<PAGE>
As filed with the Securities and Exchange Commission on June 18, 1999
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
Registration Statement
Under
The Securities Act of 1933
-----------------------------
R.R. Donnelley & Sons Company
(Exact Name of Registrant as Specified in its Charter)
-----------------------------
Delaware 36-1004130
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
77 West Wacker Drive
Chicago, Illinois 60601
(Address of Principle Executive Offices) (Zip Code)
Donnelley Deferred Compensation and Voluntary Savings Plan
(Full Title of the Plan)
Monica M. Fohrman, Secretary
77 West Wacker Drive
Chicago, Illinois 60601
(Name of Agent For Service)
(312) 326-8000
(Telephone Number, Including
Area Code of Agent for Service)
---------------------
Copy to:
Jim L. Kaput
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================================
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered(1) Registered(2) Offering Price Per Share Aggregate Offering Price Registration Fee
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 4,000,000 shares $37.84(3) $151,360,000.00(3) $42,078.08
$1.25
- --------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase 4,000,000 rights (4) (4) (4)
Rights
==========================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this Registration Statement also covers an
indeterminate amount of interests to be offered pursuant to the employee benefit
plan described herein.
(2) Also registered hereby are such additional and indeterminate number of
shares of Common Stock and Preferred Stock Purchase Rights ("Rights") as may
become issuable because of changes resulting from stock dividends, stock splits
and similar changes.
(3) Estimated solely for the purpose of calculating the Registration Fee and,
pursuant to Rule 457(c) under the Securities Act, based upon the average of the
high and low sale prices of Common Stock of the Registrant on The New York Stock
Exchange on June 15, 1999 ($37.84).
(4) Rights are initially carried and traded with the Common Stock of the
Company. Value attributable to such Rights, if any, is reflected in the market
price of the Common Stock.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents heretofore filed with the Securities and
Exchange Commission (the "Commission") by R.R. Donnelley & Sons Company (the
"Company") or by the Donnelley Deferred Compensation and Voluntary Savings Plan
(the "Plan") are incorporated herein by reference:
(a) the Annual Report of the Company on Form 10-K for the year ended
December 31, 1998;
(b) the Quarterly Report of the Company on Form 10-Q for the quarter
ended March 31, 1999;
(c) the description of the Rights contained in the Company's
Registration Statement on Form 8-A filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or report filed
for the purpose of updating such description;
(d) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed under the Exchange Act, including any
amendment or report filed for the purpose of updating such description; and
(e) the Plan's latest annual report, if any, filed pursuant to
Section 13(a) 13(c), 14 or 15(d) of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act, and all documents filed by the Plan pursuant to
Section 15(d) of the Exchange Act, after the date of this Registration Statement
and prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, are deemed to be incorporated by reference into this
Registration Statement and to be a part hereof from the respective dates of
filing of such documents (such documents, and the documents enumerated above,
being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document 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
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
II-1
<PAGE>
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
Reference is made to Section 145 ("Section 145") of the General
Corporation Law of the State of Delaware (the "DGCL") which provides for
indemnification of directors and officers in certain circumstances.
The Company's Restated Certificate of Incorporation contains a
provision that is designed to limit the directors' liability to the extent
permitted by the DGCL and any amendments thereto. Specifically, directors will
not be held personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability: (i)
for a breach of the duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper dividend or improper
repurchase of the Company's stock under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit. The
principal effect of the limitation of liability provision is that a stockholder
is unable to prosecute an action for monetary damages against a director of the
Company unless the stockholder can demonstrate one of the specified bases for
liability. This provision, however, does not eliminate or limit director
liability arising in connection with causes of action brought under the federal
securities laws. While the Company's Restated Certificate of Incorporation
limits the personal liability of directors, it does not eliminate the directors'
duty of care. The inclusion of the limitation of liability provision in the
Company's Restated Certificate of Incorporation may, however, discourage or
deter stockholders or management from bringing a lawsuit against directors for a
breach of their fiduciary duties, even though such an action, if successful,
might otherwise have benefited the Company and its stockholders. This provision
should not affect the availability of equitable remedies such as injunction or
rescission based upon a director's breach of the duty of care.
The Company's By-laws also provide that the Company will indemnify its
directors and officers to the fullest extent permitted by Delaware law. The
Company is generally required to indemnify its directors and officers for all
judgments, fines, settlements, legal fees and other expenses incurred in
connection with pending or threatened legal proceedings because of the
director's or officer's position with the Company or another entity for which
the director or officer serves at the Company's request, subject to certain
conditions, and to advance funds to its directors and officers to enable them to
defend against such proceedings. To receive indemnification, the director or
officer must have been successful in the legal proceedings or acted in good
faith and in what was reasonably believed to be a lawful manner in the Company's
best interest.
II-2
<PAGE>
Pursuant to Section 145 and the Company's Restated Certificate of
Incorporation, the Company maintains directors' and officers' liability
insurance coverage which insures the Company, its subsidiaries and the elected
officers and directors of the Company and its subsidiaries, against damages,
judgments, settlements and costs incurred by reason of certain acts committed by
such persons in their capacities as officers and directors.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
4.1 Restated Certificate of Incorporation (1)
4.2 By-Laws (2)
4.3 Amendment to By-Laws adopted November 22, 1997 (2)
4.4 Rights Agreement, dated as of April 25, 1996 between R.R. Donnelley &
Sons Company and First Chicago Trust Company of New York (3)
*23 Consent of Arthur Andersen LLP
*24 Powers of Attorney (included elsewhere herein)
*99 Donnelley Deferred Compensation and Voluntary Savings Plan
______
*Filed herewith
(1) Exhibit 3(i) to Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1996 (Commission File No. 1-4694).
(2) Exhibits 3(ii)(a) and 3(ii)(b), respectively, to Annual Report on Form 10-K
for the year ended December 31, 1998 (Commission File No. 1-4694).
(3) Filed on June 5, 1996 as Exhibit 4 to Form 8-A (Commission File No. 1-4694).
The Company will submit or has submitted the Plan and any amendment
thereto to the Internal Revenue Service (the "IRS") in a timely manner and will
make or has made all changes required by the IRS in order to qualify the Plan
under Section 401 of the Internal Revenue Code of 1986, as amended.
II-3
<PAGE>
Item 9. Undertakings
------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 ("Exchange Act") that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated
II-4
<PAGE>
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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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
Securities 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 Securities
Act and will be governed by the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on this 18th day of June,
1999.
R.R. DONNELLEY & SONS COMPANY
By: /s/ Monica M. Fohrman
---------------------
Monica M. Fohrman
Secretary
POWER OF ATTORNEY
KNOW ALL PEOPLE BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Monica M. Fohrman and Cheryl A. Francis, and each
of them, his or her true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his or her substitute
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated and on the dates indicated.
Name Title Date
- ---- ----- ----
/s/ William L. Davis Chairman and Chief June 8, 1999
- ----------------------------- Executive Officer (Principal
William L. Davis Executive Officer)
/s/ Cheryl A. Francis Executive Vice President June 8, 1999
- ----------------------------- and Chief Financial Officer
Cheryl A. Francis (Principal Financial Officer)
/s/ Gregory A. Stoklosa Vice President and June 8, 1999
- ----------------------------- Controller (Principal
Gregory A. Stoklosa Accounting Officer)
/s/ Joseph B. Anderson, Jr. Director June 8, 1999
- -----------------------------
Joseph B. Anderson, Jr.
II-6
<PAGE>
/s/ Martha Layne Collins Director June 8, 1999
- ----------------------------
Martha Layne Collins
/s/ James R. Donnelley Director June 8, 1999
- -----------------------------
James R. Donnelley
/s/ Judith H. Hamilton Director June 8, 1999
- -------------------------------
Judith H. Hamilton
/s/ Thomas S. Johnson Director June 8, 1999
- ----------------------------
Thomas S. Johnson
/s/ George A. Lorch Director June 8, 1999
- -----------------------------
George A. Lorch
/s/ M. Bernard Puckett Director June 8, 1999
- ----------------------------
M. Bernard Puckett
/s/ Oliver R. Sockwell Director June 8, 1999
- ------------------------------
Oliver R. Sockwell
/s/ Bide L. Thomas Director June 8, 1999
- ------------------------------
Bide L. Thomas
/s/ Stephen M. Wolf Director June 8, 1999
- ------------------------------
Stephen M. Wolf
II-7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on June 18, 1999.
DONNELLEY DEFERRED COMPENSATION
AND VOLUNTARY SAVINGS PLAN
By: /s/ Jack J. McEnery
---------------------------
Name: Jack J. McEnery
Title: Vice President
II-8
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- ------
4.1 Restated Certificate of Incorporation (1)
4.2 By-Laws (2)
4.3 Amendment to By-Laws adopted November 22, 1997 (2)
4.4 Rights Agreement, dated as of April 25, 1996 between R.R. Donnelley &
Sons Company and First Chicago Trust Company of New York (3)
*23 Consent of Arthur Andersen LLP
*24 Powers of Attorney (included elsewhere herein)
*99 Donnelley Deferred Compensation and Voluntary Savings Plan
______
*Filed herewith
(1) Exhibit 3(i) to Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1996 (Commission File No. 1-4694).
(2) Exhibits 3(ii)(a) and 3(ii)(b), respectively, to Annual Report on Form 10-K
for the year ended December 31, 1998 (Commission File No. 1-4694).
(3) Filed on June 5, 1996 as Exhibit 4 to Form 8-A (Commission File No. 1-4694).
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our reports dated
January 28, 1999 included in R.R. Donnelley & Sons Company's Form 10-K for the
year ended December 31,1998 and to all references to our Firm included in this
Registration Statement.
/s/ Arthur Andersen LLP
-------------------------
Arthur Andersen LLP
Chicago, Illinois
June 17, 1999
<PAGE>
Exhibit 99
DONNELLEY DEFERRED COMPENSATION
AND VOLUNTARY SAVINGS PLAN
(as amended and restated effective September 1, 1997)
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - TITLE AND PURPOSE.............................................. 1
ARTICLE 2 - DEFINITIONS.................................................... 3
ARTICLE 3 - MEMBERS' VOLUNTARY SAVINGS CONTRIBUTIONS
AND ROLLOVER CONTRIBUTIONS..................................... 7
Section 3.1. Election to Contribute.................................. 7
Section 3.2. Amount of Voluntary Savings Contributions............... 8
Section 3.3. Changes in and Terminations of Voluntary
Savings Contributions................................... 8
Section 3.4. Fund B Contributions.................................... 9
Section 3.5. Rollover Contributions by Employees..................... 9
ARTICLE 4 - EMPLOYER CONTRIBUTIONS......................................... 11
Section 4.1. Deferred Compensation Contributions..................... 11
Section 4.2. Annual Limit on Deferred Compensation Contributions..... 12
Section 4.3. Matching Contributions.................................. 13
Section 4.4. Limitations on Contributions............................ 14
Section 4.5. Merger of TRASOP........................................ 15
ARTICLE 5 - STATUTORY LIMITATIONS ON BENEFITS.............................. 15
Section 5.1. Maximum Annual Additions Under
Section 415 of the Code................................. 15
Section 5.2. Limits on Contributions for Highly Compensated
Employees............................................... 18
ARTICLE 6 - TRUST.......................................................... 25
ARTICLE 7 - INVESTMENT ELECTIONS AND ALLOCATIONS
TO MEMBERS' ACCOUNTS........................................... 26
Section 7.1. Separate Accounts and Investment Allocations............ 26
Section 7.2. Allocation of Contributions and Withdrawals to
Accounts................................................ 29
Section 7.3. Allocation to Members' Accounts of Net Income of Trust
and Fluctuation in Value of Trust Assets................ 31
Section 7.4. Correction of Error..................................... 32
</TABLE>
-i-
<PAGE>
<TABLE>
Page
----
<S> <C>
ARTICLE 8 - WITHDRAWALS AND LOANS........................................... 33
Section 8.1. Withdrawals From Voluntary Savings Accounts.............. 33
Section 8.2. Withdrawals From Fund B Account.......................... 33
Section 8.3. Withdrawals From Other Accounts.......................... 34
Section 8.4. Loans.................................................... 37
Section 8.5. Periodic Distributions of Accumulated
Dividends from TRASOP Account............................ 40
ARTICLE 9 - DISTRIBUTION UPON TERMINATION OF EMPLOYMENT..................... 41
Section 9.1. Entitlement to Distribution Upon Termination of
Employment............................................... 41
Section 9.2. Form of Distribution.................................... 43
Section 9.3. Medium of Distribution................................... 45
Section 9.4. Distribution Upon Death.................................. 45
ARTICLE 10 - MISCELLANEOUS DISTRIBUTION RULES............................... 46
Section 10.1. Direct Rollover Option.................................. 46
Section 10.2. Distribution of Small Account Balances.................. 47
Section 10.3. Deferral of Distribution................................ 48
Section 10.4. Required Distributions Upon Attainment of Age 70 1/2.... 48
Section 10.5. Determination of Beneficiary............................ 48
Section 10.6. Special Rules Relating to Election of Annuity Form
of Benefit.............................................. 50
Section 10.7. Distributions to Minor and Disabled Beneficiaries....... 51
Section 10.8. Qualified Domestic Relations Orders..................... 52
ARTICLE 11 - SPECIAL PARTICIPATION RULES.................................... 53
Section 11.1. Transfers Between Employers and
Affiliates or Collective Bargaining Units............... 53
Section 11.2. Leased Employees........................................ 53
Section 11.3. Reemployment of Veterans................................ 54
ARTICLE 12 - SHAREHOLDER RIGHTS WITH RESPECT TO COMPANY
STOCK.......................................................... 55
Section 12.1. Voting Rights........................................... 55
Section 12.2. Shareholder Rights in the Event of a Tender Offer....... 56
Section 12.3. Applicability........................................... 58
Section 12.4. Confidentiality......................................... 58
ARTICLE 13 - ADMINISTRATION................................................. 59
Section 13.1. The Committee........................................... 59
Section 13.2. Claims Procedure........................................ 62
Section 13.3. Notices to Members, Etc................................. 63
</TABLE>
-ii-
<PAGE>
<TABLE>
Page
----
<S> <C>
Section 13.4. Notices to Employers or Committee...................... 63
Section 13.5. Records................................................ 64
Section 13.6. Reports of Trust Fund and Accounting to Members........ 64
ARTICLE 14 - PARTICIPATION BY OTHER EMPLOYERS.............................. 64
Section 14.1. Adoption of Plan....................................... 64
Section 14.2. Exclusion from Participation........................... 65
Section 14.3. Company as Agent for Employers......................... 65
Section 14.4. Successor Employer..................................... 65
ARTICLE 15 - MISCELLANEOUS................................................. 66
Section 15.1. Expenses............................................... 66
Section 15.2. Non-Assignability...................................... 67
Section 15.3. Employment Non-Contractual............................. 67
Section 15.4. Limitation of Rights................................... 67
Section 15.5. Merger or Consolidation with Another Plan.............. 68
Section 15.6. Gender and Plurals..................................... 68
Section 15.7. Governing Law
Section 15.8. Elections Made Through Telephone Information System.... 68
ARTICLE 16 - COMPANY ACTION................................................ 68
ARTICLE 17 - TOP-HEAVY PLAN REQUIREMENTS................................... 69
Section 17.1. Top-Heavy Plan Determination........................... 69
Section 17.2. Minimum Contribution for Top-Heavy Years............... 70
Section 17.3. Special Rules for Applying Section 415 Limits.......... 71
ARTICLE 18 - AMENDMENT, ESTABLISHMENT OF SEPARATE
PLAN AND TERMINATION.......................................... 72
Section 18.1. Amendment.............................................. 72
Section 18.2. Termination of the Plan................................ 72
Section 18.3. Trust to Be Applied Exclusively for Members and Their
Beneficiaries.......................................... 73
</TABLE>
-iii-
<PAGE>
DONNELLEY DEFERRED COMPENSATION
AND VOLUNTARY SAVINGS PLAN
(as amended and restated effective September 1, 1997)
ARTICLE I
---------
TITLE AND PURPOSE
-----------------
The title of this plan shall be the "Donnelley Deferred Compensation
and Voluntary Savings Plan." This document constitutes an amendment and
restatement of the Plan which was last restated effective January 1, 1993. This
document effects the merger of the TRASOP into this Plan effective at the close
of business on December 31, 1997. This amendment and restatement generally shall
be effective September 1, 1997, except that--
(i) any provision which specifies a different effective date shall be
effective such specified date;
(ii) Subdivision (7)(c) of Article 2 and Section 5.2 of the Plan, to
the extent such Sections reflect modifications required by the Small
Business Job Protection Act of 1996, shall be effective January 1, 1997;
(iii) Sections 8.4(b)(2) and 11.3 of the Plan, to the extent such
Sections reflect modifications required by the Uniformed Services
Employment and Reemployment Rights Act of 1994 ("USERRA"), shall be
effective December 12, 1994;
(iv) Section 5.1, to the extent such Section reflects modifications
required by the Retirement Protection Act of 1994, shall be effective
January 1, 1995; and
(v) any provision of the Plan relating to a Member's TRASOP Account
shall be effective at the close of business on December 31, 1997.
The rights and benefits of Members who terminate their employment with any
Employer (or any Affiliate thereof) on or after September 1, 1997, and the
rights and benefits of
<PAGE>
Beneficiaries of such Members, shall be determined solely by reference to the
terms of this amendment and restatement, as amended from time to time. Unless
otherwise required by applicable law, each Member who terminated employment with
all Employers and Affiliates thereof prior to September 1, 1997 shall be
entitled to receive a benefit under the terms of the prior Plan document (as
restated effective January 1, 1993, and as subsequently amended) as in effect on
the date of such termination. This Plan is designated as a "profit sharing plan"
within the meaning of section 1.401-1(a)(2)(ii) of the Regulations under which
contributions are made without regard to current or accumulated profits of any
Employer.
ARTICLE 2
---------
DEFINITIONS
-----------
As used herein, the following words and phrases shall have the
following respective meanings unless the context clearly indicates otherwise:
(1) Account. A Member's "Account" under the Plan is composed of the
Voluntary Savings Account, Fund B Account, DCS/401(k) Account, Matching
Account, Rollover Account, Merged Plan Employer Account, TRASOP Account and
Loan Account maintained for a Member under the Plan.
(2) Affiliate. An entity is an "Affiliate" of a participating
Employer if the entity--
(a) is a corporation which is a member of the same controlled
group of corporations (within the meaning of section 414(b) of the
Code) as an Employer,
(b) is a trade or business (whether or not incorporated) under
common control (within the meaning of section 414(c) of the Code) with
an Employer,
-2-
<PAGE>
(c) is any organization (whether or not incorporated) which is a
member of an affiliated service group (within the meaning of section
414(m) of the Code) which includes an Employer, a corporation
described in clause (a) of this subdivision or a trade or business
described in clause (b) of this subdivision, or
(d) is otherwise required to be aggregated with an Employer
pursuant to final Regulations promulgated under section 414(o) of the
Code.
(3) Beneficiary. A Member's "Beneficiary" is the individual or
individuals or legal entity or entities entitled under the provisions of
Section 10.5 to receive benefits in the event of the death of a Member.
(4) Code. The "Code" refers to the Internal Revenue Code of 1986, as
amended.
(5) Committee. The "Committee" is the group of individuals appointed
by the Company to administer the Plan in accordance with Section 13.1.
(6) Company. The term "Company" means R. R. Donnelley & Sons Company,
a Delaware corporation.
(7) Company Stock. "Company Stock" is common stock of the Company.
(8) Compensation. A Member's "Compensation" is the Member's
compensation which is used to determine the amount of contributions made
under the Plan by the Member or on the Member's behalf.
(a) General Rule. A Member's "Compensation" includes all payments
(upon the date paid) made by an Employer to an Employee during his
period of employment for personal services that are includible in the
Employee's gross income, including salaries, wages, commissions,
overtime and bonuses, plus amounts that would have been included in
the Employee's gross income but for the Employee's election to have
his compensation otherwise payable by an Employer reduced pursuant to
this Plan or any other qualified cash or deferred arrangement
described in section 401(k) of the Code, or to a cafeteria plan
described in section 125 of the Code. A Member's Compensation
excludes, however: (i) any stock awards (including but not limited to
stock options, stock bonuses and restricted stock); (ii) payments
under the R. R. Donnelley & Sons Company Stock Purchase Plan for
Selected Managers and Key Staff Employees (or any successor thereto);
(iii) payments under any Employees' group hospitalization, medical
expense, life or accident insurance, sick benefits, disability income,
recreational or any other similar plan or program from time to time
maintained or sponsored by an Employer; (iv) payments under any
annuity contracts; and (v) any severance payments or expense
allowances.
-3-
<PAGE>
(b) Special Rule for Certain Commissions. Notwithstanding
anything herein to the contrary, in the case of a Member who has
terminated employment, such Member's Compensation shall not include
any commissions paid after the earlier of (i) the 90th day following
the date on which his employment terminates and (ii) December 31 of
the calendar year in which his employment terminates.
(c) Code (S) 401(a)(17) Limitation. An Employee's Compensation
in excess of (i) for the Plan Year commencing January 1, 1997,
$160,000 and (ii) for each subsequent Plan Year, the amount prescribed
by section 401(a)(17) of the Code, shall not be taken into account for
any purpose under the Plan.
(9) DCS/401(k) Account. A Member's "DCS/401(k) Account" is the
account maintained for a Member to which are allocated the deferred
compensation contributions made on behalf of such Member pursuant to
Section 4.1 on a before-tax basis and any rollover contributions made by
such Member prior to April 1, 1994, plus earnings and net of any
withdrawals or losses.
(10) Effective Date. With respect to the Company and any other
Employer participating in this Plan immediately prior to September 1, 1997,
the "Effective Date" of this amended and restated Plan shall be September
1, 1997. With respect to an Employer that becomes an Employer after
September 1, 1997, the "Effective Date" with respect to such Employer shall
be the date designated by the Company.
(11) Eligible Employee. The term "Eligible Employee" includes all
Employees of all Employers, excluding only the following:
(i) Any Employee who is a member of a group or class of
Employees which is excluded from participation in this Plan, as listed
herein on Exhibit A or which is excluded pursuant to Company action.
Exhibit A shall be updated from time to time by the Company to reflect
future exclusions, but failure to do so shall not affect the
effectiveness of any such exclusion.
(ii) Any Employee who is a nonresident alien who receives no
earned income from an Employer constituting income from sources within
the United States.
(iii) Any Employee who is included in a unit of Employees which
bargains in good faith with an Employer or any representative of an
Employer, except to the extent eligibility to participate in the Plan
is required by the terms of a collective bargaining agreement entered
into by an Employer.
(iv) Any Employee who was hired through a temporary or similar
agency or company (including but not limited to any leased Employee).
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(v) Any individual who performs services for an Employer pursuant
to an agreement (written or oral) that classifies such individual as
an independent contractor, as a consultant or as an employee of
another entity, or that otherwise indicates that such individual is
not to participate in this Plan, regardless of such individual's
employment status under common law.
(12) Employee. An "Employee" is an individual whose relationship with
an Employer is, under common law, that of an employee.
(13) Employer. An "Employer" refers to the Company and any other
entity which, with the consent of the Company, elects to participate in
this Plan. The entities that are participating Employers in this Plan as of
the Effective Date are listed herein on Exhibit A. Exhibit A shall be
updated from time to time by the Company, but failure to do so shall not
affect an entity's status as an Employer.
(14) ERISA. "ERISA" refers to the Employee Retirement Income Security
Act of 1974, as amended.
(15) Fund B Account. A Member's "Fund B Account" is the frozen account
maintained for a Member to which are allocated the voluntary deductible
contributions made by such Member prior to 1986 on a before-tax basis, plus
earnings and net of any withdrawals or losses.
(16) Loan Account. A Member's "Loan Account" is the account
established pursuant to Section 8.4 with respect to a Member who takes a
loan under the Plan.
(17) Matching Account. A Member's "Matching Account" is the account
maintained for a Member to which are allocated the matching contributions,
if any, made on such Member's behalf, plus earnings and net of any
withdrawals or losses.
(18) Member. A "Member" is an Eligible Employee who has elected to
make deferred compensation contributions under the Plan as described in
Section 4.1 on a before-tax basis, voluntary savings contributions under
the Plan as described in Section 3.1 on an after-tax basis, a rollover
contribution to the Plan as described in Section 4.3, or on whose behalf a
TRASOP Account is established pursuant to Section 4.5. An Employee shall
cease to be a Member as of the date on which he receives a full and final
distribution equal to his entire Account balance.
(19) Mendota Member. A "Mendota Member" is a Member any portion of
whose Account under this Plan was transferred to this Plan from the R. R.
Donnelley Mendota, Inc. Profit Sharing Plan (formerly the Combined
Communications Services Profit Sharing Plan) as a result of the merger of a
portion of such plan into this plan generally effective as of June 30, 1994
with respect to certain employees who were not collectively bargained as of
such date, and as of such later date prescribed by the
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Company with respect to certain employees who ceased to be collectively
bargained after such date.
(20) Meredith/Burda Member. A "Meredith/Burda Member" is a Member
any portion of whose Account under this Plan was transferred to this Plan
from the Meredith/Burda Savings and Supplemental Retirement Plan, the
Meredith/Burda Savings and Supplemental Retirement Plan, Des Moines Mailers
Union Local #58, the Meredith/Burda Savings and Supplemental Retirement
Plan, DMTU Local 118 and Local 86-C, GCIU, the Meredith/Burda Savings and
Supplemental Retirement Plan, Local 71-B, GCIU, the Meredith/Burda Savings
and Supplemental Retirement Plan, SEIU #103 and IAM District 118 (Laborers
and Janitors) or the Meredith/Burda Savings and Supplemental Retirement
Plan, IAM District No. 118, Carpenters LU 106 IUOE #234-C & IBEW #347
(collectively, the "Meredith/Burda Plans"), as a result of the merger of
such Meredith/Burda Plans into this Plan effective December 31, 1991.
(21) Merged Plan Employer Account. A Member's "Merged Plan Employer
Account" is the account maintained for a Mendota Member, Metromail Member
or Meredith/Burda Member to which are credited amounts transferred to this
Plan attributable to employer profit sharing or matching contributions
under a plan, all or a portion of which was previously merged into this
Plan, plus earnings and net of any withdrawals or losses.
(22) Metromail Member. A "Metromail Member" is a Member any portion
of whose Account under this Plan was transferred to this Plan from the
Metromail Corporation Profit Sharing-Savings Plan as a result of the merger
of such plan into this Plan effective December 31, 1991.
(23) Plan. The term "Plan" refers to the Donnelley Deferred
Compensation and Voluntary Savings Plan as herein set forth, as amended
from time to time.
(24) Plan Year. The "Plan Year" is the calendar year.
(25) Regulations. The term "Regulations" refers to regulations
issued by the Department of Labor construing Title I of ERISA or by the
Internal Revenue Service construing the Code.
(26) Rollover Account. A Member's "Rollover Account" is the account
maintained for a Member to which are allocated the rollover contributions
made by the Member pursuant to Section 3.5 on or after April 1, 1994, plus
earnings and net of any withdrawals or losses.
(27) TRASOP. The "TRASOP" is the Donnelley Tax Credit Stock
Ownership Plan, as in effect prior to its merger into this Plan pursuant to
Section 4.5
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(28) TRASOP Account. A Member's "TRASOP Account" is the frozen
account maintained for a Member to which is credited the Member's account
balance under the TRASOP which is transferred to this Plan as described in
Section 4.5, plus earnings and net of any withdrawals or losses.
(29) Trust. The "Trust" is the trust established pursuant to the
agreement entered into between the Employers and the Trustee for holding,
administering and distributing the Trust Fund, as amended from time to
time.
(30) Trust Fund. The "Trust Fund" is the fund arising from
contributions made in accordance with the provisions of the Plan and held
by the Trustee pursuant to the Trust, net of any withdrawals, including
earnings and losses thereon.
(31) Trustee. The "Trustee" is the person, corporation, association
or a combination of them who shall act as trustee of the Trust and any
successors and substitutes thereto.
(32) Valuation Date. A "Valuation Date" is any day on which the New
York Stock Exchange is open.
(33) Voluntary Savings Account. A Member's "Voluntary Savings
Account" is the account maintained for a Member to which are credited the
voluntary savings contributions made by such Member pursuant to Section 3.1
on an after-tax basis, plus earnings and net of any withdrawals or losses.
ARTICLE 3
---------
MEMBERS' VOLUNTARY SAVINGS CONTRIBUTIONS
----------------------------------------
AND ROLLOVER CONTRIBUTIONS
--------------------------
Section 3.1. Election to Contribute. Subject to Article 5, each
Eligible Employee may elect to make voluntary savings contributions under the
Plan on an after-tax basis. Any such election shall be made by filing a written
application with the Eligible Employee's Employer, or by enrolling through such
electronic means as the Committee may prescribe. Except as otherwise prescribed
by the Committee, if such election is made on or
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prior to the 20th day of the calendar month, such election shall be effective as
of the first pay period commencing on or after the first day of the next
calendar month, and an election made thereafter shall be effective as of the
first pay period commencing on or after the first day of the following calendar
month. The Committee shall prescribe uniform rules to govern the time at which
such elections must be made. The Member's election shall authorize the Member's
Employer to deduct voluntary savings contributions from the Member's
Compensation in the amount specified by the Member according to the provisions
of Section 3.2. An Eligible Employee who is not otherwise a Member in the Plan
shall become a Member upon making an election to make voluntary savings
contributions as described herein.
Section 3.2. Amount of Voluntary Savings Contributions. A Member's
voluntary savings contribution shall be designated by the Member as a whole
number percentage not less than l% nor more than 10% of his Compensation per pay
period. Voluntary savings contributions shall be effected by payroll deductions
made each pay period, on an after-tax basis.
Section 3.3. Changes in and Terminations of Voluntary Savings
Contributions. The voluntary savings contribution election designated by a
Member shall continue in effect until the Member shall change or terminate such
election (or until the date the Member terminates employment with his Employer).
Except as otherwise prescribed by the Committee, if an election to change or
terminate the Member's voluntary savings contributions is made on or prior to
the 20th day of the calendar month, such election shall be effective as of
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the first pay period commencing on or after the first day of the next calendar
month, and an election made thereafter shall be effective as of the first pay
period commencing on or after the first day of the following calendar month. The
Committee shall prescribe uniform rules to govern the time at which such
elections must be made.
Section 3.4. Fund B Contributions. Prior to 1987, each Member for
whom a Voluntary Savings Account was maintained was entitled to elect, effective
as of December 31 of each calendar year, to have all or a portion of the amount
credited to his Voluntary Savings Account, but not more than $2,000, transferred
to his Fund B Account. No such elections are allowed after 1986.
Section 3.5. Rollover Contributions by Employees. (a) Rollover from
Employer Plan. If an Eligible Employee receives, either before or after
becoming an Employee, an eligible rollover distribution (within the meaning of
section 402(c)(4) of the Code) from this Plan, from another employees' trust
described in section 401(a) of the Code which is exempt from tax under section
501(a) of the Code, or from a qualified annuity plan described in section 403(a)
of the Code, then such Eligible Employee may contribute to the Plan an amount
which does not exceed the amount of such eligible rollover distribution
(including the proceeds from the sale of any property received as part of such
eligible rollover distribution) in the form of a before-tax rollover
contribution.
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(b) Rollover from Conduit IRA. If an Eligible Employee receives,
either before or after becoming an Employee, a distribution or distributions
from an individual retirement account or individual retirement annuity (within
the meaning of section 408 of the Code) and the amount received represents the
entire amount in such account or the entire value of such annuity and no amount
in such account or no value of such annuity is attributable to a source other
than an eligible rollover distribution (within the meaning of section 402(c)(4)
of the Code) from this Plan, from another employees' trust described in section
401(a) of the Code which is exempt from tax under section 501(a) of the Code, or
an annuity plan described in section 403(a) of the Code, then such Employee may
contribute to the Plan such distribution in the form of a before-tax rollover
contribution.
(c) Delivery of Rollover Contribution to Committee and to Trustee.
Any rollover contribution pursuant to this Section shall be delivered by the
Eligible Employee to the Committee on or before the 60th day after the day on
which the Eligible Employee receives the distribution (or on or before such
other date as may be prescribed by law). The Committee shall deposit such
rollover contribution with the Trustee. The Committee need not accept a
rollover contribution if in its judgment accepting such contribution would cause
the Plan to violate any provision of the Code or Regulations. An Eligible
Employee who is not otherwise a Member in the Plan shall become a Member upon
delivery of a rollover contribution to the Committee as described herein.
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ARTICLE 4
---------
EMPLOYER CONTRIBUTIONS
----------------------
Section 4.1. Deferred Compensation Contributions. An Eligible
Employee may elect, in the same manner and within the same time periods set
forth in Section 3.1, to have deferred compensation contributions made on the
Eligible Employee's behalf on a before-tax basis. An Eligible Employee who is
not otherwise a Member in the Plan shall become a Member upon making an election
to have such deferred compensation contributions made on his behalf as described
herein.
Subject to the limitations set forth in Section 4.2, 4.4 and Article
5, each Employer shall contribute for each pay period on behalf of each of its
Members who has made an election to have deferred compensation contributions
made on his behalf a whole percentage not less than 1% nor more than 10% of the
Member's Compensation per pay period, as designated in such election; provided,
however, that, effective for pay periods commencing on or after January 1, 1998,
a Member may designate a whole percentage of not less than 1% nor more than 15%
of the Member's Compensation in such election. Notwithstanding the foregoing,
the Committee may prescribe a lower percentage for Members who are highly
compensated employees (as defined in Section 5.2) in order to satisfy the
discrimination tests set forth in Section 5.2. The amount of the Member's
Compensation otherwise payable for the period for which each such contribution
is made shall be reduced by the amount of such contribution by means of a
payroll deduction each pay period.
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Changes in and termination of such contributions shall be made at the
same time and manner as prescribed for voluntary savings contributions in
Section 3.3.
Section 4.2. Annual Limit on Deferred Compensation Contributions. (a)
General Rule. Notwithstanding the provisions of Section 4.1, a Member's
deferred compensation contributions made pursuant to Section 4.1 for any
calendar year shall not exceed (i) for the Plan Year commencing January 1, 1997,
$9,500 or (ii) for each subsequent Plan Year, the dollar limit prescribed by
section 402(g) of the Code (as adjusted for increases in the cost-of-living in
accordance with section 402(g)(5) of the Code).
(b) Distribution of Excess Deferred Compensation Contributions. With
respect to any Member, if for any calendar year the deferred compensation
contributions to this Plan or the aggregate of deferred compensation
contributions to this Plan plus amounts contributed under other plans or
arrangements described in sections 401(k), 403(b), 408(k) or 408(p) of the Code
will exceed the limit imposed by subsection (a) of this Section for the calendar
year in which such contributions were made ("excess deferred compensation
contributions"), such Member shall, pursuant to such rules and at such time
following such calendar year as determined by the Committee, be allowed to
submit a written request that the excess deferred compensation contributions,
plus any income and minus any loss allocable thereto, be distributed to him.
The amount of any income or loss allocable to such excess deferred compensation
contributions shall be determined pursuant to Treasury Regulation (S) 1.401(k)-
1(f)(4)(ii)(C) and (D). Such adjusted amount of excess deferred compensation
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contributions shall be distributed to the Member no later than April 15
following the calendar year for which such contributions were made.
Notwithstanding the provisions of this paragraph, any such excess deferred
compensation contributions shall be treated as "annual additions" for purposes
of Section 5.1.
Section 4.3. Matching Contributions. (a) In General. To the extent
provided by Supplement Number One to the Plan, and subject to the limitations of
Section 4.4 and Article 5, the Company shall make on behalf of Members who have
elected to make deferred compensation contributions pursuant to Section 4.1,
matching contributions in the amount, if any, prescribed by such Supplement.
Such Supplement shall set forth the terms and conditions under which a Member is
eligible for an allocation of matching contributions under the Plan and shall
specify whether such contributions are to be made in the form of cash, in the
form of shares of Company Stock, or in any combination thereof. A Member
entitled to matching contributions under subsection (b) below shall not be
entitled to matching contributions under this subsection.
(b) Wheeling and Seymour Employees. Subject to the limitations of
Section 4.4 and Article 5, the Company shall make matching contributions on
behalf of Members who are Employees of its Wheeling Division, and effective
January 1, 1998, R. R. Donnelley Seymour, Inc. shall make matching contributions
on behalf of Members who are its Employees, in an amount equal to 25% of each
such Member's deferred compensation contributions made pursuant to Section 4.1
of the Plan, disregarding any such deferred
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compensation contributions in excess of 6% of such Member's monthly
Compensation; provided, however, that no such Member who is a "Member" under the
Retirement Benefit Plan of R. R. Donnelley & Sons Company and who accrues a
benefit under such plan for a Plan Year shall be entitled to matching
contributions under this subsection for such Plan Year.
Section 4.4. Limitations on Contributions. (a) Deductibility.
Notwithstanding anything contained in the Plan to the contrary, an Employer's
contributions to the Plan under Sections 4.1 and 4.3 for any Plan Year shall not
exceed the maximum amount for which a deduction is allowable to such Employer
for federal income tax purposes on account of such contributions for the fiscal
year of the Employer which ends with or within such Plan Year. Any contribution
which is determined by the Internal Revenue Service to be nondeductible by an
Employer shall be returned to such Employer within one year following the date
on which such deduction is disallowed.
(b) Mistake of Fact. Any contribution made by an Employer by reason
of a good faith mistake of fact shall, upon the request of such Employer, be
returned by the Trustee to such Employer. The Employer's request and the return
of any such contribution must be made within one year after such contribution
was mistakenly made. The amount to be returned to the Employer pursuant to this
paragraph shall be the excess of the amount contributed over the amount which
would have been contributed had there not been a mistake of fact. If the return
to the Employer of the amount attributable to the mistaken contribution would
cause the amount credited to any Member's Account as of the date such amount is
to be
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returned (as if such date were a Valuation Date) to be reduced to less
than what would have been the amount credited to such Account as of such date
had the mistaken amount not been contributed, the amount to be returned to the
Employer shall be limited so as to avoid such a reduction.
Section 4.5. Merger of TRASOP. Effective at the close of business on
December 31, 1997, the TRASOP shall be merged into this Plan. The account
balance of each individual under the TRASOP shall be transferred to a separate
TRASOP Account established on the individual's behalf under this Plan as of such
date. An individual on whose behalf such a transfer occurs who is not otherwise
a Member under this Plan shall become a Member of the Plan upon establishment of
a TRASOP Account on his behalf.
ARTICLE 5
---------
STATUTORY LIMITATIONS
ON BENEFITS
-----------
Section 5.1. Maximum Annual Additions Under Section 415 of the Code.
Notwithstanding any other provision of the Plan, the amounts allocated to the
Accounts of each Member for any Plan Year shall be limited so that--
(i) the aggregate annual additions for such Plan Year to the Member's
Account in this Plan and in all other defined contribution plans in which
he is a participant shall not exceed the lesser of
(I) $30,000 (as adjusted for increases in the cost-of-living
pursuant to section 415(d) of the Code) and
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(II) 25% of the Member's compensation (as defined below) for such
Plan Year, and
(ii) for Plan Years commencing prior to January 1, 2000, the sum of
(A) and (B) below shall not exceed 1.
(A) The annual additions to the Member's Accounts in the Plan
and the aggregate annual additions to the eligible Employee's Accounts
in all other defined contribution plans maintained by his Employer
(determined as of the close of the Plan Year) divided by the sum of
the lesser of--
(I) 125% of the maximum dollar amount which under section
415(c)(1)(A) of the Code could have been contributed on behalf of
the Member to a defined contribution plan, and
(II) 35% of the Member's annual compensation,
as determined separately for each of the Member's years of service.
(B) The aggregate projected annual benefit of the Member under
all defined benefit plans maintained by his Employer (determined as of the
close of the Plan Year), divided by the lesser of--
(I) 125% of the maximum dollar limitation contained in
section 415(b)(1)(A) of the Code as adjusted for increases in the cost
of living as set forth in Regulations, and
(II) 140% of the average of the Member's compensation for
the three consecutive calendar years during which his compensation was
the highest.
If as a result of a reasonable error in estimating a Member's annual
compensation, a reasonable error in determining the amount of elective deferrals
that may be made by a Member under section 415 of the Code or under other
limited facts and circumstances as determined by the Commissioner of Internal
Revenue, the annual additions to a Member's Account exceeds the limitations set
forth in clause (i) above for any Plan Year, the amounts that would otherwise be
allocated to such Member's Account for such Plan Year under any
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other defined contribution plans maintained by an Employer shall be reduced
until the amount to be allocated to the Member's Account under the Plan is not
so limited or until the amounts allocated under all such other plans have been
reduced to zero, whichever occurs first. If after such reduction has been made
the amount to be allocated to a Member's Account under the Plan for such year
would exceed the limitations set forth in this Section, then the Company shall
reduce the amounts to be allocated to such Member's Account for such year to the
extent of the excess in the manner described below:
(a) first, by reducing the Member's voluntary savings contributions
allocated to his Account and distributing to the Member the amount by which
his voluntary savings contributions have been reduced (not including
earnings on such voluntary savings contributions);
(b) second, by distributing to the Member the earnings on excess
voluntary savings contributions allocated to his Account; and
(c) third, by reducing the amount of the Member's deferred
compensation contributions and corresponding matching contributions (if
any) allocated to his Account, plus earnings on such contributions, and
distributing to the Member the amount by which his deferred compensation
contributions and corresponding matching contributions (if any) have been
reduced and earnings on such contributions.
If the combined annual benefit payable to a Member would exceed the
limitation of paragraph (ii)(B) above, then the benefit payable under the
defined benefit plan shall be reduced in order to meet such limitation in the
manner provided in such defined benefit plan.
The "annual additions" for a Plan Year to a Member's Accounts in this
Plan and in any other defined contribution plan is the sum during such Plan Year
of--
(i) the amount of Employer contributions allocated to such Member's
accounts,
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(ii) the amount of forfeitures allocated to such Member's accounts,
(iii) the amount allocated to any individual medical benefit account
(as defined in section 415(l) of the Code) maintained on behalf of the
Member, and
(iv) the amount of contributions by the Member to such Plan but
excluding any rollover contribution made to such Plan.
For purposes of this Section, the "limitation year" shall be the Plan
Year, the terms "defined contribution plan," "defined benefit plan" and "year of
service" shall have the meanings set forth in section 415 of the Code and the
Regulations promulgated thereunder, and a Member's Employer shall include
entities that are members of the same controlled group (within the meaning of
section 414(b) of the Code as modified by section 415(h) of the Code) or
affiliated service group (within the meaning of section 414(m) of the Code) as
his Employer or under common control (within the meaning of section 414(c) of
the Code as modified by section 415(h) of the Code) with his Employer or such
entities. The term "compensation" shall have the meaning set forth in Treasury
Regulation (S) 1.415-2(d)(11)(i), including, for limitation years beginning on
or after January 1, 1998, the amounts described in section 415(c)(3)(D) of the
Code.
Section 5.2. Limits on Contributions for Highly Compensated
Employees. (a) Actual Deferral Percentage Test Imposed by Section 401(k)(3) of
the Code. Notwithstanding the provisions of Section 4.1, if the deferred
compensation contributions made pursuant to such Section for a Plan Year fail to
satisfy both of the tests set forth in paragraphs (1) and (2) of this
subsection, the adjustments prescribed in paragraph (1) of subsection (e) of
this Section shall be made.
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(1) The HCE average deferral percentage does not exceed the product
of the NHCE average deferral percentage multiplied by 1.25.
(2) The HCE average deferral percentage (i) does not exceed the NHCE
average deferral percentage by more than two percentage points, and (ii)
does not exceed two times the NHCE average deferral percentage.
(b) Limits Imposed by Section 401(m) of the Code. Notwithstanding
the provisions of Sections 3.1 and 4.3, if the aggregate of the voluntary
savings contributions and matching contributions pursuant to Sections 3.1 and
4.3, respectively, fail to satisfy both of the tests set forth in paragraphs (1)
and (2) of this subsection, the adjustments prescribed in paragraph (2) of
subsection (e) of this Section shall be made.
(1) The HCE average contribution percentage does not exceed the
product of the NHCE average contribution percentage multiplied by 1.25.
(2) The HCE average contribution percentage (i) does not exceed the
NHCE average contribution percentage by more than two percentage points,
and (ii) does not exceed two times the NHCE average contribution
percentage.
(c) Aggregate Limit on Contributions. Notwithstanding anything
herein to the contrary, if the sum of the HCE average deferral percentage (as
determined under paragraph (1) of subsection (e) of this Section after making
the adjustments required by such paragraph for the Plan Year) and the HCE
average contribution percentage (as determined under paragraph (2) of subsection
(e) of this Section after making the adjustments required by such paragraph for
the Plan Year) exceeds, or in the judgment of the Company is likely to exceed,
the aggregate limit for such Plan Year, the adjustments prescribed in paragraph
(3) of subsection (e) of this Section shall be made.
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(d) Definitions and Special Rules. For purposes of this Section, the
following definitions and special rules shall apply:
(1) The "actual deferral percentage test" refers collectively to the
tests set forth in paragraphs (1) and (2) of subsection (a) of this Section
relating to deferred compensation contributions. The actual deferral
percentage test shall be satisfied if either of such tests are satisfied.
(2) The "HCE average deferral percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who are eligible
to make deferred compensation contributions for such Plan Year and who are
highly compensated employees for such Plan Year. Such percentage shall be
equal to the average of the ratios, calculated separately for each such
Eligible Employee to the nearest one-hundredth of one percent, of the
deferred compensation contributions for the benefit of such Eligible
Employee for such Plan Year (if any) to the total compensation for such
Plan Year paid to such Employee.
(3) The "NHCE average deferral percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who were eligible
to make deferred compensation contributions for the prior Plan Year and who
were not highly compensated employees for such prior Plan Year. Such
percentage shall be equal to the average of the ratios, calculated
separately for each such Eligible Employee to the nearest one-hundredth of
one percent, of the deferred compensation contributions for the benefit of
such Eligible Employee for such prior Plan Year (if any) to the total
compensation for such prior Plan Year paid to such Eligible Employee.
(4) The "actual contribution percentage test" refers collectively to
the tests set forth in paragraphs (1) and (2) of subsection (b) of this
Section relating to voluntary savings contributions and matching
contributions. The actual contribution percentage test shall be satisfied
if either of such tests are satisfied.
(5) The "HCE average contribution percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who are eligible
to make voluntary savings contributions for such Plan Year, or are eligible
to make deferred compensation contributions and share in an allocation of
corresponding matching contributions (if any) for such Plan Year, and who
are highly compensated employees for such Plan Year. Such percentage shall
be equal to the average of the ratios, calculated separately for each such
Employee to the nearest one-hundredth of one percent, of the sum of the
voluntary savings contributions made by such Eligible Employee for such
Plan Year (if any) and the matching contributions made for the benefit of
such Eligible Employee (if any) for such Plan Year and, in the Company's
sole discretion, to the extent permitted by Regulations, some or all of the
deferred compensation contributions made during
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such Plan Year for the benefit of such Eligible Employee (if any), to the
total compensation for such Plan Year paid to such Eligible Employee.
(6) The "NHCE average contribution percentage" for a Plan Year is a
percentage determined for the group of Eligible Employees who were eligible
to make voluntary savings contributions for the prior Plan Year, or were
eligible to make deferred compensation contributions and share in an
allocation of corresponding matching contributions (if any) for the prior
Plan Year, and who were not highly compensated employees for such prior
Plan Year. Such percentage shall be equal to the average of the ratios,
calculated separately for each such Eligible Employee to the nearest one-
hundredth of one percent, of the sum of the voluntary savings contributions
made by such Eligible Employee for such prior Plan Year (if any) and the
matching contributions made for the benefit of such Eligible Employee for
such prior Plan Year (if any) and, in the Company's sole discretion, to the
extent permitted by Regulations, some or all of the deferred compensation
contributions made during such prior Plan Year for the benefit of such
Eligible Employee (if any), to the total compensation for such prior Plan
Year paid to such Eligible Employee.
(7) The "aggregate limit" shall equal the greater of (A) the sum of
(i) 1.25 times the greater of the NHCE average deferral percentage or the
NHCE average contribution percentage plus (ii) the lesser of (a) the sum of
two percentage points and the lesser of the NHCE average deferral
percentage or the NHCE average contribution percentage and (b) 200% of the
lesser of the NHCE average deferral percentage or the NHCE average
contribution percentage; or (B) the sum of (i) 1.25 times the lesser of the
NHCE average deferral percentage or the NHCE average contribution
percentage plus (ii) two percentage points plus the greater of (a) the NHCE
average deferral percentage or (b) the NHCE average contribution
percentage, but not greater than 200% of the greater of (a) and (b) above.
(8) A "highly compensated employee" is, for a Plan Year, any Employee
who is (a) a 5%-owner (as determined under section 416(i) of the Code) at
any time during the Plan Year or the preceding Plan Year or (b) is paid
compensation in excess of $80,000 (as adjusted for increases in the cost of
living in accordance with section 414(q)(1)(B)(ii) of the Code) from an
Employer for the prior Plan Year. If the Committee so elects for a Plan
Year, the Employees taken into account under clause (b) above shall be
limited to those Employees who were members of the "top-paid group" (as
defined in section 414(q)(3) of the Code) for the preceding Plan Year. Any
such election shall be included in the written minutes of the Committee.
(9) The term "compensation" shall have the meaning set forth in
section 414(s) of the Code or, in the discretion of the Company, any other
meaning in accordance with the Code for these purposes.
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(10) If the Plan and one or more other plans of the Employer to which
elective deferrals or qualified nonelective contributions (as such term is
defined in section 401(m)(4)(C) of the Code) are made are treated as one
plan for purposes of section 410(b) of the Code, such plans shall be
treated as one plan for purposes of this Section.
(e) Adjustments to Comply with Limits. This subsection sets forth
the adjustments and correction methods which shall be used to comply with the
actual deferral percentage test under section 401(k)(3) of the Code, and the
actual contribution percentage test under section 401(m) of the Code.
(1) Adjustments to Comply with Actual Deferral Percentage Test.
(A) Adjustment to Deferred Compensation Contributions of Highly Compensated
Employees. The Company shall cause to be made such periodic computations
as it shall deem necessary or appropriate to determine whether the actual
deferral percentage test is satisfied during a Plan Year, and, if it
appears to the Company that such test will not be satisfied, the Company
shall take such steps as it deems necessary or appropriate to adjust the
deferred compensation contributions made pursuant to Section 4.1 for all or
a portion of such Plan Year on behalf of each Member who is a highly
compensated employee to the extent necessary in order for the actual
deferral percentage test to be satisfied. If, as of the end of the Plan
Year, the Company determines that, notwithstanding any adjustments made
pursuant to the preceding sentence, the actual deferral percentage test was
not satisfied, the Company shall calculate a total amount by which deferred
compensation contributions must be reduced in order to satisfy either such
test, in the manner prescribed by section 401(k)(8)(B) of the Code (the
"excess contributions amount"). The amount to be returned to each Member
who is a highly compensated employee shall be determined by first reducing
the deferred compensation contributions of each Member whose actual dollar
amount of deferred compensation contributions for such Plan Year is highest
until such reduced dollar amount equals the next highest actual dollar
amount of deferred compensation contributions made for such Plan Year on
behalf of any highly compensated employee, or until the total reduction
equals the excess contributions amount. If further reductions are
necessary, then the deferred compensation contributions on behalf of each
Member who is a highly compensated employee and whose actual dollar amount
of deferred compensation contributions made for such Plan Year is the
highest (determined after the reduction described in the preceding
sentence) shall be reduced in accordance with the preceding sentence. Such
reductions shall continue to be made to the extent necessary so that the
total reduction equals the excess contributions amount.
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(B) Corrective Distributions. No later than 2 1/2 months after
the end of the Plan Year (or if correction by such date is administratively
impracticable, no later than the last day of the subsequent Plan Year), the
Company shall cause to be distributed to each affected Member (i) the
amount of deferred compensation contributions to be returned to such Member
pursuant to subparagraph (A) above, plus any income and minus any loss
allocable thereto, and (ii) any corresponding matching contributions
related thereto, plus any income and minus any loss allocable thereto. The
amount of any income or loss allocable to any such reductions to be so
distributed, including income or loss attributable to the gap period (as
defined in Regulations), shall be determined pursuant to applicable
Regulations. The amount of deferred compensation contributions to be
distributed to a Member hereunder shall be reduced by any excess deferred
compensation contributions previously distributed to such Member pursuant
to Section 4.2 in order to comply with the limitations of section 402(g) of
the Code. The unadjusted amount of any such reductions so distributed
shall be treated as "annual additions" for purposes of Section 5.1 relating
to the limitations under section 415 of the Code.
(2) Adjustments to Comply with Actual Contribution Percentage
Test. (A) Adjustment to Voluntary Savings and Matching Contributions of
Highly Compensated Employees. If, as of the end of the Plan Year, after
taking into account the distribution of matching contributions made on
behalf of highly compensated employees pursuant to subparagraph (1)(B)
above, the Company determines that the actual contribution percentage test
was not satisfied, the Company shall calculate a total amount by which
voluntary savings contributions made pursuant to Section 3.1 and matching
contributions made pursuant to Section 4.3 must be reduced in order to
satisfy such test, in the manner prescribed by section 401(m)(6)(B) of the
Code (the "excess aggregate contributions amount"). The amount to be
reduced with respect to each Member who is a highly compensated employee
shall be determined by first reducing the voluntary savings contributions
and matching contributions for each Member whose actual dollar amount of
voluntary savings contributions and matching contributions for such Plan
Year is highest until the such reduced dollar amount equals the next
highest actual dollar amount of voluntary savings contributions and
matching contributions made for such Plan Year on behalf of any highly
compensated employee, or until the total reduction equals the excess
aggregate contributions amount. If further reductions are necessary, then
such voluntary savings contributions matching contributions on behalf of
each Member who is a highly compensated employee and whose actual dollar
amount of voluntary savings contributions and matching contributions made
for such Plan Year is the highest (determined after the reduction described
in the preceding sentence) shall be reduced in accordance with the
preceding sentence. Such reductions shall continue to be made to the
extent necessary so that the total reduction equals the excess aggregate
contributions amount. Any reduction prescribed by this subparagraph shall
be applied to a Member's voluntary savings contributions first, and shall
be applied to his matching contributions only after reduction of his
voluntary savings contributions for such Plan Year to zero.
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(B) Corrective Distributions. No later than 2 1/2 months after
the end of the Plan Year (or if correction by such date is administratively
impracticable, no later than the last day of the subsequent Plan Year), the
Company shall cause to be distributed to each affected Member the amount of
voluntary savings contributions and matching contributions to be reduced
with respect to such Member pursuant to subparagraph (A) above, plus any
income and minus any loss allocable thereto. The amount of any income or
loss allocable to any such reductions to be so distributed, including
income or loss attributable to the gap period (as defined in Regulations),
shall be determined pursuant to applicable Regulations. The unadjusted
amount of any such reductions so distributed shall be treated as "annual
additions" for purposes of Section 5.1 relating to the limitations under
section 415 of the Code.
(3) Adjustments to Comply with the Aggregate Limit. If, after
making the adjustments required by paragraphs (1) and (2) of this
subsection for a Plan Year, the Company determines that the sum of the HCE
average deferral percentage and the HCE average contribution percentage
exceeds the aggregate limit for such Plan Year, the Company shall within 2
1/2 months after the close of such Plan Year (or if correction by such date
is administratively impracticable, no later than the last day of the
subsequent Plan Year) adjust the voluntary savings contributions made
pursuant to Section 3.1 for such Plan Year by each Member who is a highly
compensated employee to the extent necessary to eliminate such excess.
Such adjustment shall be effected in the same manner described in paragraph
(2) of this subsection relating to reductions made to satisfy the actual
contribution percentage test. For purposes of the preceding sentence, the
HCE average deferral percentage and HCE average contribution percentage
shall be equal to the highest deferral percentage and contribution
percentage permissible in determining the excess contributions amount under
section 401(k)(8)(B) of the Code pursuant to paragraph (1) above, and the
excess aggregate contributions amount under section 401(m)(6)(B) of the
Code pursuant to paragraph (2) above, respectively. In the event that
further reductions are necessary the Company shall adjust the deferred
compensation contributions made pursuant to Section 4.1 for such Plan Year
on behalf of each Member who is a highly compensated employee to the extent
necessary to eliminate such excess. Such adjustment shall be effected in
the same manner described in paragraph (1) of this subsection relating to
reductions made to satisfy the actual deferral percentage test. In the
event that further reductions are necessary, the Company shall adjust the
matching contributions made pursuant to Section 4.3 for such Plan Year on
behalf of each Member who is a highly compensated employee to the extent
necessary to eliminate such excess. Such adjustment shall be effected in
the same manner described in paragraph (2) of this subsection relating to
reductions made to satisfy the actual contribution percentage test.
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(f) Designation of Qualified Nonelective Contributions. Each Plan
Year, the Company may require some or all of the Employers to make, to the
extent permitted by Regulations, additional contributions which shall be treated
as "qualified nonelective contributions" within the meaning of Section
401(m)(4)(C) of the Code, for purposes of applying the actual deferral
percentage test or the actual contribution percentage test or both. Such
contributions shall be allocated to some or all of the Members who are not
highly compensated employees, in the manner prescribed by the Company. Any such
Employer contributions designated as qualified nonelective contributions and
earnings related thereto shall be accounted for separately by the Trustee and
shall be distributable pursuant to the provisions of the Plan concerning
distributions of matching contributions (but no earlier than the Member's
separation from service or death).
ARTICLE 6
---------
TRUST
-----
A Trust shall be created by the execution of a trust agreement between
the Employers and the Trustee. All Employee and Employer contributions under
the Plan shall be made to the Trustee. The Trustee shall hold all property
received by it and invest the income and allocate the losses from all property
held by it on behalf of the Members collectively in accordance with the
provisions of the Plan and the trust agreement. The Trustee shall make
distributions from the Trust Fund at such time or times to such person or
persons (or such
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qualified plans or individual retirement accounts) and in such amounts as the
Committee shall direct in accordance with the Plan.
ARTICLE 7
---------
INVESTMENT ELECTIONS AND
ALLOCATIONS TO MEMBERS' ACCOUNTS
--------------------------------
Section 7.1. Separate Accounts and Investment Elections. (a)
Separate Accounts. The Company shall establish and maintain, or cause the
Trustee or such other agent as the Company may select to establish and maintain,
a separate Account for each Member. Such Accounts shall be solely for accounting
purposes, and no segregation of assets of the Trust among the separate Accounts
shall be required. Each Account shall consist of (a) if a Member is making or
has made voluntary savings contributions, a Voluntary Savings Account, (b) if
deferred compensation contributions are being made or have been made for a
Member, a DCS/401(k) Account, (c) if matching contributions are being made or
have been made for a Member, a Matching Account, (d) for each Member who elected
to make voluntary deductible contributions to the Plan prior to 1986, a Fund B
Account, (e) if a Member has made a rollover contribution on or after April 1,
1994, a Rollover Account, (f) if the Member is a Mendota Member, a
Meredith/Burda Member or a Metromail Member, a Merged Plan Employer Account and
(g) if an amount is transferred to this Plan from the TRASOP on the Member's
behalf, a TRASOP Account.
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The Company shall establish and maintain, or shall cause to be
established and maintained, investment funds, the type and number of such funds
to be determined by the Company, to which all amounts contributed under the Plan
shall be credited according to each Member's investment elections pursuant to
subsections (b) and (c) of this Section. The Company shall establish and
maintain, or cause the Trustee or such other agent as the Company may select to
establish and maintain, investment subaccounts with respect to each such
investment fund to which amounts contributed under the Plan shall be credited
according to each Member's investment elections pursuant to subsections (b) and
(c) of this Section. All such subaccounts shall be for accounting purposes
only, and there shall be no segregation of assets within the investment funds
among the separate subaccounts.
(b) Investment Elections. Except as provided in subsection (d)
below, each Member shall make an election which shall apply to future
contributions which will be made to such Member's Account pursuant to Sections
3.1, 3.5, 4.1 and 4.3 and to the loan payments made pursuant to Section 8.4, and
may make an additional investment election which shall apply to the investment
of his Plan Account balance and any earnings thereon. Such election shall
specify that such contributions be invested either (i) wholly in one fund
maintained pursuant to subsection (a) or (ii) divided among such funds in
minimum increments established by the Committee from time to time. During any
period in which no direction as to the investment of a Member's Account is on
file with the Committee, contributions made by him or on his behalf to the Plan
shall be invested in the Income Fund (or in such other investment fund
designated by the Company from time to time for this purpose).
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(c) Change of Investment Election. (1) Investment of Existing
Account Balances. With respect to the allocation of the Member's existing
Account balances among the available investment funds, a Member may elect to
change his investment election effective as of any Valuation Date. The
Committee may prescribe uniform rules which shall govern the time by which any
such election shall be made in order to be effective as of a Valuation Date.
(2) Investment of Future Contributions. With respect to the
investment of future contributions to be deposited with the Trustee and
allocated to a Member's Account, the Member may make an election as of any date
regarding the manner in which such contributions shall be invested among the
available investment funds. If the Member has made more than one investment
election with respect to any amount of contributions to be deposited with the
Trustee, the last such election as of the date of such deposit shall control.
(d) Special Rule for TRASOP Account and Matching Account.
Notwithstanding subsections (b) and (c) above, a Member's TRASOP Account shall
be invested primarily in shares of Company Stock. To the extent provided by
Supplement Number One to the Plan, all or a portion of a Member's Matching
Account shall be invested primarily in shares of Company Stock. A Member shall
not be permitted to provide any investment directions with respect to the
balance of his TRASOP Account or the balance of his Matching Account that is
invested primarily in shares of Company Stock. Any cash dividends paid with
respect to shares of Company Stock credited to a Member's TRASOP Account shall
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be held uninvested in such account, until such accumulated dividends are
distributed in accordance with Section 8.5. Any cash dividends paid with
respect to shares of Company Stock credited to a Member's Matching Account shall
be invested in the manner prescribed by the Company, in accordance with
Supplement Number One to the Plan.
(e) Applicability. For purposes of this Section, the term "Member"
shall include any Beneficiary of a deceased Member and any alternate payee under
a qualified domestic relations order on whose behalf an Account has been
established under this Plan.
Section 7.2. Allocation of Contributions and Withdrawals to Accounts.
(a) Allocation of Deferred Compensation Contributions. Twice per calendar
month (or at such other frequency prescribed by the Committee), the Committee
shall deposit the deferred compensation contributions made via payroll reduction
during such semi-monthly period (or other period prescribed by the Committee)
with the Trustee. Such contributions shall be allocated to the DCS/401(k)
Account of each Member on whose behalf such contributions were made as soon as
practicable after such date.
(b) Allocation of Voluntary Savings Contributions. Twice per
calendar month (or at such other frequency prescribed by the Committee), the
Committee shall deposit the voluntary savings contributions made during such
semi-monthly period (or other period prescribed by the Committee) with the
Trustee. Such contributions shall be allocated to the
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Voluntary Savings Account of each Member who made such contributions as soon as
practicable after such date.
(c) Allocation of Matching Contributions. Once per calendar month
(or at such other frequency prescribed by the Committee), matching contributions
made in the form of cash pursuant to Section 4.3 during such month (or other
period prescribed by the Committee) shall be deposited with the Trustee. Such
contributions shall be allocated to the Matching Account of each Member for whom
such contributions are made as soon as practicable after such date.
Once per calendar month (or at such other frequency prescribed by the
Committee) matching contributions made in the form of shares of Company Stock
pursuant to Section 4.3 shall be allocated to the Matching Account of each
Member for whom such contributions are made as of the last day of the calendar
month for which such contributions are made (or such other date prescribed by
the Committee).
(d) Allocation of Rollover Contributions. As soon as
administratively practicable after a Member delivers a rollover contribution to
the Committee, the Committee shall deposit such contribution with the Trustee.
Such contribution shall be allocated to the Member's Rollover Account as soon as
practicable after such date.
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(e) Allocation of Loan Repayments. Twice per calendar month (or at
such other frequency prescribed by the Committee), the Committee shall deposit
the loan repayments during such semi-monthly period (or other period prescribed
by the Committee) with the Trustee. Such repayments shall be allocated to the
DCS/401(k) Account or Rollover Account, as applicable, of each Member who made
such repayments as soon as practicable after such date. The Committee shall
reduce the Member's Loan Account (as defined in Section 8.4) by the principal
portion of such loan repayments.
(f) Allocation of Withdrawals. As of each Valuation Date, after making
the adjustments described in Section 7.3, a Member's Account shall be reduced by
the amount of any withdrawals or distributions from such Account processed as of
such Valuation Date.
Section 7.3. Allocation to Members' Accounts of Net Income of Trust
and Fluctuation in Value of Trust Assets. (a) Value of Investment Funds. As of
each Valuation Date, the value of the portion of Members' Accounts that is
invested in each investment fund shall be determined based upon the number of
units allocated to each such Account in such fund and the net asset value of
each such fund, as determined by the Trustee.
(b) Valuation of Portion of Accounts Invested in Company Stock. As
soon as practicable after each Valuation Date, the value of Members' TRASOP
Accounts and the portions of Members' Matching Accounts that are invested in
Company Stock, including any accumulated cash, shall be determined, taking into
account any cash dividends, shares received
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as a stock split or dividend or as a result of a reorganization or other
recapitalization of the Company, or other distributions paid to shareholders of
Company Stock, since the preceding Valuation Date.
(c) Value of Total Account. The valuation of a Member's Account as of
any Valuation Date shall be the sum of the values of his Voluntary Savings
Account, Fund B Account, DCS/401(k) Account, Matching Account, Rollover Account,
Merged Plan Employer Account, TRASOP Account and Loan Account. A Member's
Account shall be further reduced or increased in such manner as the Committee
determines in its discretion to be necessary to provide an equitable allocation
of any change in the value of the net worth of the Trust Fund.
Section 7.4. Correction of Error. If it shall come to the attention of
the Committee that an error has been made in any of the allocations prescribed
by this Plan, appropriate adjustment shall be made to the Accounts of all
Members and Beneficiaries that are affected by such error, except that no
adjustment need be made with respect to the Account of any Member which has been
distributed in full prior to the discovery of such error.
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ARTICLE 8
---------
WITHDRAWALS AND LOANS
---------------------
Section 8.1. Withdrawals from Voluntary Savings Accounts. A Member may
elect to withdraw an amount from his Voluntary Savings Account; provided that
such amount shall be a whole dollar amount of at least $100 (or the entire
balance of such account). A Member may request a withdrawal pursuant to this
Section in the manner prescribed by the Committee; provided that a Member may
make only one such withdrawal per calendar month. The Committee shall prescribe
uniform rules which shall govern the frequency pursuant to which such
withdrawals are processed, and the Valuation Date on which a Member's Voluntary
Savings Account shall be valued for purposes of calculating such a withdrawal.
Amounts withdrawn from a Member's Voluntary Savings Account shall be
first from voluntary savings contributions the Member made prior to January 1,
1987. Any amount withdrawn in excess of his voluntary savings contributions made
prior to January 1, 1987 shall be from the voluntary savings contributions made
by the Member after December 31, 1986, and the taxable earnings previously
allocated to such account, in the proportions prescribed by section 72 of the
Code.
Section 8.2. Withdrawals from Fund B Account. A Member may elect to
withdraw an amount from his Fund B Account; provided that such amount shall be a
whole dollar amount of at least $100 (or the entire balance of such account). A
Member may request
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a withdrawal pursuant to this Section in the manner prescribed by the Committee;
provided that a Member may make only one such withdrawal per calendar month. The
Committee shall prescribe uniform rules which shall govern the frequency
pursuant to which such withdrawals are processed, and the Valuation Date on
which a Member's Fund B Account shall be valued for purposes of calculating such
a withdrawal.
Section 8.3. Withdrawals from Other Accounts (a) Financial Hardship
Withdrawals. The minimum amount that may be withdrawn due to financial hardship
is the lesser of $500 and the aggregate of the balances of a Member's DCS/401(k)
Account (excluding any earnings credited to such account after December 31,
1988), Rollover Account and Merged Plan Employer Account. In addition, to the
extent required by the Committee, the Member must document the need for a
hardship withdrawal of at least $500. No amount may be withdrawn from a Member's
Matching Account or TRASOP Account on account of financial hardship. No
financial hardship withdrawal shall be permitted (1) while any amounts remain in
such Member's Voluntary Savings Account or Fund B Account or (2) if the Member
is currently eligible to borrow from the Plan pursuant to Section 8.4, unless
the Member attests that making loan payments on amounts borrowed from the Plan
will cause a financial hardship.
Financial hardship shall be deemed to exist only if the distribution
is necessary because of immediate and heavy financial need of the Member under
the following circumstances:
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(1) to pay medical expenses described in section 213(d) of the Code
incurred by the Member, the Member's spouse or any dependents of the Member
(as defined in section 152 of the Code) or necessary for these persons to
obtain medical care described in section 213(d) of the Code;
(2) to pay costs directly related to the purchase of the Member's
principal residence (excluding periodic mortgage payments);
(3) to pay (or reimburse the Member for) tuition, room and board, and
related educational fees for 12 months of post-secondary education of the
Member, the Member's spouse, children or dependents (as defined in section
152 of the Code); or
(4) to prevent eviction from, or foreclosure on, the Member's
principal residence.
For purposes of this subsection, a distribution shall be deemed
necessary to satisfy an immediate and heavy financial need if (i) the
distribution is not in excess of the amount of the immediate and heavy financial
need to the Member, as determined by the Committee and (ii) the Member has
obtained all distributions (including Plan withdrawals other than hardship
withdrawals) and all nontaxable loans currently available under all plans
maintained by the Member's Employer, if any. The Member shall be required to
submit any supporting documentation as may be requested by the Committee.
Notwithstanding any provision of the Plan to the contrary, a Member who receives
a hardship distribution hereunder shall be prohibited from making any voluntary
savings contributions under Section 3.1, and any deferred compensation
contributions under Section 4.1, until the first pay period of the calendar
month which begins with or next follows the first anniversary of the hardship
withdrawal.
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The Committee shall determine whether the criteria for hardship
withdrawal have been satisfied and has the right to refuse a hardship withdrawal
request if it finds that such criteria have not been satisfied.
(b) Withdrawals Upon Attainment of Age 59 1/2. A Member who has
attained age 59 1/2 may elect to withdraw an amount from his DCS/401(k) Account,
Rollover Account and Merged Plan Employer Account; provided that such amount
shall not be less than $100 (or the entire aggregate balance of such accounts).
(c) Withdrawals Upon Attainment of Age 70 1/2. Effective February 1,
1998, a Member who has attained age 70 1/2 may elect to withdraw an amount from
his entire Account; provided that such amount shall not be less than $100 (or
the entire balance of such Account).
(d) Miscellaneous Rules. Any amounts withdrawn pursuant to this
Section shall be debited from the Member's accounts in the following order:
(i) Rollover Account,
(ii) DCS/401(k) Account,
(iii) Merged Plan Employer Account,
(iv) Matching Account and
(v) TRASOP Account.
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A Member may request a withdrawal pursuant to this Section in the
manner prescribed by the Committee; provided that a Member may make only one
such withdrawal per calendar month. The Committee shall prescribe uniform rules
which shall govern the frequency pursuant to which such withdrawals are
processed, and the Valuation Date on which a Member's DCS/401(k) Account,
Rollover Account, Merged Plan Employer Account, Matching Account and TRASOP
Account shall be valued for purposes of calculating such a withdrawal. All
withdrawals made pursuant to this Section shall be paid in cash; provided that,
with respect to the portion of any such withdrawal debited from a Member's
TRASOP Account, the Member shall be provided with the opportunity to elect to
receive such portion in the form of shares of Company Stock (with cash in lieu
of any fractional shares).
Section 8.4. Loans. (a) Making of Loans. Subject to the restrictions
set forth in this Section, the Committee shall establish a loan program whereby
any Member who is an Employee may request, in the manner prescribed by the
Committee, to borrow funds from the Plan. The principal balance of such loan
shall not be less than $1,000 and shall not exceed the lesser of (i) 50% of the
aggregate of the Member's DCS/401(k) Account and Rollover Account as of the
Valuation Date on which the loan is made (or if such date is not a Valuation
Date, the first preceding Valuation Date) and (ii) $50,000, reduced by the
excess, if any, of the highest outstanding aggregate loan balance of the Member
under all plans maintained by the Employer during the period of time beginning
one year and one day prior to the date such loan is to be made and ending on the
date such loan is to be made over the outstanding aggregate balance of loans
from all such plans on the date on which such loan is to be made.
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(b) Restrictions. No Member may have more than one loan from the Plan
outstanding at any time; provided, however, that a Member may use the proceeds
of a second loan to repay the outstanding balance of an existing loan from the
Plan in full. Except as set forth in the immediately preceding proviso, a Member
who has a loan outstanding must repay the balance of such loan before receiving
an additional loan. Any loan approved by the Committee pursuant to the preceding
subsection (a) shall be made only upon the following terms and conditions:
(1) The period for repayment of the loan shall not exceed four years
(except as described in paragraph (2) below) from the date of the loan. Any
loan may be prepaid, without penalty, by delivery to the Committee of cash
in an amount equal to the entire unpaid balance of such loan. Any loan is
due in full upon termination of employment.
(2) No loan shall be made unless the Member consents to have such loan
repaid in substantially equal installments deducted from the regular
payments of the Member's compensation during the term of the loan.
Notwithstanding the foregoing, loan repayments may be suspended for (i) any
period during which a Member takes an authorized sick leave from his
Employer and (ii) any period of a Member's unpaid authorized leave of
absence, but in no event for a period exceeding one year. Upon resumption
of active employment within such one-year period, the term of such Member's
loan shall be extended by the period of such suspension. Loan repayments
under this Plan also may be suspended with respect to a Member in uniformed
service to the extent required by USERRA and in accordance with section
414(u)(4) of the Code.
(3) Each loan shall be evidenced by the Member's collateral promissory
note for the amount of the loan, with interest, payable to the order of the
Trustee, and shall be secured by an assignment of a portion of the Member's
DCS/401(k) Account or Rollover Account or both, as the case may be, under
the Plan equal to the initial principal amount of such loan.
(4) Each loan shall bear a fixed interest rate equal to the prime rate
as published in the Wall Street Journal on the first business day of the
month during which the Member initiates the loan, plus 1% (or such other
rate prescribed by the Committee commensurate with the interest rate then
being charged by persons in the business of lending money in the area for
loans made under similar circumstances). For purposes of this paragraph, a
Member shall "initiate" a loan on the date on which the Member
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makes an application via electronic means (or such other means prescribed
by the Committee) for a loan hereunder.
(5) No distribution from his DCS/401(k) Account or Rollover Account
shall be made to any Member who has borrowed from the Trust unless and
until the loan, including interest, has been repaid.
(6) Each Member requesting a loan shall, as a condition of receiving
such loan, pay such reasonable loan application and processing fees as
shall be set from time to time by the Committee. Unless otherwise
prescribed by the Committee, such loan origination fee shall be deducted
separately from the Member's Account.
(7) The Committee may, in its sole discretion, restrict the amount to
be disbursed pursuant to any loan request, or deny any loan request, to the
extent it deems necessary.
If any loan or portion of a loan made to a Member under the Plan,
together with the accrued interest thereon, is in default, the Trustee, upon
direction from the Company, shall take appropriate steps to collect on the note
and foreclose on the security. For purposes of this Section, a loan shall be
considered in "default" if the Member fails to make principal and interest
payments in the time and manner prescribed by procedures adopted for this
purpose by the Committee.
On the date on which a Member receives a distribution of his Accounts
pursuant to Article 9, any loan or portion of a loan made to him under the Plan,
together with the accrued interest thereon, shall be charged to the Member's
DCS/401(k) Account and Rollover Account, as applicable, after all other
adjustments required under the Plan, but before any distribution pursuant to
Article 9.
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(c) Loan Account. The Trustee shall establish, operate and maintain
a Loan Account for the receipt of amounts transferred from a Member's DCS/401(k)
Account and Rollover Account, as applicable, pursuant to this Section.
Appropriate accounting entries reflecting such transfers shall be concurrent
with the disbursement to the Member of amounts borrowed. Interest shall be
allocated to such Member's DCS/401(k) Account or Rollover Account, as the case
may be, in accordance with rules promulgated by the Committee for this purpose,
and shall be invested in accordance with the Member's investment election as in
effect pursuant to Section 7.1.
(d) Applicability. Notwithstanding anything herein to the contrary,
for purposes of this Section, the term "Member" includes any Member who is not
an Employee and any Beneficiary or alternate payee with an account balance under
this Plan if such Member, Beneficiary or alternate payee is a "party in
interest" as defined in section 3(14) of ERISA.
Section 8.5. Periodic Distributions of Accumulated Dividends from
TRASOP Account. The provisions of this Section shall apply to each Member for
whom a TRASOP Account is established under the Plan (or, in the case of a
deceased Member, the Member's Beneficiary). The Committee shall direct the
Trustee to distribute to such Member (or Beneficiary) from time to time, but not
less frequently than annually, the accumulated cash dividends credited to such
Member's TRASOP Account. With respect to a Member who is an
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Employee, the Committee may direct the Trustee to pay any such cash dividend to
the Member's Employer, as agent, for payment to the Member.
ARTICLE 9
---------
DISTRIBUTION UPON TERMINATION OF EMPLOYMENT
-------------------------------------------
Section 9.1. Entitlement to Distribution Upon Termination of
Employment. (a) Time of Distribution. A Member shall be entitled to a full and
final distribution of the Member's entire Account as soon as administratively
practicable after the date of the Member's termination of employment. Except as
provided in Section 10.2, the Member shall elect the date on which payment of
the Member's Account shall commence in accordance with procedures established by
the Committee, or may elect to defer distribution to a later date (but in no
event later than the date prescribed by Section 10.3). The failure of a Member
to elect a distribution under this Section shall be treated as an election to
defer distribution to a later date for purposes of the preceding sentence.
(b) Availability of Separate Elections. A Member's election may
apply to the to the Member's entire account, or the Member may make separate
elections with respect to his accounts, as follows:
(i) an election with respect to the Member's DCS/401(k) Account,
Matching Account and Rollover Account,
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(ii) an election with respect to the Member's Voluntary Savings
Account,
(iii) an election with respect to the Member's Fund B Account and
(iv) an election with respect to the Member's TRASOP Account.
Notwithstanding the foregoing, a Member who is a Mendota Member, a Metromail
Member or a Meredith/Burda Member may not make separate elections with respect
to his accounts as described in the preceding sentence.
(c) Valuation of Accounts. The Committee shall prescribe uniform
rules which shall govern the frequency pursuant to which distributions under
this Section are processed and the Valuation Date on which a Member's Account
shall be valued for purposes of calculating such distribution. For purposes of
the foregoing, the value of any portion of a Member's Account that is invested
in shares of Company Stock shall be based on the average of the high and low
transaction prices (as reported in the New York Stock Exchange-Composite
Transactions) in trading of Company Stock on such date.
(d) Partial Withdrawals. A Member (other than a Mendota Member, a
Metromail Member or a Meredith/Burda Member) who has terminated employment may
elect to make partial withdrawals from the Member's Voluntary Savings Account
and Fund B Account in the manner described in Sections 8.1 and 8.2,
respectively. Such a Member who has terminated employment and who has attained
age 59 1/2 may also elect to make partial withdrawals from the Member's
DCS/401(k) Account and Rollover Account in the manner described in Section
8.3(b), and upon attainment of age 70 1/2, may elect to make partial
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withdrawals from the Member's entire Account in the manner described in Section
8.3(c). No other partial withdrawals shall be permitted under the Plan by a
Member who has terminated employment.
Section 9.2. Form of Distribution. (a) In General. Except as
provided in subsection (b) below, a Member may elect a full or partial
distribution of his Account under the Plan only in the form of a single sum.
(b) Protected Forms of Distribution for Certain Members. (1)
Mendota Members. Notwithstanding subsection (a) above, a Mendota Member may
elect that distribution of his Account be made in one of the following optional
forms of benefit, in lieu of a single sum:
(A) Equal Installments. Equal installment payments, paid monthly,
quarterly, semi-annually or annually, as elected by the Member, over a
payment period equal to a whole number of years specified by the Member,
not to exceed 15 (or if less, the Member's life expectancy or joint life
expectancy of the Member and his designated Beneficiary). If the Member's
Account is exhausted prior to the expiration of the specified payment
period, installment payments shall cease. If a balance remains in the
Member's Account at the end of the specified payment period, installment
payments shall continue in the same frequency until the Account is
exhausted.
(B) Variable Installments. Monthly installment payments paid over a
payment period equal to the life expectancy of the Member, determined in
the year in which payments commence. The amount of the monthly payments
shall be adjusted once each year so that the Member's Account is exhausted
as of the end of the payment period.
(C) Single Life Annuity. The balance of the Member's Account shall
be applied to purchase a single premium annuity contract providing for
monthly payments for the Member's lifetime. No benefits shall be payable
under such contract upon the Member's death after his annuity starting
date. If a Member elects this form of benefit, he shall be subject to the
special election procedures described in Section 10.6.
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(D) Joint and Survivor Annuity. The balance of the Member's Account
shall be applied to purchase a single premium annuity contract providing
for reduced monthly payments for the Member's lifetime, and if the Member's
designated contingent annuitant survives him, to such contingent annuitant
for his remaining lifetime in an amount equal to 50%, 75% or 100%, as
elected by the Member, of the Member's monthly annuity payments. If a
Member elects this form of benefit, he shall be subject to the special
election procedures described in Section 10.6.
(2) Meredith/Burda Members. Notwithstanding subsection (a) above, a
Meredith/Burda Member may elect that distribution of his Account be made in the
following optional form of benefit, in lieu of a single sum payment:
(A) Variable Installments. Installment payments, paid monthly,
quarterly, semi-annually or annually, as elected by the Member, over a
payment period equal to a whole number of years specified by the Member,
not to exceed 20 (or if less, the Member's life expectancy or joint life
expectancy of the Member and his designated Beneficiary). The amount of
each installment payment shall be adjusted, in accordance with the payment
frequency elected by the Member, so that the Member's Account is exhausted
as of the end of the payment period.
(3) Metromail Members. Notwithstanding subsection (a) above, a
Metromail Member may elect that distribution of his Account be made in one of
the following optional forms of benefit, in lieu of a single sum payment:
(A) Variable Installments. Installment payments, paid monthly,
quarterly, semi-annually or annually, as elected by the Member, over a
payment period equal to a whole number of years specified by the Member,
not to exceed 20 (or if less, the Member's life expectancy or joint life
expectancy of the Member and his designated Beneficiary). The amount of
each installment payment shall be adjusted, in accordance with the payment
frequency elected by the Member, so that the Member's Account is exhausted
as of the end of the payment period.
(B) Single Life Annuity. The balance of the Member's Account shall
be applied to purchase a single premium annuity contract providing for
monthly payments
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for the Member's lifetime. No benefits shall be payable under such contract
upon the Member's death after his annuity starting date. If a Member elects
this form of benefit, he shall be subject to the special election
procedures described in Section 10.6.
(C) Joint and Survivor Annuity. The balance of the Member's Account
shall be applied to purchase a single premium annuity contract providing
for reduced monthly payments for the Member's lifetime, and if the Member's
designated contingent annuitant survives him, to such contingent annuitant
for his remaining lifetime in an amount equal to 50% of the Member's
monthly annuity payments. If a Member elects this form of benefit, he
shall be subject to the special election procedures described in Section
10.6.
Section 9.3. Medium of Distribution. Any distribution made under
this Section shall be made in cash, except that a Member may elect distribution
of the Member's TRASOP Account, and the portion of the Member's Matching Account
that is invested in Company Stock, in the form of whole shares of Company Stock
with cash in lieu of fractional shares. Notwithstanding the foregoing, a Member
who is a Mendota Member, a Meredith/Burda Member or a Metromail Member may elect
such a distribution in the form of whole shares of Company Stock only if the
Member elects to receive payment of his Account in the form of a single sum.
Section 9.4. Distribution Upon Death. In the case of a Member's
death, distribution of such Member's entire Account shall be made in the form of
a single sum to the Member's Beneficiary as of the date elected by such
Beneficiary; provided, however, that:
(i) payment shall be made no later than the December 31 which
coincides with or next follows the fifth anniversary of the date of the
Member's death;
(ii) the Member's Beneficiary may elect to receive payment of the
Member's TRASOP Account, and the portion of the Member's Matching Account
that is invested
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in Company Stock, in the form of whole shares of Company Stock with cash in
lieu of fractional shares; and
(iii) in the case of a Mendota Member, a Meredith/Burda Member or a
Metromail Member, (i) if the Member is married and elects an annuity form
of benefit and dies prior to his annuity starting date, a death benefit
shall be paid in accordance with Section 10.6(b), (ii) if the Member is not
married and elects an annuity form of benefit and dies prior to his annuity
starting date, such Member's benefit election shall be cancelled and (iii)
if, prior to the date of his death, the Member elects an optional
installment or annuity form of benefit and dies after the date payments
commence, payment shall be made to the Member's Beneficiary or contingent
annuitant, as the case may be, in accordance with the terms of such
optional form of benefit.
ARTICLE 10
----------
MISCELLANEOUS DISTRIBUTION RULES
--------------------------------
Section 10.1. Direct Rollover Option. In the case of any
distribution (including any withdrawal) that is an "eligible rollover
distribution" within the meaning of section 402(c)(4) of the Code, a distributee
may elect that all or any portion of such distribution to which he is entitled
shall be directly transferred from the Plan to (i) an individual retirement
account or annuity described in section 408 of the Code, (ii) to this Plan or
another employer's retirement plan qualified under section 401(a) of the Code
(the terms of which permit the acceptance of rollover distributions) or (iii) to
an annuity plan described in section 403(a) of the Code; provided, however, that
if the distributee is a surviving spouse of a Member, such distribution may be
transferred only to an individual retirement account or annuity.
Notwithstanding the foregoing, a distributee shall not be entitled to elect to
have an eligible rollover distribution transferred pursuant to this subsection
if the total of all eligible
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rollover distributions with respect to such distributee for the Plan Year is not
reasonably expected to equal at least $200, or in the case of a partial direct
rollover, the portion so rolled over equals at least $500. For purposes of this
subsection, the term "distributee" shall include (i) a Member, (ii) an alternate
payee (within the meaning of section 414(p)(8) of the Code) with respect to a
Member under a qualified domestic relations order or (iii) a surviving spouse of
a Member. Notwithstanding the foregoing, any person who elects a direct rollover
shall receive a check from the Trust payable to the order of the transferee
eligible retirement plan or individual retirement account which is to be
delivered to such plan or account by the individual receiving such check.
Section 10.2. Distribution of Small Account Balances. If the balance
of the Member's Account to be distributed under this Section does not exceed (i)
prior to January 1, 1998, $3,500 or (ii) on or after January 1, 1998, $5,000 (or
such other amount prescribed by section 411(a)(11) of the Code) (such amount
referred to herein as the "small benefit amount"), such balance shall be
distributed as soon as administratively practicable after the Member's
termination of employment occurs (or such other time prescribed by the
Committee). For purposes of the foregoing sentence, if as of any Valuation Date
the value of a Member's Account exceeds the small benefit amount in effect at
the time of a proposed distribution under the preceding sentence, the value of
the Member's Account shall at all times be deemed to exceed such small benefit
amount.
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Section 10.3. Deferral of Distribution. Except as provided in
Section 10.2, a Member who is entitled to a distribution under Section 9.1 shall
have the right to defer distribution of his Account; provided, however, that in
no event shall distribution of the Member's Account commence later than the 60th
day of the Plan Year following the Plan Year which contains the later of (i) the
date on which the Member attains age 65 and (ii) the date on which the Member
terminates employment.
Section 10.4. Required Distributions Upon Attainment of Age 70 1/2.
Notwithstanding Article 9 of the Plan, with respect to a Member who, for the
calendar year in which the Member attains age 70 1/2 is a 5%-owner (as defined
in section 416(i) of the Code), and who continues in employment after attaining
age 70 1/2, distribution of the Member's account balance shall commence no later
than April 1 of the calendar year following the calendar year in which the
Member attains age 70 1/2, and distributions shall continue to such Member no
later than each subsequent December 31. Distributions made under this Section
shall be made in the manner described in section 401(a)(9) of the Code and
Regulations thereunder. Such distributions shall be calculated based on the
life expectancy of the Member, and such life expectancy shall not be
recalculated.
Section 10.5. Determination of Beneficiary. Each Member shall have
the right to designate a Beneficiary or Beneficiaries (which may be designated
contingently and which may be a legal entity other than a natural person) to
receive any distribution to be made under Section 9.4 upon the death of such
Member; provided, however, that no such designation (or
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change thereof) shall be effective if the Member was married through the one-
year period ending on the date of the Member's death unless such designation (or
change thereof) was consented to at the time of such designation (or change
thereof) by the person who was the Member's spouse during such period, in
writing, acknowledging the effect of such consent and witnessed by a notary
public or a Plan representative, or it is established to the satisfaction of the
Committee that such consent could not be obtained because the Member's spouse
cannot be located or such other circumstances as may be prescribed in
Regulations. A person must survive a Member for a period of 48 hours in order to
qualify as a Member's Beneficiary. A Member's designated Beneficiary need not be
a natural person, and may be a trust or the Member's estate. Subject to the
first sentence of this Section, a Member may from time to time, without the
consent of any Beneficiary, change or cancel any such designation. Such
designation and each change therein shall be filed with the Committee on a form
provided by the Committee for this purpose. If no Beneficiary has been named by
a deceased Member, or if the designated Beneficiary has predeceased the Member,
the entire balance of the deceased Member's Account shall be distributed by the
Trustee at the direction of the Committee--
(a) to the surviving spouse of such deceased Member, if any, or
(b) if there shall be no surviving spouse, to the person or entity
entitled to benefits under the Donnelley Group Life Insurance Plan on
account of the Member's death if, in the case of a natural person, such
person survives the deceased Member (such person referred to herein as the
"life insurance beneficiary"), or
(c) if there shall be no surviving spouse or life insurance
beneficiary, per stirpes to the descendants of such deceased Member, if
any, or
(d) if there shall be no surviving spouse, life insurance beneficiary
or living descendants, to the estate of such deceased Member.
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If within a period of three years following the death of any Member, the
Committee in the exercise of reasonable diligence has been unable to locate any
of the persons entitled to benefits under this Section with respect to such
Member, the rights of such person or persons shall be forfeited and the
Committee shall direct the Trustee to pay such benefit or benefits to the person
or persons next entitled thereto under the succession prescribed by this
Section.
Section 10.6. Special Rules Relating to Election of Annuity Form of
Benefit. The provisions of this Section shall apply only to a Mendota Member or
a Metromail Member who elects to receive payment of his Account in an optional
annuity form of benefit described in Section 9.2(b).
(a) Qualified Joint and Survivor Annuity Notice. No less than 30
days (or such shorter period as may be permitted by section 417(a)(7) of
the Code) and no more than 90 days before the date of distribution, the
Committee shall give the Member by mail or personal delivery written notice
a general description of the single premium annuity contract, a general
description of the circumstances under which it will be purchased and
general information on the amount of each payment under a typical single
premium annuity contract. Such notice also shall advise the Member that,
upon written request to the Committee prior to the end of his election
period, he shall be given a written explanation in nontechnical language of
the terms and conditions of the single premium annuity contract, of the
other methods of distribution available pursuant to Section 9.2 and of the
amount of each payment that he would be entitled to receive under such a
contract or under the other methods of distribution. Such explanation
shall be mailed or personally delivered to the Member within 30 days from
the date the Member's written request is received by the Committee and the
Member's election period shall end no earlier than 90 days after such
explanation is so mailed or delivered.
(b) Qualified Pre-retirement Survivor Annuity. If the Member is
married and dies after making an election to have his Account distributed
in an annuity form of benefit but prior to his annuity starting date, such
Member's Account shall be applied to purchase a single premium annuity
contract providing for payment over the lifetime of the Member's surviving
spouse. Notwithstanding the foregoing, the Member's surviving spouse may
elect, in the time and manner prescribed by the Committee, to
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receive payment of the Member's Account in the form of a single sum, in
lieu of a single premium annuity contract.
(c) Election and Waiver Procedures. A Member may, subject to the
last sentence of this paragraph, revoke the annuity form of distribution
provided under the Plan at any time during the 90-day period ending on the
Member's benefit commencement date (the "election period"). Such a
revocation shall be made by delivering a written notice describing the
election, change or revocation to the Committee on a form provided by the
Committee for this purpose; provided, however, that if the Member has been
married for the one-year period ending on his benefit commencement date,
and as a result of such revocation, the Member's spouse would not be
entitled to receive a survivor's benefit at least equal to that provided by
the 50% joint and survivor annuity form of benefit, such election shall not
be effective unless it shall have been consented to, at the time of such
election, revocation or change, in writing by the Member's spouse and such
consent acknowledges the effect of such revocation and is witnessed by
either a Plan representative or a notary public, or it is established to
the satisfaction of the Committee that such consent cannot be obtained
because the Member's spouse cannot be located or such other circumstances
as may be prescribed in Regulations.
Section 10.7. Distributions to Minor and Disabled Beneficiaries. Any
distribution which is payable to a person who is a minor or to a person who, in
the opinion of the Committee, is unable to manage his affairs by reason of
illness or mental incompetency may be made to or for the benefit of any such
person in such of the following ways as the Committee shall direct:
(a) directly to any such minor if, in the opinion of the Committee, he
is able to manage his affairs,
(b) to the legal representative of any such person,
(c) to a custodian under a Uniform Gifts to Minors Act for any such
minor, or
(d) to some near relative of any such person to be used for the
latter's benefit.
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Neither the Committee nor the Trustee shall be required to review the
application by any third party of any distribution made to or for the benefit of
a person pursuant to this Section.
Section 10.8. Qualified Domestic Relations Orders. If the Committee
shall receive any written judgment, decree or order (including approval of a
property settlement agreement) pursuant to State domestic relations or community
property law relating to the provision of child support, alimony or marital
property rights of a spouse, former spouse, child or other dependent of a Member
and purporting to provide for the payment of all or a portion of the Member's
Account to or on behalf of one or more of such persons (such judgment, decree or
order being hereinafter called a "domestic relations order"), the Committee
shall arrange to determine whether such order constitutes a "qualified domestic
relations order," as defined in section 414(p) of the Code and section 206(d)(3)
of ERISA. If the order is determined to be a qualified domestic relations
order, all or a portion of the Member's Account, as specified in the order,
shall be assigned to the person or persons named therein, and shall be payable
in accordance with the terms of such order.
The manner in which all or any portion of a Member's Account under the
Plan may be assigned and paid to any other person pursuant to the terms of a
domestic relations order shall be governed by written procedures adopted by the
Committee for this purpose, section 414(p) of the Code, section 206(d)(3) of
ERISA and Regulations issued thereunder. Such procedures shall provide that
payments under a domestic relations order may commence as soon as
administratively practicable after such order is determined by the Committee (or
its
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delegate) to constitute a "qualified domestic relations order" under section
414(p) of the Code and section 206(d)(3) of ERISA, if the terms of the order so
provide.
ARTICLE 11
----------
SPECIAL PARTICIPATION RULES
---------------------------
Section 11.1. Transfers Between Employers and Affiliates or
Collective Bargaining Units. If a Member shall be transferred to a non-
participating division, a non-participating collective bargaining unit or an
Affiliate that has not adopted the Plan, such transfer shall not terminate the
Member's participation in the Plan and such Member shall continue to participate
in the Plan until an event shall occur which would have terminated his
participation had he continued in the service of a participating division or
unit of an Employer until the occurrence of such event; provided, however, that
a Member shall not be eligible to make contributions to the Plan when covered by
such non-participating collective bargaining unit or employed at such Affiliate
or division.
Section 11.2. Leased Employees. If an Employee becomes a leased
employee (within the meaning of section 414(n)(2) of the Code), then any period
during which services are performed as a leased employee shall be taken into
account solely for the purposes of determining whether and when such person has
terminated his employment for purposes of
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Article 9 to the same extent it would have been had such services been performed
as an Employee.
Section 11.3. Reemployment of Veterans. The provisions of this
Section shall apply in the case of the reemployment by an Employer of an
Eligible Employee, within the period prescribed by USERRA, after the Eligible
Employee's completion of a period of qualified military service (as defined in
section 414(u)(5) of the Code). The provisions of this Section are intended to
provide such Eligible Employees with the rights required by USERRA and section
414(u) of the Code and shall be interpreted in accordance with such intent.
(a) Make Up of Voluntary Savings and Deferred Compensation
Contributions. Such Eligible Employee shall be entitled to make
contributions under the Plan in addition to any voluntary savings
contributions which the Eligible Employee elects to have made under the
Plan pursuant to Section 3.1 (such contributions referred to herein as
"Make Up Savings Contributions"), and shall be entitled to make
contributions under the Plan in addition to any deferred compensation
contributions which the Eligible Employee elects to have made under the
Plan pursuant to Section 4.1 (such contributions referred to herein as
"Make Up Deferrals"). From time to time while employed by an Employer,
such Employee may elect to make such Make Up Savings Contributions and Make
Up Deferrals during the period beginning on the date of such Employee's
reemployment and ending on the earlier of:
(i) the end of the period equal to the product of three and such
Employee's period of qualified military service, and
(ii) the 5th anniversary of the date of such reemployment.
Such Employee shall not be permitted to contribute Make Up Savings
Contributions and Make Up Deferrals to the Plan in excess of the amount
which the Employee could have elected to have made under the Plan in the
form of voluntary savings contributions or deferred compensation
contributions, as the case may be, if the Eligible Employee had continued
in employment with his Employer during such period of qualified military
service. Such Eligible Employee shall be deemed to have earned
"Compensation" from his Employer during such period of qualified military
service for this purpose in the amount prescribed by sections 414(u)(2)(B)
and 414(u)(7) of the
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Code. The manner in which an Eligible Employee may elect to make Make Up
Savings Contributions and Make Up Deferrals pursuant to this subsection (a)
shall be prescribed by the Committee.
(b) Make Up of Matching Contributions. An Eligible Employee who
makes Make Up Deferrals as described in subsection (a) shall be entitled to
an allocation of Matching Contributions ("Make Up Matching Contributions")
in an amount equal to the amount of Matching Contributions which would have
been allocated to the Matching Account of such Eligible Employee under the
Plan if such Make Up Deferrals had been made in the form of deferred
compensation contributions during the period of such Employee's qualified
military service (as determined pursuant to section 414(u) of the Code).
The Eligible Employee's Employer shall make a special contribution to the
Plan which shall be utilized solely for purposes of such allocation.
Any contributions made by an Eligible Employee or an Employer pursuant to this
Section on account of a period of qualified military service in a prior Plan
Year shall not be subject to the limitations prescribed by Sections 4.2, 4.4 and
5.1 of the Plan (relating to sections 402(g), 404 and 415 of the Code,
respectively) for the Plan Year in which such contributions are made. The Plan
shall not be treated as failing to satisfy the nondiscrimination rules of
Section 5.2 of the Plan (relating to sections 401(k)(3) and 401(m) of the Code)
for any Plan Year solely on account of any Make Up Savings Contributions, Make
Up Deferrals or Make Up Matching Contributions made by or on behalf of an
Eligible Employee pursuant to this Section.
ARTICLE 12
----------
SHAREHOLDER RIGHTS WITH RESPECT TO COMPANY STOCK
------------------------------------------------
Section 12.1. Voting Rights. Each Member, as a named fiduciary
within the meaning of section 403(a)(1) of ERISA, shall be entitled to direct
the Trustee with respect to
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the vote of the shares of Company Stock allocated to his TRASOP Account and
Matching Account as of the shareholder record date for such vote, and the
Trustee shall follow the directions of such Member. Subject to the immediately
following sentence, each Member who is entitled to direct the Trustee with
respect to the vote of Company Stock pursuant to the preceding sentence, also as
such named fiduciary, shall be entitled to direct the Trustee with respect to
the vote of (i) shares of Company Stock held by the Trust for which no
instructions were timely received by the Trustee, (ii) shares of Company Stock
which have not been allocated to Members' Matching Accounts and (iii) fractional
shares of Company Stock held in Members' TRASOP Accounts and Matching Accounts.
Members shall be deemed to have directed the Trustee to vote all shares of
Company Stock allocated to Members' TRASOP Accounts and Matching Accounts for
which the Trustee received no timely voting instructions, all shares of stock
which have not been allocated to Members' Matching Accounts and all fractional
shares credited to Members' TRASOP Accounts and Matching Accounts, to the extent
permitted by law, in the same proportion and manner as shares for which
instructions were received. Written notice of any meeting of stockholders of the
Company or other occasion for the exercise of voting or other rights and a
request for voting instructions shall be given by the Trustee, in such manner as
the Trustee shall determine, to each Member entitled to give instructions for
voting shares of stock at such meeting, within the time for furnishing such
notice to stockholders of the Company.
Section 12.2. Shareholder Rights in the Event of a Tender Offer. In
the event a tender offer is made generally to the shareholders of the Company to
transfer all or a portion
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of their shares of stock in return for valuable consideration, including but not
limited to, offers regulated by Section 14(d) of the Securities Exchange Act of
1934, each Member, as a named fiduciary within the meaning of Section 403(a)(1)
of ERISA, shall be entitled to direct the Trustee with respect to the sale,
exchange or transfer of shares of Company Stock allocated to his TRASOP Account
and Matching Account, and the Trustee shall follow the directions of such
Member. To the extent that the Trustee does not receive timely instructions from
a Member who has the authority pursuant to the preceding sentence to instruct
the Trustee to tender or exchange the shares allocated to his TRASOP Account and
Matching Account, such Member, as a named fiduciary within the meaning of
Section 403(a)(i) of ERISA, shall be deemed to have timely instructed the
Trustee not to tender or exchange such shares of Company Stock. Subject to the
immediately following sentence, each Member who is entitled to direct the
Trustee with respect to the sale, exchange or transfer of shares of Company
Stock pursuant to the first sentence of this paragraph, also as such named
fiduciary, shall be entitled to direct the Trustee with respect to the tender or
exchange of (i) shares of Company Stock which have not been allocated to
Members' Matching Accounts and (ii) fractional shares of Company Stock held in
Members' TRASOP Accounts and Matching Accounts. Members shall be deemed to have
directed the Trustee with respect to the tender or exchange of all shares of
Company Stock which have not been allocated to Members' Matching Accounts and
all fractional shares, to the extent permitted by law, in the same proportion
and manner as shares for which instructions were or were deemed to have been
received. A Member shall not be limited in the number of instructions to tender
or withdraw from tender which he can give but a Member shall not have the right
to give instructions to tender or withdraw from
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<PAGE>
tender after a reasonable time established by the Trustee. Notwithstanding
Section 7.1(d), with respect to proceeds from the sale of any shares of Company
Stock which are sold pursuant to this paragraph, the Trustee shall invest the
proceeds as directed by the Member among the investment options then available
under the Plan.
Section 12.3. Applicability. In the case of a Beneficiary of a
deceased Member, or an alternate payee under a qualified domestic relations
order, for whom an Account has been established under this Plan, such
Beneficiary or alternate payee, as the case may be, shall be a named fiduciary
for the same purposes, shall have the same rights as and shall otherwise be
treated in the same manner for purposes of this Article as the Member on whose
behalf the Account initially was established.
Section 12.4. Confidentiality. Notwithstanding anything contained
herein to the contrary, all instructions and directions received by the Trustee
from Members pursuant to this Article shall be maintained by the Trustee as
confidential and shall not be disclosed to any person, including any Employer or
Affiliate, or any Employee, officer or director of any Employer or Affiliate;
provided, however, that such instructions may be relayed by the Trustee to a
recordkeeper, auditor or other person providing services to the Plan if such
person (i) is not an Employer or Affiliate, or an Employee, officer or director
of an Employer or Affiliate, and (ii) agrees not to divulge such directions to
any other person, including any Employer or Affiliate, or any Employee, officer
or director of an Employer or Affiliate.
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ARTICLE 13
----------
ADMINISTRATION
--------------
Section 13.1. The Committee. (a) The Company shall be the
"administrator" of the Plan within the meaning of such term as used in ERISA.
The Company shall appoint a Committee consisting of three or more members which
shall be responsible for carrying out the Company's duties as administrator and
(except for duties specifically vested in the Trustee) for the administration of
the provisions of the Plan. The Committee shall be a "named fiduciary" within
the meaning of such term as used in ERISA.
(b) The Company shall have the right at any time, with or without
cause, to remove any member of the Committee. A member of the Committee may
resign and his resignation shall be effective upon delivery of his written
resignation to the Company. Upon the resignation, removal or failure or
inability for any reason of any member of the Committee to act hereunder, the
Company shall appoint a successor member. All successor members of the
Committee shall have all the rights, privileges and duties of their
predecessors, but shall not be held accountable for the acts of their
predecessors.
(c) Any member of the Committee may, but need not, be an Employee or
a director, officer or shareholder of any of the Employers, and such status
shall not disqualify him from taking any action hereunder or render him
accountable for any distribution or other material advantage received by him
under the Plan, provided that no member of the
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Committee who is a Member in the Plan shall take part in any action of the
Committee on any matter involving solely his rights under the Plan.
(d) The Committee shall have the duty and discretionary authority to
interpret and construe the terms of the Plan in regard to all questions of
eligibility, the status and rights of Members, Beneficiaries and other persons
under the Plan, and the manner, time and amount of payment of any distributions
under the Plan. Each Employer shall, from time to time, upon request of the
Committee, furnish to the Committee such data and information as the Committee
shall require in the performance of its duties.
(e) The Committee shall direct the Trustee to make payments of
amounts to be distributed from the Trust under the Plan.
(f) The members of the Committee may allocate their responsibilities
among themselves and may designate any person, committee of persons, partnership
or corporation to carry out any of their responsibilities. Any such allocation
or designation shall be reduced to writing, and such writing shall be kept with
the records of the meetings of the Committee.
(g) The Committee may act at a meeting by the vote of assent of a
majority of its members, or by writing without a meeting by the assent of all of
its members. The secretary or other person designated by the Committee shall
keep records of all meetings of the Committee. The Committee may adopt such
rules and procedures as it deems desirable for the
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conduct of its affairs and the administration of the Plan, provided that any
such rules and procedures shall be consistent with the provisions of the Plan
and ERISA.
(h) The members of the Committee, and each of them, shall discharge
their duties with respect to the Plan (i) solely in the interest of the Members
and Beneficiaries, (ii) for the exclusive purposes of providing benefits to
Employees participating in the Plan and their Beneficiaries and of defraying
reasonable expenses of administering the Plan and (iii) with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. The Employers
shall jointly and severally indemnify the members of the Committee, and each of
them, from the effects and consequences of their acts, omissions and conduct in
their official capacity, except to the extent that such effects and consequences
shall result from their own willful misconduct.
(i) No member of the Committee shall receive any compensation or fee
for his services, unless otherwise agreed between such member of the Committee
and the Employers, but the Employers shall reimburse the Committee members for
any necessary expenditures incurred in the discharge of their duties as
Committee members.
(j) The Committee may employ such counsel (who may be of counsel for
an Employer or any Affiliate) and agents and may arrange for such clerical and
other services as it may require in carrying out the provisions of the Plan.
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Section 13.2. Claims Procedure. If any Member or other person (a
"claimant") believes he is entitled to benefits in an amount greater than those
which the claimant is receiving or has received, the claimant may file a claim
with the Committee. Such a claim shall be in writing and state the nature of the
claim, the facts supporting the claim, the amount claimed, and the address of
the claimant. The Committee shall review the claim and, unless special
circumstances require an extension of time, within 90 days after receipt of the
claim, give written notice by registered or certified mail, messenger, delivery
service or via facsimile to the claimant or his duly authorized representative
of the decision with respect to the claim. If special circumstances require an
extension of time, the claimant shall be so advised in writing within the
initial 90-day period and in no event shall such an extension exceed 90 days.
The notice of the Committee's decision with respect to the claim shall be
written in a manner calculated to be understood by the claimant and, if the
claim is wholly or partially denied, set forth the specific reasons for the
denial, specific references to the pertinent Plan provisions on which the denial
is based, a description of any additional material or information necessary for
the claimant to perfect the claim, an explanation of why such material or
information is necessary and an explanation of the claim review procedure under
the Plan. The Committee also shall advise the claimant that the claimant or his
duly authorized representative may request a review of the denial by the
Committee by filing with the Committee, within 30 days after notice of the
denial has been received by the claimant, a written request for such review. The
claimant shall be informed that he may have reasonable access to pertinent
documents and submit comments in writing to the Committee within the same 30-day
period. If a request is so filed, review of the denial shall be made by the
Committee within, unless special
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<PAGE>
circumstances require an extension of time, 60 days after receipt of such
request, and the claimant shall be given written notice of the resulting final
decision. If special circumstances require an extension of time, the claimant
shall be so advised in writing within the initial 60-day period and in no event
shall an extension exceed 60 days. The notice of the Committee's final decision
shall include specific reasons for the decision and specific references to the
pertinent Plan provisions on which the decision is based and shall be written in
a manner calculated to be understood by the claimant.
Section 13.3. Notices to Members, Etc. Any notice, report or statement
given, made, delivered or transmitted to a Member or any other person entitled
to or claiming benefits under the Plan shall be deemed to have been duly given,
made or transmitted when sent via messenger, delivery service, facsimile or
mailed by first class mail with postage prepaid and addressed to the Member or
such person at the address last appearing on the records of the Committee. A
Member or other person may record any change of his address from time to time by
written notice filed with the Committee.
Section 13.4. Notices to Employers or Committee. Any written
direction, notice or other communication from Members or any other person
entitled to or claiming benefits under the Plan to the Employers or the
Committee shall be deemed to have been duly given, made or transmitted either
when delivered to such location as shall be specified upon the forms prescribed
by the Committee for the giving of such direction, notice or other communication
or when otherwise received by the Committee. Notwithstanding the
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foregoing, a claim for benefits filed pursuant to Section 13.2 must be sent to
the Committee in care of the Company at the address of its corporate
headquarters.
Section 13.5. Records. The Committee shall keep a record of all of its
proceedings and shall keep or cause to be kept all books of accounts, records
and other data as may be necessary or advisable in its judgment for the
administration of the Plan.
Section 13.6. Reports of Trust Fund and Accounting to Members. The
Committee shall keep on file, in such form as it shall deem convenient and
proper, all reports concerning the Trust Fund received by it from the Trustee.
The Committee shall, not less frequently than quarterly, advise each Member of
the value of the Member's Account through a written statement sent to the Member
in the manner described in Section 13.3.
ARTICLE 14
----------
PARTICIPATION BY OTHER EMPLOYERS
--------------------------------
Section 14.1. Adoption of Plan. With the consent of the Company, any
entity may become a participating Employer under the Plan by (a) taking such
action as shall be necessary to adopt the Plan and (b) executing and delivering
such instruments and taking such other action as may be necessary or desirable
to put the Plan and Trust into effect with respect to such entity, as prescribed
by the Company.
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Section 14.2. Exclusion from Participation. The Company may, by
written instrument, exclude an Employer from continued participation in the
Plan. An entity that is an Employer may withdraw from participation in the Plan
at any time by taking appropriate action as prescribed by the Company. Upon the
effective date of an entity's exclusion or withdrawal from participation in the
Plan pursuant to this Section, such entity shall thereupon cease to be an
Employer.
Section 14.3. Company as Agent for Employers. Each entity which
becomes a participating Employer pursuant to Section 14.1 or Section 14.4 by so
doing shall be deemed to have appointed the Company its agent to exercise on its
behalf all of the powers and authorities hereby conferred upon the Company by
the terms of the Plan, including, but not by way of limitation, the power to
amend and terminate the Plan. The authority of the Company to act as such agent
shall continue until such Employer is excluded or withdraws from the Plan.
Section 14.4. Successor Employer. In the event that any Employer is
reorganized by way of merger, consolidation, transfer of assets or otherwise, so
that another corporation other than an Employer succeeds to all or substantially
all of such Employer's business, and such successor corporation is an Affiliate,
such successor corporation automatically shall be substituted for such Employer
under the Plan, unless such Employer or successor corporation is removed by the
Company or withdraws from participation in the Plan as an Employer. The
substitution of such a successor corporation for an Employer hereunder
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shall be reflected on Exhibit A to the Plan; provided that failure to update
such Exhibit shall not affect the effectiveness of any such substitution.
ARTICLE 15
----------
MISCELLANEOUS
-------------
Section 15.1. Expenses. The Trustee is authorized and directed to pay
from the Trust Fund all costs and expenses incurred in establishing and
administering the Plan, including the expenses of the Committee, the fees of
counsel and any agents for the Committee, the fees and expenses of the Trustee,
the fees of counsel for the Trustee, and other administrative expenses to the
extent such expenses are not paid by the several Employers, provided that no
payment may be made from the Trust Fund which would adversely affect the
qualification of the Plan. The Trustee may pay such costs and expenses directly
or may reimburse the Employers therefor. The Committee, in its sole discretion,
having regard to the nature of a particular expense, shall determine the
portion, if any, of such expense that is to be borne by a particular Employer,
or by the Members of the Plan as a whole.
Section 15.2. Non-Assignability. Subject to Section 10.8 relating to
qualified domestic relations orders, and except as otherwise provided by section
401(a)(13) of the Code, it is a condition of the Plan, and all rights of each
Member and any other person shall be subject thereto, that no right or interest
of any Member or any other person in the Plan shall be
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<PAGE>
assignable or transferable in whole or in part, either directly or by operation
of law or otherwise, including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge or bankruptcy, but excluding devolution by death
or mental incompetency, and no right or interest of any Member or any other
person in the Plan shall be liable for, or subject to, any obligation or
liability of such Member or other person, including, without limitation, claims
for alimony or the support of any spouse or child.
Section 15.3. Employment Non-Contractual. The Plan confers no right
upon any Employee to continue in employment with any Employer.
Section 15.4. Limitation of Rights. No Member, Beneficiary or any
other person shall have any right, title or claim in or to any specific asset of
the Trust, but shall have the right only to distributions from the Trust Fund on
the terms and conditions herein provided.
Section 15.5. Merger or Consolidation with Another Plan. A merger or
consolidation with, or transfer of assets or liabilities to, any other plan
shall not be effected unless the terms of such merger, consolidation or transfer
are such that each Member or Beneficiary entitled to receive benefits from the
Plan would receive a benefit immediately after the merger, consolidation or
transfer if the Plan were then immediately terminated which is equal to or
greater than the benefit such person would have been entitled to receive if the
Plan had terminated immediately before the merger, consolidation or transfer.
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Section 15.6. Gender and Plurals. Wherever used in the Plan, words
in the masculine gender shall include masculine or feminine gender, and, unless
the context otherwise requires, words in the singular shall include the plural,
and words in the plural shall include the singular.
Section 15.7. Governing Law. To the extent not governed by ERISA,
this Plan shall be governed by the internal laws of the State of Illinois.
Section 15.8. Elections Made Through Telephone Information System.
References in this Plan to elections to be made in writing by Members may be
made through an automated telephone information system in accordance with the
written rules and conditions provided by the Committee or by one or more
alternative methods in the form prescribed by the Committee for such purpose.
ARTICLE 16
----------
COMPANY ACTION
--------------
Except as provided in Section 18.2 of the Plan related to termination
of the Plan, any action to be taken under this Plan by the Company may be taken
by the Chief Executive Officer of the Company; the Senior Vice President, Human
Resources of the Company; the Vice President, Compensation and Employee Benefits
of the Company; or any
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other officer designated by the board of directors of the Company for this
purpose (including any successor to any of the foregoing officers who performs
substantially similar duties but who is assigned a different title by the
Company), each of which is authorized to take action on behalf of the Company
hereunder.
ARTICLE 17
----------
TOP-HEAVY PLAN REQUIREMENTS
---------------------------
Section 17.1. Top-Heavy Plan Determination. If as of the
Determination Date (as hereinafter defined) for any Plan Year the aggregate of
(a) the sum of the account balances under this Plan and all other defined
contribution plans in the Aggregation Group (as hereinafter defined), and (b)
the present value of accrued benefits under all defined benefit plans in such
Aggregation Group of all participants in such plans who are key employees (as
defined in section 416(i) of the Code) for such Plan Year exceeds 60% of the
aggregate of the account balances and present value of accrued benefits of all
participants in such plans, then this Plan shall be a top-heavy plan for such
plan year, and the requirements of Sections 17.2 and 17.3 shall be applicable
for such Plan Year as of the first day thereof.
The Aggregation Group shall consist of (a) each plan of an Employer in
which a key employee is a participant, (b) each other plan which enables such a
plan to be qualified
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under section 401(a) of the Code, and (c) any other plans of an Employer which
the Employer shall designate as part of the Aggregation Group.
For purposes of this Article, (i) the Determination Date for all plans
in the Aggregation Group shall be the last day of the preceding Plan Year, and
(ii) the valuation date applicable to a Determination Date shall be (a) in the
case of a defined contribution plan, the date as of which account balances are
determined which is coincident with or immediately precedes the Determination
Date, and (b) in the case of a defined benefit plan, the date as of which the
most recent actuarial valuation for the plan year which includes the
Determination Date is prepared, except that if any such plan specifies a
different Determination Date or valuation date, such different date shall be
used with respect to such plan. For the purpose of determining the accrued
benefit or account balance of a participant, any person who received a
distribution from a plan in the Aggregation Group during the 5-year period
ending on the last day of the preceding Plan Year shall be treated as a
participant in such plan, and any such distribution shall be included in such
participant's account balance or accrued benefit as the case may be.
Section 17.2. Minimum Contribution for Top-Heavy Years. If this Plan
is determined to be a top-heavy plan for a Plan Year, the sum of the Employer
contributions under Article 4 allocated to the Accounts of a Member for such
Plan Year shall in no event be less than the lesser of (i) 3% of such Member's
compensation (as defined under section 415 of the Code) during such Plan Year
and (ii) the highest percentage at which contributions are
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made on behalf of any key employee (as defined in section 416(i) of the Code)
for such Plan Year. If during any Plan Year for which this Section is applicable
a defined benefit plan is included in the Aggregation Group and such defined
benefit plan is a top-heavy plan for such Plan Year, the percentage set forth in
clause (i) above shall be 5%. The percentage referred to in clause (ii) of the
first sentence of this Section shall be obtained by dividing the aggregate of
Employer contributions made pursuant to Article 4 and pursuant to any other
defined contribution plan which is required to be included in the Aggregation
Group (other than a defined contribution plan which enables a defined benefit
plan which is required to be included in the Aggregation Group to be qualified
under section 401(a) of the Code) during the Plan Year on behalf of such key
employee by such key employee's compensation (as defined in section 415 of the
Code) for the Plan Year.
Section 17.3. Special Rules for Applying Section 415 Limits. The
provisions of this Section shall apply only in Plan Years beginning prior to
January 1, 2000.
(a) In any Plan Year for which the Plan is a top-heavy plan, Section
5.1 shall be applied by substituting "100%" for "125%" appearing therein,
unless, for such Plan Year, (i) the percentage of Account balances of
Members who are key employees determined under Section 17.1 does not exceed
90%, and (ii) Employer contributions allocated to the accounts of Members
who are not key employees equals at least 4% of the compensation (as
defined in section 415 of the Code) of each such Member.
(b) In any Plan Year for which the Plan is a top-heavy plan, Section
5.1 shall be applied by substituting "100%" for "125%" appearing therein
unless for such Plan Year (i) the percentage of accrued benefits of Members
who are key employees does not exceed 90%, and (ii) the minimum accrued
benefit of each Member under all defined benefit plans in the Aggregation
Group is at least 3% of his average compensation (determined under section
416 of the Code) multiplied by each year of service after 1983, not in
excess of 10, for which such plans are top-heavy plans.
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ARTICLE 18
----------
AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN AND TERMINATION
---------------------------------------------------------
Section 18.1. Amendment. The Company may at any time and from time
to time amend, suspend or modify the Plan, in whole or in part, by written
instrument duly adopted by (i) the board of directors of the Company, (ii) the
Chief Executive Officer of the Company, (iii) the Senior Vice President, Human
Resources of the Company, (iv) the Vice President, Compensation and Benefits of
the Company, or (v) any other officer of the Company designated by the board of
directors for this purpose (including any successor to any of the foregoing
officers who performs substantially similar duties but who is assigned a
different title by the Company), if the Company's board of directors has
delegated to such officer or officers the authority to execute such amendments.
Any such amendment, suspension or modification shall become effective on such
date as the board of directors of the Company or such officer, as the case may
be, shall determine, and may apply retroactively or prospectively to Members and
Beneficiaries at the time thereof, as well as to future Members and
Beneficiaries.
Section 18.2. Termination of the Plan. Any Employer may at any time
terminate its participation in the Plan by taking appropriate action prescribed
by the Company, and the Company may terminate this Plan in its entirety with
respect to all Employers by resolution of its board of directors to that effect.
In the event of any such termination, the Committee shall determine the portion
of the Trust Fund held by the Trustee which is
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applicable to the Members (and Beneficiaries thereof) employed by such Employer
or Employers and direct the Trustee to distribute such portion to such Members
and Beneficiaries ratably in proportion to the values of their respective
Accounts.
Section 18.3. Trust to Be Applied Exclusively for Members and Their
Beneficiaries. Subject only to Sections 4.4, 15.1 and 18.2, it shall be
impossible for any part of the Trust Fund to be used for or diverted to any
purpose not for the exclusive benefit of Members and their Beneficiaries either
by operation or termination of the Plan, power of amendment or other means.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer on this 29th day of December, 1997.
R. R. DONNELLEY & SONS COMPANY
By: _________________________________
Vice President, Compensation and
Employee Benefits
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EXHIBIT A
I. List of Employers Participating in Plan.
---------------------------------------
1. R. R. Donnelley Norwest, Inc.
2. R. R. Donnelley Printing Company.
3. R. R. Donnelley Printing Company, L.P.
4. R. R. Donnelley Mendota, Inc.
5. R. R. Donnelley Seymour, Inc.
6. Haddon Craftsmen, Inc. (excluding certain groups of employees, as described
below)
7. Coris, Inc.
8. Housenet, Inc.
9. R. R. Donnelley Receivables, Inc.
II. List of Excluded Groups and Classes of Employees.
------------------------------------------------
1. For Plan Years prior to January 1, 1998, employees of the R C Freightways
division of the Company.
2. For Plan Years prior to January 1, 1998, all employees of Haddon Craftsmen,
Inc. other than individuals employed at its Bloomsburg facility; and on and
after January 1, 1998, all collectively bargained employees of Haddon
Craftsmen, Inc., other than individuals employed at its Bloomsburg
facility.
A-1
<PAGE>
FIRST SUPPLEMENT
TO THE
DONNELLEY DEFERRED COMPENSATION AND
VOLUNTARY SAVINGS PLAN
-----------------------------------------
The terms of this Supplement set forth the terms and conditions under
which matching contributions will be made under Section 4.3(a) of the Plan.
1. Rate of Matching Contributions. Subject to the limitations of
Section 4.4 and Article 5, the Company shall make on behalf of any Member who
has elected to make deferred compensation contributions pursuant to Section
4.1(a), matching contributions equal to 50% of the first 2% of such Member's
Compensation which such Member elects to have contributed to the Plan pursuant
to Section 4.1(a). A Member shall be eligible to receive matching contributions
commencing with the first pay period which commences in the calendar month which
begins with or next follows the first anniversary of the date of the Member's
most recent date of hire by an Employer.
2. Form of Matching Contributions. To the extent available, all
matching contributions made pursuant to Section 4.3(a) shall be made in the form
of shares of Company Stock or in cash which the Trustee shall apply to purchase
Company Stock, all as more particularly set forth below. From the time a Member
becomes eligible for Matching Contributions under item 1 above, each time such
Member makes a deferred compensation contribution pursuant to Section 4.1(a),
such Member shall accrue a right to a corresponding matching contribution
subject to the limitation on the amount of such matching contributions
S1-1
<PAGE>
prescribed by item 1. All matching contributions shall be funded by the Company
no later than the last day of the month following the month in which a Member's
right to such matching contributions arises. To fund matching contributions, the
Company shall either (i) contribute shares of Company Stock then held by the
Company as treasury stock with a Fair Market Value (as hereinafter defined)
equal to the aggregate amount of matching contributions to be made to the Plan
for that month, or (ii) contribute an amount of cash equal to the sum of such
Matching Contributions, which the Trustee shall apply to purchase Company Stock
as soon after receipt as is practicable. For purposes of the preceding sentence,
"Fair Market Value" shall be the average of the high and low transaction prices
(as reported in the New York Stock Exchange-Composite Transactions) in trading
of Company Stock on the 20th day of the month in which the Matching Contribution
is funded, or if the 20th day of the month is not a trading day, the trading day
next following the 20th day of such month. Company Stock which is purchased by
the Trustee shall either be purchased on a national securities exchange, or
elsewhere, by a person who is a broker or dealer registered under Section 15 of
the Securities Exchange Act of 1934, as amended, who also shall be an "agent
independent of the issuer" as defined in Rule 10b-18(a)(6) under such Act.
Any cash dividends paid with respect to shares of Company Stock
credited to a Member's Matching Account shall be applied to purchase additional
shares of Company Stock or invested in such other manner as the Company may
prescribe. Such additional shares of Company Stock purchased pursuant to the
foregoing sentence shall either be purchased on a national securities exchange,
or elsewhere, by a person who is a broker or dealer registered
S1-2
<PAGE>
under Section 15 of the Securities Exchange Act of 1934, as amended, who also
shall be an "agent independent of the issuer" as defined in Rule 10b-18(a)(6)
under such Act.
3. Effective Date. This Supplement shall be effective as of the
date determined by the Chief Executive Officer of the Company; provided,
however, that in the event that the Chief Executive Officer of the Company does
not determined such a date, this Supplement shall not take effect.
S1-3
<PAGE>
R. R. DONNELLEY & SONS COMPANY
APPROVAL
BY
SENIOR VICE PRESIDENT, HUMAN RESOURCES
ADOPTING
AMENDMENT NUMBER ONE
to the
September 1, 1997 RESTATEMENT
------------------------------
of the
DONNELLEY DEFERRED COMPENSATION AND
-----------------------------------
VOLUNTARY SAVINGS PLAN
----------------------
Pursuant to Section 3.12 of the By-Laws of R. R. Donnelley & Sons Company (the
"Company") and authority delegated pursuant thereto by the Human Resources
Committee of the Board of Directors of the Company, the undersigned Senior Vice
President, Human Resources (the "Senior Vice President") hereby adopts the
document attached hereto entitled "Amendment Number One to the September 1, 1997
Restatement of the Donnelley Deferred Compensation and Voluntary Savings Plan."
Executed by the Senior Vice President this 20th of November, 1998.
/s/ Haven E. Cockerham
---------------------------
Haven E. Cockerham
Senior Vice President, Human Resources
<PAGE>
R. R. DONNELLEY & SONS COMPANY
AMENDMENT NUMBER ONE
--------------------
to the
September 1, 1997 RESTATEMENT
------------------------------
OF THE
DONNELLEY DEFERRED COMPENSATION AND
-----------------------------------
VOLUNTARY SAVINGS PLAN
----------------------
(Effective September 15, 1998)
Modifying the Definition of "Mendota Member" in Connection with the
-------------------------------------------------------------------
Merger of the Remaining Portion of the Mendota Profit Sharing Plan into the
---------------------------------------------------------------------------
Donnelley Savings Plan
----------------------
WHEREAS, R. R. Donnelley & Sons Company (the "Company") maintains for the
benefit of certain of its employees, and certain employees of its participating
subsidiaries, the Donnelley Deferred Compensation and Voluntary Savings Plan
(the "Savings Plan");
WHEREAS, R. R. Donnelley Mendota, Inc. ("Mendota") maintains for the benefit of
certain of its employees the R. R. Donnelley Mendota, Inc. Profit Sharing Plan
("the Mendota Plan");
WHEREAS, the portion of the assets of the Mendota Plan attributable to Mendota's
non-collectively-bargained employees was transferred to the Savings Plan on June
30, 1994;
WHEREAS, Mendota's employees who were collectively bargained continued to be
eligible to participate in the Mendota Plan after such date;
WHEREAS, Mendota has been a participating Employer in the Savings Plan since
July 1, 1994;
WHEREAS, employees of Mendota who were non-collectively-bargained have been
eligible to participate in the Savings Plan since July 1, 1994;
WHEREAS, in connection with the decertification of the bargaining unit covering
Mendota's collectively-bargained employees, the Savings Plan was amended to
allow such employees to participate in the Savings Plan effective January 1,
1997;
WHEREAS, the Mendota Plan has been frozen since January 1, 1997 so that no
employees have been eligible to participate in the Mendota Plan since that date;
WHEREAS, contemporaneously herewith, the Company and Mendota have merged the
remaining portion of the Mendota Plan (which is attributable to employees who
were formerly collectively bargained) into the Savings Plan (the "Merger");
WHEREAS, the Company desires to amend the Savings Plan to modify the definition
of "Mendota Member" in connection with the Merger;
WHEREAS, Section 18.1 of the Savings Plan reserves to the Company the right to
amend the Savings Plan; and
<PAGE>
WHEREAS, Article 16 of the Savings Plan permits any action to be taken by the
Company under the Savings Plan (except termination of the Savings Plan),
including the amendment thereof, to be taken by the Company's Senior Vice
President, Human Resources.
NOW, THEREFORE, pursuant to the power of amendment in Section 18.1 of the
Savings Plan, Section 2(19) of the Savings Plan is amended effective September
15, 1998, to add the phrase ", and as a result of the merger of the remaining
portion of such plan into this Plan effective as of September 15, 1998" at the
end thereof.
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<PAGE>
R.R. DONNELLEY & SONS COMPANY
APPROVAL
BY
VICE PRESIDENT, COMPENSATION AND EMPLOYEE BENEFITS
ADOPTING
AMENDMENT NUMBER TWO
to the
September 1, 1997 RESTATEMENT
------------------------------
of the
DONNELLEY DEFERRED COMPENSATION AND
-----------------------------------
VOLUNTARY SAVINGS PLAN
----------------------
Pursuant to Section 3.12 of the By-Laws of R.R. Donnelley & Sons Company (the
"Company") and authority delegated pursuant thereto by the Human Resources
Committee of the Board of Directors of the Company, the undersigned Vice
President, Compensation and Employee Benefits (the "Vice President") hereby
adopts the document attached hereto entitled "Amendment Number Two to the
September 1, 1997 Restatement of the Donnelley Deferred Compensation and
Voluntary Savings Plan."
Executed by the Vice President this 13th of April, 1999.
/s/ Jack J. McEnery
____________________________________
Jack J. McEnery
Vice President, Compensation and Employee Benefits
<PAGE>
R.R. DONNELLEY & SONS COMPANY
AMENDMENT NUMBER TWO
--------------------
to the
September 1, 1997 Restatement
of the
DONNELLEY DEFERRED COMPENSATION AND
-----------------------------------
VOLUNTARY SAVINGS PLAN
----------------------
Providing for Use of Current Year Testing Method for Purposes of Applying
Nondiscrimination Tests,
Modifying Rules Relating to Cash-Out of Small Account Balances
and Liberalizing Certain Provisions in the Plan Relating to Plan Loans and
Withdrawals
WHEREAS, the R.R. Donnelley & Sons Company (the "Company") maintains for the
benefit of certain of its employees and certain employees of its participating
subsidiaries the Donnelley Deferred Compensation and Voluntary Savings Plan (the
"Plan");
WHEREAS, the Plan provides for a cash or deferred arrangement described in
section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code") and
also provides for after-tax employee contributions and matching contributions
subject to the rules of section 401(m) of the Code;
WHEREAS, the Plan must satisfy the nondiscrimination rules under sections
401(k)(3) and 401(m) of the Code;
WHEREAS, the Small Business Job Protection Act of 1996 ("SBJPA") amended
sections 401(k)(3) and 401(m) of the Code effective for plan years commencing on
or after January 1, 1997 to provide that, in applying such nondiscrimination
tests, a plan sponsor can use data from either the prior plan year (the "prior
year testing method") or the current plan year (the "current year testing
method");
WHEREAS, IRS Notice 98-1 provides that a plan sponsor must set forth in the plan
document whether the prior year testing method or the current year testing
method will apply, and also provides that any amendment providing for a change
in the testing method may be made during the remedial amendment period for
making changes required by the SBJPA, as described in Revenue Procedure 97-41
(generally, this period ends on the last day of the 1999 plan year);
<PAGE>
WHEREAS, Section 5.2 of the Plan currently provides for use of the prior year
testing method but the Company has determined that it desires to use the current
year testing method for the 1997 plan year and expects to use such testing
method for subsequent plan years as well;
WHEREAS, in accordance with Treasury Decision 8794, the Company desires to
simplify the rules relating to the cash-out of small account balances under the
Plan; and
WHEREAS, the Company desires to implement certain other changes to the Plan (i)
to allow distributions from a "Member's" "DCS\401(k) Account" and his "Rollover
Account" even if such Member has an outstanding loan under the Plan, and (ii) to
allow "Mendota Members," "Metromail Members" and "Meredith\Burda Members" to
make partial withdrawals after termination of employment.
NOW, THEREFORE, pursuant to the power of amendment in Section 18.1 of the Plan,
the Plan is amended in the following respects:
1. Application of Current Year Testing Method for Discrimination Testing.
Effective January 1, 1997, paragraphs (3) and (6) of Section 5.2(d) of the Plan
are amended (i) to substitute the word "are" for the word "were" each place such
word appears therein, and (ii) to delete the word "prior" each place such word
appears therein.
2. Modification of Cash-Out Rule for Small Account Balances. Effective March
31, 1999, Section 10.2 is amended (i) to substitute the phrase "Article 9" for
the phrase "this Section" as it appears in the first sentence thereof, and (ii)
to delete the last sentence thereof.
3. Liberalization of Certain Loan and Withdrawal Rules. Effective January 1,
1999, the Plan is amended in the following respects:
a. Loan Restrictions. Paragraph (5) of Section 8.4(b) of the Plan is
deleted, and each subsequent paragraph (and each reference thereto) is
renumbered accordingly.
b. Post-Termination Partial Withdrawals. Section 9.1(d) is amended to
delete the parenthetical phrase "(other than a Mendota Member, a Metromail
Member or a Meredith/Burda Member)" as it appears therein.
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