. The Trustee shall keep such
portion of the Fund in cash or cash balances as may be specified from time to
time in a written request from an Administrator to meet contemplated payments
from the Fund. The Trustee shall invest such cash balances and any other
portions of the Fund which may be in cash or cash balances in short term
securities of the United States or any agency or instrumentality thereof,
certificates of deposit, money market funds, and (if subject to withdrawal on a
daily or
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weekly basis) participations in common or collective funds composed thereof,
including those operated or maintained by a Trustee.
SECTION VII
Powers of the Trustee
7.1 GENERAL POWERS. The Trustee shall have and exercise the
following powers and authority in the administration of the Fund only on the
direction of an Investment Manager where such powers and authority relate to a
separate account established for an Investment Manager and only on the direction
of the Administrator with respect to assets acquired at the direction of the
Administrator (including investment direction from a plan participant received
through the Administrator), and in its sole discretion where such powers and
authority relate to investments made by the Trustee in accordance with Section
5.1:
(a) to purchase, receive or subscribe for any securities
or other property and to retain in trust such securities or other
property;
(b) to sell, exchange, convey, transfer, lend, or
otherwise dispose of any property held in the Fund and to make any
sale by private contract or public auction; and no person dealing
with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or
propriety of any such sale or other disposition;
(c) to vote in person or by proxy any stocks, bonds or
other securities held in the Fund;
(d) to exercise any rights appurtenant to any such
stocks, bonds or other securities for the conversion thereof into
other stocks, bonds or securities, or to exercise rights or options
to subscribe for or purchase additional stocks, bonds or other
securities, and to make any and all necessary payments with respect
to any such conversion or exercise, as well as to write options with
respect to such stocks and to enter into any transactions in other
forms of options with respect to any options which the Fund has
outstanding at any time;
(e) to join in, dissent from or oppose the
reorganization, recapitalization, consolidation, sale or merger of
corporations or properties of which the Fund may hold stocks, bonds
or other securities or in which it may be interested, upon such
terms and conditions as deemed wise, to pay any expenses,
assessments or subscriptions in connection therewith, and to accept
any securities or property, whether or not trustees would be
authorized to invest in such securities or property, which may be
issued upon any such reorganization, recapitalization,
consolidation, sale or merger and thereafter to hold the same,
without any duty to sell;
(f) to manage, administer, operate or lease for any
number of years, regardless of any restrictions on leases made by
fiduciaries, develop, improve, repair, alter, demolish, mortgage,
pledge, grant options with respect to, or otherwise deal with any
real property or interest therein at any time held by it, all upon
such terms and conditions as may be deemed advisable, to renew or
extend or participate in the renewal or extension of any mortgage
upon such terms as may be deemed advisable, and to agree to a
reduction in the rate of interest on any mortgage or any other
modification or change in the terms of any mortgage or of any
guarantee pertaining thereto in any manner and to any extent that
may be deemed advisable for the protection of the Fund or the
preservation of the value of the investment; to waive any default,
whether in the performance of any guarantee, or to enforce any
default in such manner and to such extent as may be deemed
advisable; to exercise and enforce any and all rights of
foreclosure, to bid in the property on foreclosure, to take a deed
in lieu of foreclosure, with or without paying a consideration
therefor, and in connection therewith to release the obligation on
the bonds or notes secured by such mortgage and to exercise and
enforce in any action, suit or
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proceeding at law or in equity any right or remedy in respect to any
such mortgage or guarantee;
(g) to explore for and to develop mineral interests and
other natural resources and to acquire land, either by lease or
purchase, for such purpose, and to enter into any type of contract
or agreement incident thereto, and to sell any product produced by
reason of or resulting from such development or exploration to any
person or persons on such terms and conditions as the Trustee or
Investment Manager deems advisable, to enter into agreements and
contracts for transportation of the same;
(h) to insure, according to customary standards, any
property held in the Fund for any amount and to pay any premiums
required for such coverage;
(i) to purchase or otherwise acquire and make payment
therefor from the Fund any bond or other form of guarantee or surety
required by any authority having jurisdiction over this Trust and
its operation, or believed by the Trustee or Investment Manager to
be in the best interests of the Fund, except the Trustee or
Investment Manager may not obtain any insurance whose premium
obligation extends to the Fund which would protect the Trustee
against its liability for breach of fiduciary duty;
(j) to enter into any type of contract with any
insurance company or companies, either for the purposes of
investment or otherwise; provided that no insurance company dealing
with the Trustee shall be considered to be a party to this Agreement
and shall only be bound by and held accountable to the extent of its
contract with the Trustee. Except as otherwise provided by any
contract, the insurance company need only look to the Trustee with
regard to any instruction issued and shall make disbursements or
payments to any person, including the Trustee, as shall be directed
by the Trustee. Where applicable, the Trustee shall be the sole
owner of any and all insurance policies or contracts issued. Such
contracts or policies, unless otherwise determined, shall be held as
an asset of the Fund for safekeeping or custodian purposes only;
(k) to lend the assets of the Fund upon such terms and
conditions as are deemed necessary and appropriate and specifically
to loan any securities to brokers, dealers or banks upon such terms,
and secured in such manner, as may be advisable, to permit the
loaned securities to be transferred into the name of the borrower or
others and to permit the borrower to exercise such rights of
ownership over the loaned securities as may be required under the
terms of any such loan, provided that, any loans made from the Fund
shall be made in conformity with such laws or regulations governing
such lending activities which may have been promulgated by any
appropriate regulatory body at the time of such loan.
(l) to receive assets representing the benefits of plan
participants transferred to the Plan to the extent authorized by
written directions of the Administrator.
7.2 SPECIFIC POWERS OF THE TRUSTEE. The Trustee shall have the
following powers and authority, to be exercised in its sole discretion with
respect to the Fund:
(a) to appoint agents, custodians, depositories or
counsel, domestic or foreign, as to part or all of the Fund and
functions incident thereto and to pay their reasonable fees,
expenses and compensation with the approval of the Company where, in
the sole discretion of the Trustee, such delegation is necessary in
order to facilitate the operations of the Fund and such delegation
is not inconsistent with the purposes of the Fund or in
contravention of any applicable law. To the extent that the
appointment of any such person or entity may be deemed to be the
appointment of a fiduciary, the Trustee may exercise the powers
granted hereby to appoint as such a fiduciary any person or entity,
including but not limited to, the Company, notwithstanding the fact
that such person or entity is then considered a fiduciary, a party
in
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interest or a disqualified person. Upon such delegation, the
Trustee may require such reports, bonds or written agreements as it
deems necessary to properly monitor the actions of its delegate.
(b) to cause any investment, either in whole or in part,
in the Fund to be registered in, or transferred into, the Trustee's
name or the names of a nominee or nominees, provided the Trustee
shall at all times show that such investments are a part of the
Fund; and to cause any such investment, or the evidence thereof, to
be held by the Trustee, in a depository, in a clearing corporation,
in book entry form, or by any other entity or in any other manner
permitted by law;
(c) to make, execute and deliver, as trustee, any and
all deeds, leases, mortgages, conveyances, waivers, releases or
other instruments in writing necessary or desirable for the
accomplishment of any of the foregoing powers;
(d) to defend against or participate in any legal
actions involving the Fund or the Trustee in its capacity stated
herein, in the manner and to the extent it deems advisable, the
costs of any such defense or participation to be borne by the Fund,
unless paid by the Company in accordance with Section 10; provided,
however, the Trustee shall notify the Company of all such actions
and the Company may, in its sole discretion, determine against the
incurrence of any such legal fees and expenses which may be incurred
beyond those necessary to protect the Fund against default or
immediate loss and may participate in the selection of and
instructions to legal counsel;
(e) to form corporations and to create trusts, to hold
title to any security or other property, to enter into agreements
creating partnerships or joint ventures for any purpose or purposes
determined by the Trustee to be in the best interests of the Fund;
(f) to establish and maintain such separate accounts in
accordance with the instructions of an Administrator or the Company
as an Administrator or the Company deems necessary for the proper
administration of the Plan, or as determined to be necessary by the
Trustee. Such accounts shall be subject to the general terms of
this Agreement, unless the Trustee is notified of a contrary intent
by an Administrator or the Company in writing;
(g) to generally take all action, whether or not
expressly authorized, which the Trustee may deem necessary or
desirable for the protection of the Fund.
7.3 MAINTENANCE OF INDICIA OF OWNERSHIP. The Trustee shall not
maintain indicia of ownership of any asset of the Fund held by it outside the
jurisdiction of the District courts of the United States unless such holding is
approved through ruling or regulation promulgated under the Act by the Secretary
of Labor.
7.4 THIRD PARTY TRANSACTIONS. In addition, and not by way of
limitation, the Trustee shall have any and all powers and duties concerning the
investment, retention or sale of property held in trust as if it were absolute
owner of the property, and no restrictions with regard to the property so held
shall be implied, warranted or sustained by reason of this Agreement; provided
however, at no time shall the exercise of such powers and duties establish any
evidence which would permit a third party to assert a right, title or interest
superior to that of the Plan in the property held in the Fund.
7.5 VOTING OF COMPANY STOCK. The Trustee shall exercise all
voting rights of Company Stock held in the Fund.
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SECTION VIII
Discretionary Powers
8.1 TRUSTEE GRANTED DISCRETION. The Trustee is hereby granted
any and all discretionary powers not explicitly or implicitly conferred by this
Agreement which it may deem necessary or proper for the protection of the
property held hereunder.
SECTION IX
Prohibited Transactions
9.1 TRANSACTIONS WHICH ARE PROHIBITED. Notwithstanding any
provision of this Agreement, either appearing before or after this Section, the
Trustee shall not engage in or cause the Trust to engage in any transaction if
it knows or should know, that such transaction constitutes a direct or indirect
prohibited transaction, as defined in Section 406 of the Act or Section 4975 of
the Code.
9.2 PROVISION OF ANCILLARY SERVICES BY TRUSTEE. Notwithstanding
the foregoing, the Trustee may, in addition to the services rendered in
conjunction with its duties and responsibilities as Trustee under the terms of
this Agreement, provide such ancillary services as meet the following standards:
(a) there have been adopted by the Trustee internal
safeguards which assure that such ancillary services are consistent
with sound banking and financial practices as determined by the
appropriate banking authority;
(b) the ancillary services are provided in accordance
with guidelines which are intended to meet the standards established
by the appropriate banking authority;
(c) the compensation received by the Trustee for such
services is reasonable and established in an arm's-length manner.
SECTION X
Expenses, Compensation and Taxes
10.1 EXPENSES AND COMPENSATION OF THE TRUSTEE. The Trustee shall
be entitled to be reimbursed by the Company for all reasonable expenses incurred
by the Trustee as a result of the execution of its duties hereunder, including,
but not limited to, legal and accounting expenses, expenses incurred as a result
of disbursements and payments made by the Trustee and, with the consent of the
Company, reasonable compensation for agents, counsel or other services rendered
to the Trustee by third parties and expenses incident thereto. The Trustee, if
not an employee of the Company, shall be entitled to such reasonable
compensation for services rendered by it as agreed upon by the Company and the
Trustee from time to time
10.2 PAYMENT FROM THE FUND. All compensation, expenses, taxes
and assessments in respect of the Fund, to the extent that they are not paid by
the Company, shall constitute a charge upon the Fund and be paid by the Trustee
from the Fund upon written notice from the Company.
10.3 PAYMENT OF TAXES. The Trustee shall notify the Company upon
receipt of notice with regard to any proposed tax deficiencies or any tax
assessments which it receives on any income or property in the Fund and, unless
notified to the contrary by the Company within thirty (30) days, shall pay any
such assessment or take any action it may determine, including contesting the
assessment or litigating any claims.
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SECTION XI
Accounts, Books and Records of the Fund
11.1 RECORDKEEPING DUTY OF TRUSTEE. The Trustee shall keep
accurate and detailed accounts of all investments, receipts and disbursements
and other transactions hereunder, and all accounts, books and records relating
thereto shall be open at all reasonable times to inspection and audit by any
person designated by the Company.
11.2 PERIODIC PAYMENTS. In addition, within sixty (60) days
following December 31 of each year, or following the close of such other period
as may be agreed upon between the Trustee and the Company, and within sixty (60)
days, or such other agreed upon period, unless such period be waived, after the
removal or resignation of the Trustee as provided for in the Agreement, the
Trustee shall file with the Administrator and the Company a certified written
report setting forth all investments, receipts and disbursements, and other
transactions effected during the period or during the period from the close of
the preceding fiscal year or other preceding period to the date of such removal
or resignation, including a description of all securities and investment
purchases and sales with the cost or net proceeds of such purchases or sales and
showing all cash, securities and other property held at the close of such fiscal
year or other period, valued currently, and such other information as may be
required of the Trustee under any applicable law.
11.3 ADDITIONAL ACCOUNTING. Except as provided below, neither
the Administrator nor the Company shall have the right to demand or be entitled
to any further accounting different from the normal accounting rendered by the
Trustee. Further, no participant, beneficiary or any other person shall have
the right to demand or be entitled to any accounting by the Trustee, other than
those to which they may be entitled under the law. The Administrator or the
Company shall have the right to inspect the Trustee's books and records relating
to the Fund during normal business hours or to designate an accountant to make
such inspection, study, and/or audit with all expenses related thereto to be
paid by the Company.
11.4 JUDICIAL DETERMINATION OF ACCOUNTS. Nothing contained
herein will be construed or interpreted to deny the Trustee or the Company the
right to have the Trustee's account judicially determined.
11.5 FILINGS BY ADMINISTRATOR. For the purposes of this Section,
the Trustee shall conclusively presume that the Administrator has made all
Federal filings as of the date required. Should the Trustee incur any liability
by reason of an Administrator's failure to timely file, the Company shall fully
reimburse the Trustee for any and all obligations, including penalties, interest
or expenses, so incurred by the Trustee.
11.6 DETERMINATION OF FAIR MARKET VALUE. The Trustee shall
determine the fair market value of the Fund as of each December 31 (and such
other times as may be agreed upon by the Trustee and the Company) based upon
generally accepted accounting principles applicable to trusts of a same or
similar nature to the one created herein.
11.7 RETENTION OF RECORDS. All records and accounts maintained
by the Trustee with respect to the Fund shall be preserved for such period as
may be required under any applicable law. Upon the expiration of any such
required retention period, the Trustee shall have the right to destroy such
records and accounts after first notifying the Company in writing of its
intention and transferring to the Company any records and accounts requested.
The Trustee shall have the right to preserve all records and accounts in
original form, or on microfilm, magnetic tape, or any other similar process.
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SECTION XII
Fiduciary Duties of Trustee
12.1 ACKNOWLEDGMENT OF FIDUCIARY DUTY. The Trustee acknowledges
that it assumes the fiduciary duties established by this Agreement.
12.2 JUDICIAL DETERMINATION. The Trustee shall not, however, be
liable for any loss to or diminution of the Fund except to the extent that any
such loss or diminution results from act or inaction on the part of the Trustee
which is judicially determined or agreed by the Company and the Trustee to be a
breach of its fiduciary duties.
SECTION XIII
Resignation and Removal
13.1 POWER TO RESIGN OR REMOVE. A Trustee may be removed with
respect to all, or a part of, the Fund by the Company upon written notice to the
Trustee to that effect. A Trustee may resign as Trustee hereunder, upon written
notice to that effect delivered to the Company.
13.2 NOTICE. Such removal or resignation shall become effective
as of the last day of the month which coincides with or next follows the
expiration of thirty (30) days from the date of the delivery of such written
notice, unless an earlier or later date is agreed upon in writing by the Company
and the Trustee.
13.3 SUCCESSOR APPOINTMENT. In the event of such removal or
resignation, a successor Trustee may be appointed by the Company to become
Trustee as of the time such removal or resignation becomes effective. The
Company shall make such appointments as may be necessary so that there is a
Trustee for the Fund. Such successor Trustee shall accept such appointment by
an instrument in writing delivered to the Company and the Trustee and upon
becoming successor Trustee shall be vested with all the rights, powers, duties,
privileges and immunities as successor Trustee hereunder as if originally
designated as Trustee in this Agreement.
13.4 TRANSFER OF FUND TO SUCCESSOR. Upon such appointment and
acceptance, the retiring Trustee shall endorse, transfer, assign, convey and
deliver to the successor Trustee all of the funds, securities and other property
then held by it in the Fund, except such amount as may be reasonable and
necessary to cover its compensation and expenses as may be agreed to by the
Company in connection with the settlement of its accounts and the delivery of
the Fund to the successor Trustee, and the balance remaining of any amount so
reserved shall be transferred and paid over to the successor Trustee promptly
upon settlement of its accounts, subject to the right of the retiring Trustee to
retain any property deemed unsuitable by it for transfer until such time as
transfer can be made.
13.5 RETENTION OF NONTRANSFERABLE ASSETS. If the retiring
Trustee holds any property unsuitable for transfer, it shall retain such
property, and as to such property alone it shall be a co-trustee with the
successor Trustee, its duties and obligations being solely limited to any such
property, and it shall not have fiduciary duties of any nature as to assets
transferred. Should the successor Trustee accept fiduciary responsibility as to
such property, the Trustee shall retain only custodian duties as to such
property.
13.6 ACCOUNTING. In the event of the removal or resignation of
the Trustee hereunder, the Trustee shall file with the Company a statement and
report of its accounts and proceedings covering the period from its last annual
statement and report, and its liability and accountability to anyone with
respect to the propriety of its acts and transactions shown in such written
statement and report shall be governed by the terms of this Agreement.
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SECTION XIV
Actions by the Company or Administrator
14.1 ACTION BY COMPANY. Any action by the Company pursuant to
this Agreement shall be evidenced or empowered in writing from the Company to
the Trustee, and the Trustee shall be entitled to rely on such writing.
14.2 ACTION BY ADMINISTRATORS. Any action by any person or
entity duly empowered to act on behalf of an Administrator with respect to any
rights, powers or duties specified in this Agreement shall be in writing, signed
by such person or by the person designated by an Administrator and the Trustee
shall act and shall be fully protected in acting in accordance with such
writing.
SECTION XV
Amendment or Termination
15.1 AMENDMENT OR TERMINATION. The Company shall have the right
at any time and from time to time by appropriate action:
(a) to modify or amend in whole or in part any or all of
the provisions of this Agreement by written notice to the Trustee;
provided, however, that no modification or amendment which affects
the rights, duties or responsibilities of the Trustee may be made
without the Trustee's consent, or
(b) to terminate this Agreement upon thirty (30) days'
prior notice in writing delivered to the Trustee;
provided, further, that no termination, modification or amendment shall permit
any part of the corpus or income of the Fund to be used for or diverted to
purposes other than for the exclusive benefit of such participants, retired
participants and their beneficiaries, except for the return of Company
contributions and/or any surplus which are allowed by law and permitted under
the Plan.
15.2 RETENTION OF NONTRANSFERABLE PROPERTY. The Trustee reserves
the right to retain such property as is not, in the opinion of counsel, suitable
for distribution at the time of termination of this Agreement and shall hold
such property in trust under this Agreement for those persons or other entities
entitled to such property until such time as the Trustee is able to make
distribution. Upon complete distribution of all property constituting the Fund,
this Agreement shall be deemed terminated.
15.3 TERMINATION IN THE ABSENCE OF DIRECTIONS FROM THE
Administrator. In the event no direction is provided by the Administrator with
respect to the distribution of the Fund upon termination of this Agreement, the
Trustee shall make such distributions as are specified by the Plan after notice
to the Company. In the event the Plan is silent as to the distributions to be
made upon termination of the Plan or the terms of the Plan are inconsistent with
the then applicable law, the Trustee shall distribute the Fund to participants
and their beneficiaries under the Plan in an equitable manner that will not
adversely affect the qualified status of the Plan under Section 401(a) of the
Code or any other statute of similar import and that will comply with any
applicable provisions of the Act regulating the allocation of assets upon
termination of plans such as the Plan; provided, however, that subject to the
terms of the Plans and applicable law, any excess assets remaining after
satisfaction of the Plans' liabilities may be returned to the Company. The
Trustee, in such case, reserves the right to seek a judicial and administrative
determination as to the proper method of distribution of the Fund upon
termination of this Agreement.
15.4 TERMINATION ON CORPORATE DISSOLUTION. If the Company ceases
to exist as a result of liquidation, dissolution or acquisition in some manner,
the Fund shall be distributed as provided above upon
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termination of a Plan unless a successor company elects to continue the Plan and
this Agreement as provided in this Agreement.
SECTION XVI
Merger or Consolidation
16.1 MERGER OR CONSOLIDATION OF COMPANY. Any corporation into
which the Company may be merged or with which it may be consolidated, or any
corporation succeeding to all or a substantial part of the business interests of
the Company may become the Company hereunder by expressly adopting and agreeing
to be bound by the terms and conditions of the Plan and this Agreement and so
notifying the Trustee to such effect by submission to the Trustee of an
appropriate written document.
16.2 MERGER OR CONSOLIDATION OF PLAN. In the event that the
Company authorizes and directs that the assets of another plan be merged or
consolidated with or transferred to the Plan participating in this Trust, the
Trustee shall take no action with regard to such merger, consolidation or
transfer until it has been notified in writing that each participant covered
under the plan the assets of which are to be merged consolidated or transferred
will immediately after such merger, consolidation or transfer be entitled to a
benefit either equal to or then greater than the benefit he would have been
entitled to had the Plan been terminated.
SECTION XVII
Acceptance of Trust
17.1 ACCEPTANCE BY TRUSTEE. The Trustee accepts the Trust
created hereunder and agrees to be bound by all the terms of this Agreement.
SECTION XVIII
Nonalienation of Trust
18.1 TRUST NOT SUBJECT TO ASSIGNMENT OR ALIENATION. Except as
heretofore provided, no company, participant or beneficiary of the Plan to which
the Trust applies shall have any interest in or right to the assets of this
Trust, and to the full extent of all applicable laws, the assets of this Trust
shall not be subject to any form of attachment, garnishment, sequestration or
other actions of collection afforded creditors of the Company, participants or
beneficiaries. The Trustee shall not recognize any assignment or alienation of
benefits unless, and then only to the extent, written notices are received from
the Administrator for the Plan.
18.2 PLANS' INTEREST IN TRUST NOT ASSIGNABLE. The equity or
interest of the Plan in the Fund shall not be assignable.
SECTION XIX
Governing Law
19.1 GOVERNING LAW. This Agreement shall be construed and
enforced, to the extent possible, according to the laws of the state of Utah,
and all provisions hereof shall be administered according to the laws of said
state and any federal laws, regulations or rules which may from time to time be
applicable. In case of any conflict between the provisions of the Plan and this
Agreement, this Agreement shall govern.
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SECTION XX
Parties to Court Proceedings
20.1 ONLY COMPANY AND TRUSTEE NECESSARY. To the extent permitted
by law, only the Trustee and the Company shall be necessary parties in any
application to the courts for an interpretation of this Agreement or for an
accounting by the Trustee, and no participant under any Plan or other person
having an interest in the Fund shall be entitled to any notice or service of
process. Any final judgment entered in such an action or proceeding shall, to
the extent permitted by law, be conclusive upon all persons claiming under this
Agreement or any Plan.
SECTION XXI
21.1 ADDITIONAL COMPANIES. Any entity affiliated with the
Company that adopts as a participating employer a plan of the Company to which
this Trust is the trust, may become a party hereto, subject to the approval of
the Company.
SECTION XXII
22.1 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by any one counterpart.
WITNESS the due execution hereof as of the date first above written.
NATURE'S SUNSHINE PRODUCTS, INC.
By /s/ Alan D. Kennedy
----------------------------------------
Its President
----------------------------------------
TRUSTEE:
/s/ Douglas Faggioli
-------------------------------------------
Douglas Faggioli
/s/ Joseph A. Speirs
-------------------------------------------
Joseph A. Speirs
/s/ Alan D. Kennedy
-------------------------------------------
Alan D. Kennedy
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Attachment Specifying
Collective, Common or Pooled Trust Funds
In accordance with the terms of Section 6.3(k) of the Trust
Agreement, the Company hereby authorizes investment by the Trustee or Investment
Manager in the following collective, common or pooled trust funds:
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EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated February 14, 1995
included in Nature's Sunshine Products, Inc.'s Form 10-K for the year ended
December 31, 1994 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Salt Lake City, Utah
May 19, 1995
