As filed with the Securities and Exchange Commission on March 19, 1999
Registration Number 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
--------------------
OMNICOM GROUP INC.
(Exact name of registrant as specified in its charter)
New York 13-1514814
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
437 Madison Avenue
New York, New York 10022
(Address of Principal Executive Offices) (Zip Code)
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
(Full title of the plan)
Barry J. Wagner, Esq.
Secretary and General Counsel
Omnicom Group Inc.
437 Madison Avenue
New York, New York 10022
(212) 415-3600
(Name, address and telephone number,
including area code, of agent for service)
--------------------
Copies to:
Linda E. Ransom, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
(212) 259-6570
--------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed
Title of Proposed Maximum
Securities to Maximum Aggregate Amount of
be Registered Amount to be Offering Price Offering Registration
(1) Registered Per Share(2) Price(2) Fee(2)
- --------------------------------------------------------------------------------
Common Stock of
Omnicom Group
Inc., par value
$.50 per share .. 500,000 $69.90625 $34,953,125 $9,716.97
================================================================================
(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 or sold pursuant to the
employee benefit plan described herein.
(2) Estimated for the sole purpose of computing the registration fee. Pursuant
to Securities Act Rules 457(c) and (h), the proposed maximum offering
price per share is calculated as the average of the high and low prices,
reported by the New York Stock Exchange, Inc., of the common stock of the
registrant as of March 15, 1999.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents have been filed by Omnicom Group Inc. (the
"Company") (File No. 1-10551) with the Securities and Exchange Commission (the
"Commission") and are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998;
(c) the Company's Current Reports on Form 8-K dated January 20, 1998,
March 4, 1998 and March 6, 1998; and
(d) the description of the Company's Common Stock contained in the
Registration Statement filed pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and any amendment or report filed for purposes of updating that
description.
All documents filed by the Company or the Ross Roy Communications,
Inc. Employee Savings and Investment Plan and Trust (the "Plan") with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act
subsequent to the date of this Registration Statement and prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be part
hereof from the date of filing of such documents. Any statement contained in any
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to constitute
a part of this Registration Statement.
The consolidated financial statements and financial statement
schedules of the Company and its subsidiaries included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 have been
incorporated herein by reference in reliance on the reports, also incorporated
herein by reference, of Arthur Andersen LLP, independent certified public
accountants, given on their authority as experts in auditing and accounting.
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Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation contains a provision
limiting the liability of directors (except for approving statutorily prohibited
dividends, share repurchases or redemptions, distributions of assets on
dissolution or loans to directors) to acts or omissions in bad faith, involving
intentional misconduct or a knowing violation of the law, or resulting in
personal gain to which the director was not legally entitled. The Company's
By-Laws provide that an officer or director will be indemnified against any
costs or liabilities, including attorneys fees and amounts paid in settlement
with the consent of the Company in connection with any claim, action or
proceeding to the fullest extent permitted by the New York Business Corporation
Law.
Section 722(a) of the New York Business Corporation Law provides
that a corporation may indemnify any officer or director made, or threatened to
be made, a party to an action other than one by or in the right of the
corporation, including an action by or in the right of any other corporation or
other enterprise which any director or officer of the corporation served in any
capacity at the request of the corporation, because he was a director or officer
of the corporation, or served such other corporation or other enterprise in any
capacity, against judgments, fines, amounts paid in settlement and reasonable
expenses, including attorney's fees actually and necessarily incurred as a
result of such action, or any appeal therein, if such director or officer acted,
in good faith, for a purpose which he reasonably believed to be in, or in the
case of service for any other corporation or other enterprise, not opposed to,
the best interests of the corporation and, in criminal actions, in addition, had
no reasonable cause to believe that his conduct was unlawful.
Section 722(c) of the New York Business Corporation Law provides
that a corporation may indemnify any officer or director made, or threatened to
be made, a party to an action by or in the right of the corporation by reason of
the fact that he is or was an officer or director of the corporation, or is or
was serving at the request of the corporation as a director or officer of any
other corporation, or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him in connection with the defense or settlement of such action, or
in connection with an appeal therein, if such director or officer acted, in good
faith, for a purpose which he reasonably believed to be in, or, in the case of
service for another corporation or other enterprise, not opposed to, the best
interests of the corporation. The corporation may not, however, indemnify any
officer or director pursuant to Section 722(c) in respect of (1) a threatened
action, or a pending action which
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is settled or otherwise disposed of, or (2) any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation,
unless and only to the extent that the court in which the action was brought or,
if no action was brought, any court of competent jurisdiction, determines in its
discretion, that the person is fairly and reasonably entitled to indemnity for
such portion of the settlement and expenses as the court deems proper.
Section 723 of the New York Business Corporation Law provides that
an officer or director who has been successful on the merits or otherwise in the
defense of a civil or criminal action of the character set forth in Section 722
is entitled to indemnification as permitted in such section. Section 724 of the
New York Business Corporation Law permits a court to award the indemnification
required by Section 722.
The Company has entered into agreements with its directors to
indemnify them for liabilities or costs arising out of any alleged or actual
breach of duty, neglect, errors or omissions while serving as a director. The
Company also maintains and pays premiums for directors' and officers' liability
insurance policies.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Number Description
-------------- -----------
4.1 Ross Roy Communications, Inc. Employee Savings and
Investment Plan and Trust.
4.2 Trust Agreement.
5 Opinion and Consent of Dewey Ballantine LLP.
23.1 Consent of Dewey Ballantine LLP (included in Exhibit 5
hereto).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on Signature Page).
The Company has caused or will cause the Plan and any amendment
thereto to be submitted to the Internal Revenue Service ("IRS") in a timely
manner and has caused or will cause to be made all changes required by the IRS
in order to qualify such plan.
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<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;
(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
(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
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director,
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<PAGE>
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act
of 1933, as amended, 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 New York, State of New
York, on March 19, 1999.
OMNICOM GROUP INC.
By: /s/ John Wren
------------------------------------
John Wren
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the date indicated. Each person whose signature appears
below does hereby constitute and appoint John Wren and Barry J. Wagner, and each
of them, with full powers of substitution, his or her true and lawful
attorneys-in-fact and agents to do any and all acts and things and to execute
any and all instruments which said attorneys-in-fact and agents may deem
necessary or advisable to enable the registrant to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under said Act of shares of Common Stock and interests registered
pursuant hereto, including specifically, but without limitation thereof, power
and authority to sign his or her name, in any and all capacities set forth
beneath his or her name, to any amendment to this Registration Statement in
respect of said shares and interests and to any documents filed as part of or in
connection with said Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys-in-fact and agents shall
do or cause to be done by virtue hereof.
Date: March 19, 1999 By: /s/ John Wren
------------------------------------
John Wren
Chief Executive Officer and Director
(Principal Executive Officer)
Date: March 19, 1999 By: /s/ Randall Weisenburger
------------------------------------
Randall Weisenburger
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Date: March 19, 1999 By: /s/ Philip J. Angelastro
------------------------------------
Philip J. Angelastro
Controller
(Principal Accounting Officer)
Date: March 19, 1999 By: /s/ Bernard Brochand
------------------------------------
Bernard Brochand
Director
Date: March 19, 1999 By: /s/ Robert J. Callander
------------------------------------
Robert J. Callander
Director
Date: March 19, 1999 By: /s/ James A. Cannon
------------------------------------
James A. Cannon
Director
Date: March 19, 1999 By: /s/ Leonard S. Coleman, Jr.
------------------------------------
Leonard S. Coleman, Jr.
Director
Date: March 19, 1999 By: /s/ Bruce Crawford
------------------------------------
Bruce Crawford
Director
Date: March 19, 1999 By: /s/ Susan S. Denison
------------------------------------
Susan S. Denison
Director
Date: March 19, 1999 By: /s/ John R. Murphy
------------------------------------
John R. Murphy
Director
Date: March 19, 1999 By: /s/ John R. Purcell
------------------------------------
John R. Purcell
Director
<PAGE>
Date: March 19, 1999 By: /s/ Keith L. Reinhard
------------------------------------
Keith L. Reinhard
Director
Date: March 19, 1999 By: /s/ Allen Rosenshine
------------------------------------
Allen Rosenshine
Director
Date: March 19, 1999 By: /s/ Gary L. Roubos
------------------------------------
Gary L. Roubos
Director
Date: March 19, 1999 By: /s/ Quentin I. Smith, Jr.
------------------------------------
Quentin I. Smith, Jr.
Director
Date: March 19, 1999 By: /s/ Egon P.S. Zehnder
------------------------------------
Egon P.S. Zehnder
Director
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of
1933, the administrator for the Plan has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Bloomfield Hills, State of Michigan, on March 19, 1999.
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN
AND TRUST
By: /s/ Rita Lindholm
------------------------------------
Name: Rita Lindholm
Title: Executive Vice President
and CFO, Ross Roy
Communications, Inc.
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
-------------- -----------
4.1 Ross Roy Communications, Inc. Employee Savings and
Investment Plan and Trust.
4.2 Trust Agreement.
5 Opinion and Consent of Dewey Ballantine LLP.
23.1 Consent of Dewey Ballantine LLP (included in Exhibit 5
hereto).
23.2 Consent of Arthur Andersen LLP.
24 Power of Attorney (included on Signature Page).
Exhibit 4.1
FIRST AMENDED 1994 RESTATEMENT
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
As Approved by the Internal Revenue Service
Pursuant to a Determination Letter
Dated April 10, 1995
<PAGE>
FIRST AMENDED 1994 RESTATEMENT
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
TABLE 0F CONTENTS
Page
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ARTICLE I - DEFINITIONS .................................................... 1
1.1 Administrator .................................................... 1
1.2 Affiliated Employer .............................................. 1
1.3 Anniversary Date ................................................. 1
1.4 Beneficiary ...................................................... 1
1.5 Code ............................................................. 2
1.6 Combined Account ................................................. 2
1.7 Company .......................................................... 2
1.8 Compensation ..................................................... 2
1.9 Contract or Policy ............................................... 2
1.10 Deferred Compensation ........................................... 2
1.11 Elective Account ................................................ 2
1.12 Elective Contribution ........................................... 2
1.13 Eligible Employee ............................................... 3
1.14 Eligible Participant ............................................ 3
1.15 Employee ........................................................ 3
1.16 Employer ........................................................ 3
1.17 ERISA ........................................................... 3
1.18 Fiduciary ....................................................... 3
1.19 Fiscal Year ..................................................... 3
1.20 401(k) Portion .................................................. 3
1.21 Forfeiture ...................................................... 3
1.22 Former Participant .............................................. 3
1 23 Highly Compensated Employee ..................................... 3
1.24 Highly Compensated Participant .................................. 4
1.25 Hour of Service ................................................. 4
1.26 Investment Manager .............................................. 5
1.27 Late Retirement Date ............................................ 5
1.28 Matching Account ................................................ 5
1.29 Matching Contribution ........................................... 5
1.30 Non-Highly Compensated Participant .............................. 5
1.31 Normal Retirement Age ........................................... 5
1.32 Normal Retirement Date .......................................... 5
1.33 1-Year Break in Service ......................................... 5
1.34 Participant ..................................................... 6
1.35 Participating Employer .......................................... 6
1.36 Plan ............................................................ 6
1.37 Plan Year ....................................................... 6
1.38 Pre-Retirement Survivor Annuity ................................. 6
1.39 Profit Sharing Account .......................................... 6
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1.40 Profit Sharing Contributions .................................... 6
1.41 Profit Sharing Portion .......................................... 6
1.42 Regulation ...................................................... 6
1.43 Retired Participant ............................................. 6
1.44 Retirement Date ................................................. 6
1.45 Social Security Wage Base ....................................... 6
1.46 Suspense Account ................................................ 6
1.47 Terminated Participant .......................................... 6
1.48 Total and Permanent Disability .................................. 7
1.49 Trustee ......................................................... 7
1.50 Trust Fund ...................................................... 7
1.51 Valuation Date .................................................. 7
1.52 Vested .......................................................... 7
1.53 Year of Service ................................................. 7
ARTICLE II - ADMINISTRATION ................................................ 7
2.1 Powers and Responsibilities of the Company ....................... 7
2.2 Assignment and Designation of Administrative Authority ........... 7
2.3 Allocation and Delegation of Responsibilities .................... 8
2.4 Powers and Duties of the Administrator ........................... 8
2.5 Records and Reports .............................................. 8
2.6 Appointment of Advisers .......................................... 8
2.7 Information from Employer ........................................ 8
2.8 Payment of Expenses .............................................. 8
2.9 Majority Actions ................................................. 9
2.10 Claims Procedure ............................................... 9
2.11 Claims Review Procedure ......................................... 9
ARTICLE III - ELIGIBILITY .................................................. 9
3.1 Conditions of Eligibility ........................................ 9
3.2 Application for Participation .................................... 10
3.3 Effective Date of Participation .................................. 10
3.4 Determination of Eligibility ..................................... 10
3.5 Termination of Participation; Transfer of Employment ............. 11
3.6 Omission of Eligible Employee .................................... 11
3.7 Inclusion of Ineligible Employee ................................. 11
3.8 Election not to Participate ...................................... 11
ARTICLE IV - CONTRIBUTIONS AND ALLOCATIONS ................................. 11
4.1 Formula for Determining Employer's Contributions ................. 11
4.2 Elective Contributions ........................................... 12
4.3 Matching Contributions ........................................... 12
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Page
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4.4 Profit Sharing Contributions ..................................... 12
4.5 Time of Payment of Contributions ................................. 12
4.6 Allocation of Contributions, Forfeitures and Earnings ............ 13
4.7 Allocation of Forfeitures ........................................ 14
4.8 Excess Elective Deferrals ........................................ 14
4.9 Actual Deferral Percentage Testing ............................... 15
4.10 Actual Contribution Percentage Test ............................. 16
4.11 Maximum Annual Additions ........................................ 17
4.12 Adjustment for Excessive Annual Additions ....................... 21
4.13 Transfers from Qualified Plans .................................. 21
ARTICLE V - VALUATIONS ..................................................... 22
5.1 Valuation of the Trust Fund ...................................... 22
5.2 Method of Valuation .............................................. 22
5.3 Allocation of Income and Loss .................................... 23
ARTICLE VI - DETERMINATION AND DISTRIBUTION 0F BENEFITS .................... 23
6.1 Determination of Benefits upon Retirement ........................ 23
6.2 Determination of Benefits upon Death ............................. 24
6.3 Determination of Benefits in Event of Disability ................. 24
6.4 Determination of Benefits upon Termination ....................... 24
6.5 Distribution of Benefits ......................................... 27
6.6 Distribution of Benefits upon Death .............................. 29
6.7 Time of Segregation or Distribution .............................. 31
6.8 Distribution for Minor Beneficiary ............................... 31
6.9 Location of Participant or Beneficiary Unknown ................... 31
6.10 Advance Distribution for Hardship ............................... 31
6.11 Alternate Payees; Distribution Expenses ......................... 32
6.12 Direct Transfers of Distributions ............................... 32
6.13 Distribution upon Sale of Subsidiary or Assets .................. 33
ARTICLE VII - TRUST AND INVESTMENT PROVISIONS .............................. 34
7.1 General Investment Provisions .................................... 34
7.2 Investment Powers and Duties of the Trustee ...................... 35
7.3 Other Powers of the Trustee ...................................... 35
7.4 Loans to Participants ............................................ 37
7.5 Duties of the Trustee Regarding Payments ......................... 38
7.6 Trustee's Compensation and Expenses and Taxes .................... 38
7.7 Annual Report of the Trustee ..................................... 38
7.8 Resignation, Removal and Succession of Trustee ................... 39
7.9 Separate Trust Agreement ......................................... 39
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Page
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ARTICLE VIII - AMENDMENT, TERMINATION, AND MERGERS ......................... 39
8.1 Amendment ........................................................ 39
8.2 Termination ...................................................... 40
8.3 Merger or Consolidation .......................................... 40
ARTICLE IX - MISCELLANEOUS ................................................. 40
9.1 Participant's Rights ............................................. 40
9.2 Alienation ....................................................... 40
9.3 Qualified Domestic Relations Orders .............................. 41
9.4 Construction of Plan ............................................. 42
9.5 Gender and Number ................................................ 42
9.6 Legal Action ..................................................... 42
9.7 Prohibition Against Diversion of Funds ........................... 42
9.8 Bonding .......................................................... 42
9.9 Employer's and Trustee's Protective Clause ....................... 42
9.10 Insurer's Protective Clause ..................................... 42
9.11 Receipt and Release for Payments ................................ 43
9.12 Action by the Employer .......................................... 43
9.13 Named Fiduciaries, and Allocation of Responsibility ............. 43
9.14 Headings ........................................................ 43
9.15 Approval by Internal Revenue Service ............................ 43
9.16 Uniformity ...................................................... 43
ARTICLE X - PARTICIPATING EMPLOYERS ........................................ 44
10.1 Adoption by Other Employers ...................................... 44
10.2 Requirements of Participating Employers .......................... 44
10.3 Designation of Agent ............................................. 44
10.4 Employee Transfers ............................................... 44
10.5 Participating Employers Contribution ............................. 44
10.6 Discontinuance of Participation ................................. 45
10.7 Administrator's Authority ........................................ 45
ARTICLE XI - SPECIAL PROVISIONS RELATING TO
THE MERGER 0F THE GRISWOLD PLAN ............................ 45
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ARTICLE XII - TOP-HEAVY PLAN RULES ......................................... 45
12.1 Application of Top-Heavy Plan Rules .............................. 45
12.2 Special Definitions .............................................. 45
12.3 Determination of Top-Heavy Status ................................ 47
12.4 Superseding Rules ................................................ 48
12.5 Participation in More Than One Top-Heavy Plan .................... 49
ARTICLE XIII - SPECIAL PROVISIONS RELATED TO SPINOFF 0F
ANTHONY M. FRANCO, INC .................................... 49
ARTICLE XIV - TRANSFER FROM ROSS ROY, INC. PENSION PLAN .................... 50
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<PAGE>
FIRST AMENDED 1994 RESTATEMENT
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
THIS AGREEMENT, hereby made and entered into this 31st day of January,
1995, by and between Ross Roy Communications, Inc. (herein referred to as the
"Company") and Chris A. Lawson, Rita Lindholm and Tim Copacia (herein
collectively referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company, in predecessor form, heretofore established a Profit
Sharing Plan and Trust effective January 1, 1985, (hereinafter called the
"Effective Date") previously known as the Ross Roy Group Employee Savings and
Investment Plan and Trust, and currently known as Ross Roy Communications, Inc.
Employee Savings and Investment Plan and Trust (herein referred to as the
"Plan") in recognition of the contribution made to its successful operation by
its employees; and
WHEREAS, under the terms of the Plan, the Company has the ability to amend
the Plan, provided the Trustee joins in such amendment if the provisions of the
Plan affecting the Trustee are amended;
WHEREAS, the Plan has been amended and/or restated from time to time, with
the most recent restatement being effective January 1, 1989.
NOW, THEREFORE, the Company and the Trustee, in accordance with the
provisions of the Plan pertaining to amendments thereof, hereby amend and
restate the Plan in its entirety to provide as follows, such amendment and
restatement to be effective as of January 1, 1994 except as otherwise provided
herein. The provisions of this Plan document shall apply to Eligible Employees
of an Employer in current employment on or after such effective date.
ARTICLE I
DEFINITIONS
1.1 "Administrator" means the person or committee designated by the Company
pursuant to Section 2.2 to administer the Plan on behalf of the Employer. If no
person or committee is appointed, the Company shall serve as the Administrator.
1.2 "Affiliated Employer" means the Company and any corporation which is a
member of a controlled group of corporations (as defined in Code Section 414(b))
which include the Company; any trade or business (whether or not incorporated)
which is under common control (as defined in Code Section 414(c)) with the
Company; any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Company; and any other entity required to be aggregated with the Company
pursuant to Regulations under Code Section 414(o). "Affiliated Employer" shall
also include Ross Roy Communications Canada and any corporation or partnership
50% or more of the voting interest of which is owned by the Company.
1.3 "Anniversary Date" means December 31st.
1.4 "Beneficiary" means the person to whom the share of a deceased Participant's
total account is payable, subject to the restrictions of Sections 6.2 and 6.6.
<PAGE>
1.5 "Code" means the Internal Revenue Code of 1986, as amended or replaced from
time to time.
1.6 "Combined Account" means the aggregate of all accounts maintained on behalf
of a Participant, including such Participant's Elective Account, Matching
Account, Profit Sharing Account and Rollover Account, as well as the Voluntary
Contributions Account of such Participant pursuant to Article XI hereof.
1.7 "Company" shall mean Ross Roy Communications, Inc., a corporation with
principal offices in the State of Michigan, or its predecessor or successor.
1.8 "Compensation" with respect to any Participant means such Participant's
regular salary and wages paid by the Employer for a Calendar Year, but excluding
overtime, commissions, bonuses, and any credits to a flexible benefit plan.
Employee Compensation that is deferred pursuant to Section 4.2 shall be included
as Compensation, but other amounts contributed by the Employer under the Plan
and any non-taxable fringe benefits shall not be considered as Compensation.
For purposes of Section 4.9 and Section 4.10, "Compensation" with respect
to any Participant means his Deferred Compensation plus compensation which is
currently includable in gross income as provided for under Code Section 414(s);
provided, however, that, for such purposes, the Administrator may elect to use
any other definition of Compensation permitted by Sections 401(k) and (m) of
the Code and the regulations thereunder.
Effective January 1, 1993, for a Participant's initial year of
participation in either the 401(k) Portion or Profit Sharing Portion of the
Plan, Compensation shall be recognized only for the part of the year in which
the Participant is eligible to participate in that portion of the Plan to which
such Compensation relates (i.e., for purposes of the 401(k) Portion of the
Plan, only Compensation during the part of the year during which the Participant
was eligible to participate in the 401(k) Portion shall be recognized; for
purposes of the Profit Sharing Portion of the Plan, only Compensation during the
part of the year in which the Participant participated in the Profit Sharing
Portion of the Plan shall be recognized).
For Plan Years beginning after December 31, 1993, Compensation in excess
of $150,000 shall be disregarded. Such amount shall be adjusted at the same time
and in such manner as permitted under Code Section 401(a)(17)(B). In
determining the compensation of a Participant for purposes of this limitation,
the rules defining Highly Compensated Employee found in Code Section 414(q)(6)
shall apply, except in applying such rules, the term family member shall include
only the spouse of the Participant and any lineal descendants of the Participant
who have not attained age 19 before the close of the year. If as a result of the
application of such rules the adjusted $150,000 limitation is exceeded, then the
limitation shall be prorated among the affected individuals in proportion to
each such individual's compensation as determined under this Section prior to
the application of this limitation.
1.9 "Contract" or "Policy" means a life insurance policy or annuity contract
(group or individual) issued by the insurer as elected.
1.10 "Deferred Compensation" with respect to any Participant means that portion
of such Participant's total Compensation paid by the Employer for a Calendar
Year that such Participant has elected to defer pursuant to Section 4.2.
1.11 "Elective Account" means the account established and maintained by the
Administrator for each Participant with respect to his total interest in the
Plan and Trust resulting from Elective Contributions.
1.12 "Elective Contribution" means the Employer's contributions to the Plan that
are made pursuant to the Participant's deferral election provided in Section
4.2.
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1.13 "Eligible Employee" means, prior to April 1, 1995, any Employee, other than
a leased employee. On and after April 1, 1995, Eligible Employee means any
Employee who is paid on a salaried basis. Notwithstanding any other provision
hereof, leased employees shall not be eligible to participate in the Plan.
1.14 "Eligible Participant" means a Participant or Former Participant who is
eligible to have allocated to his Profit Sharing Account a share of the
Employer's Profit Sharing Contribution for a given Plan Year. A Former
Participant shall be an Eligible Participant only if his employment terminated
during the Plan Year by reason of retirement, death or Total and Permanent
Disability, regardless of whether or not he completed a Year of Service during
the Plan Year.
1.15 "Employee" means any person who is employed by an Employer, but excludes
any person who is an independent contractor.
1.16 "Employer" means the Company and any Participating Employer, any successor
which shall maintain this Plan, and any predecessor which has maintained this
Plan.
1.17 "ERISA" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.18 "Fiduciary" means any person who (a) exercises any discretionary authority
or discretionary control respecting management of the Plan or exercises any
authority or control respecting management or disposition of its assets, (b)
renders investment advice for a fee or other compensation, direct or indirect,
with respect to any monies or other property of the Plan or has any authority or
responsibility to do so, or (c) has any discretionary authority or discretionary
responsibility in the administration of the Plan, including, but not limited to,
the Trustee and the Administrator.
1.19 "Fiscal Year" means the Company's accounting year of 12 months commencing
on January 1st of each year and ending the following December 31st.
1.20 "401(k) Portion" means the portion of the Plan consisting of and relating
to Elective Contributions made at the election of Participants pursuant to
Section 4.2 and Matching Contributions made pursuant to Section 4.3, but shall
not include the portion of the Plan relating to Profit Sharing Contributions
made pursuant to Section 4.4.
1.21 "Forfeiture" means that portion of a Participant's Profit Sharing Account
that is not Vested, and which becomes forfeited on the earlier of:
(a) the distribution of the entire Vested portion of a Participant's
Profit Sharing Account, or
(b) the last day of the Plan Year in which the Participant incurs five (5)
consecutive 1-Year Breaks in Service.
1.22 "Former Participant" means a person who has been a Participant, but who has
ceased to be a Participant for any reason.
1.23 "Highly Compensated Employee" shall include highly compensated active
employees and highly compensated former employees. A highly compensated active
employee includes any Employee who performs service for the Company during the
determination year and who, during the look-back year: (i) received Compensation
from the Company in excess of $75,000 (as adjusted pursuant to Code Section
415(d)); (ii) received Compensation from the Company in excess of $50,000
(adjusted pursuant to Code Section 415(d)) and was a member of the top-paid
group under Code Section 414(q)(4), for such year; or (iii) was an officer of
the Company and received Compensation during such year that is greater than 50
percent of the dollar limitation in effect under Code Section 415(b)(1)(A). The
term Highly Compensated Employee also includes: (i) an Employee who is described
in the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and that Employee
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is one of the 100 employees who received the most Compensation from the Company
during the determination year; and (ii) Employees who are 5-percent owners at
any time during the look-back year or determination year.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year, unless the Company chooses to make a "calendar year
election" pursuant to Temporary Regulations Section 1.414(q)-1T Q&A-14, in which
case the look-back year shall be the calendar year ending during the
determination year.
A highly compensated former employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination year,
performed no service for the Company during the determination year, and was a
highly compensated active employee for either the separation year or any
determination year ending on or after the employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a family
member of either a 5-percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the 10 most Highly Compensated
Employees ranked on the basis of Annual Compensation paid by the Company during
such year, then the compensation of the family member and the 5-percent owner or
top-ten Highly Compensated Employee shall be aggregated. In such case, the
family member and 5-percent owner or top-ten Highly Compensated Employee shall
be treated as a single Employee receiving Annual Compensation and plan
contributions or benefits equal to the sum of such Annual Compensation and plan
contributions or benefits of the family member and 5-percent owner or top-ten
Highly Compensated Employee. For purposes of this Section, family member
includes the spouse, lineal ascendants and descendants of the Employee or former
Employee and the spouses of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determination of the number and identity of Employees in the top-paid group, the
top 100 Employees, the number of Employees treated as officers and the Annual
Compensation that is considered, will be made in accordance with Section 414(q)
of the Code and the regulations thereunder.
1.24 "Highly Compensated Participant" means any Highly Compensated Employee who
is eligible to participate in the Plan.
1.25 "Hour of Service" means (1) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer for the
performance of duties during the applicable computation period; (2) each hour
for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited under (1)
or (2), as the case may be, and under (3). Hours of Service shall be similarly
credited for employment with an Affiliated Employer.
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust
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fund, or insurer, to which the Employer contributes or pays premiums and
regardless of whether contributions made or due to the trust fund, insurer, or
other entity are for the benefit of particular Employees or are on behalf of a
group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year
of Service, a year of participation for purposes of accrued benefits, a 1-Year
Break in Service, and employment commencement date (or reemployment commencement
date). The provisions of Department of Labor regulations 2530.200b-2(b) and (c)
are incorporated herein by reference.
Notwithstanding the foregoing, any individual employed by an Employer or
an Affiliated Employer whose compensation is not computed on the basis of hours
worked (such as a salaried employee) and who normally performs services during
an entire work day shall be credited with forty-five (45) Hours of Service for
each working week during which he is entitled to receive compensation from the
Employer or Affiliated Employer for the performance of services described in
subsection (1) above or during which such individual performs no duties but is
entitled to Hours of Service under subsections (2) or (3) above.
1.26 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.27 "Late Retirement Date" means the first day of the month coinciding with or
next following a Participant's actual Retirement Date after having reached his
Normal Retirement Date.
1.28 "Matching Account" means the account established and maintained by the
Administrator for each Participant with respect to his total interest in the
Plan and Trust resulting from Matching Contributions.
1.29 "Matching Contribution" means the Employer's contributions to the Plan that
are made pursuant to Section 4.3.
1.30 "Non-Highly Compensated Participant" means any Participant or Former
Participant who is not a Highly Compensated Participant.
1.31 "Normal Retirement Age" means age sixty (60). A Participant shall become
fully Vested in his Profit Sharing Account upon attaining his Normal Retirement
Age.
1.32 "Normal Retirement Date" means the first day of the month coinciding with
or next following the Participant's Normal Retirement Age.
1.33 "1-Year Break in Service" means the applicable computation period during
which an Employee has not completed more than 500 Hours of Service with the
Employer. Further, solely for the purpose of determining whether a Participant
has incurred a 1-Year Break in Service, Hours of Service shall be recognized for
"authorized leaves of absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means an absence from work for
any period by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption of such
child, or any absence for the purpose of caring for such child for a period
immediately following such birth or placement. For this purpose, Hours of
Service shall be credited for the computation period
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in which the absence from work begins, only if credit therefore is necessary to
prevent the Employee from incurring a 1-Year Break in Service, or, in any other
case, in the immediately following computation period. The Hours of Service
credited for a "maternity or paternity leave of absence" shall be those which
would normally have been credited but for such absence, or, in any case in which
the Administrator is unable to determine such hours normally credited, eight (8)
Hours of Service per day. The total Hours of Service required to be credited for
a "maternity or paternity leave of absence" shall not exceed 501.
1.34 "Participant" means any Eligible Employee who commences participation in
the Plan as provided in Sections 3.2 and 3.3, and whose participation in the
Plan has not terminated as provided in Section 3.5.
1.35 "Participating Employer" means any Affiliated Employer that has become a
Participating Employer in accordance with Article X.
1.36 "Plan" means this instrument, including all amendments thereto.
1.37 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.38 "Pre-Retirement Survivor Annuity" means an annuity for the life of the
Participant's spouse the payments under which must be equal to the amount of
benefit which can be purchased with the accounts of a Participant used to
provide the death benefit under the Plan.
1.39 "Profit Sharing Account" means the account established and maintained by
the Administrator for each Participant with respect to his total interest in the
Plan and Trust resulting from the Employer's Profit Sharing Contributions.
1.40 "Profit Sharing Contributions" means the Employer's discretionary
contributions to the Plan made pursuant to Section 4.4.
1.41 "Profit Sharing Portion" means the portion of the Plan relating to Profit
Sharing Contributions made pursuant to Section 4.4.
1.42 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.43 "Retired Participant" means a person who has been a Participant, but who
has retired under Section 6.1 and become entitled to retirement benefits under
the Plan.
1.44 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date or Late Retirement Date (see
Section 6.1).
1.45 "Social Security Wage Base" means the maximum taxable wage base as provided
by the Social Security Act in any given year. This amount is $60,600 for 1994.
1.46 "Suspense Account" means the total forfeitable portion of all Former
Participants' Accounts which has not yet become a Forfeiture during any Plan
Year.
1.47 "Terminated Participant" means a person who has been a Participant, but
whose employment has been terminated other than by death, Total and Permanent
Disability, retirement, or transfer to an Affiliated Employer.
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1.48 "Total and Permanent Disability" means a physical or mental condition of a
Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.49 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.50 "Trust Fund" means the assets of the Plan and Trust as the same shall exist
from time to time.
1.51 "Valuation Date" means the last day of each calendar month and such other
date or dates as the Administrator shall select for purposes of allocation of
contributions, Forfeitures and earnings as provided in Section 4.6. On and after
approximately April 1, 1995, Valuation Date shall mean each normal business day
of the Trustee.
1.52 "Vested" means the portion of a Participant's account or accounts that is
nonforfeitable.
1.53 "Year of Service" means the computation period of twelve (12) consecutive
months, herein set forth, during which an employee has at least 1000 Hours of
Service with an Affiliated Employer. In calculating Years of Service, (i) Hours
of Service prior to the date of adoption of the Plan shall be counted and (ii)
Hours of Service prior to the date upon which an Employer became an Affiliated
Employer shall be counted.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service.
For vesting purposes, the computation period shall be the Plan Year.
ARTICLE II
ADMINISTRATION
2.1 Powers and Responsibilities of the Company.
(a) The Company shall be empowered to appoint and remove the Trustee and
the Administrator from time to time as it deems necessary for the proper
administration of the Plan to assure that the Plan is being operated for the
exclusive benefit of the Participants and their Beneficiaries in accordance with
the terms of the Plan, the Code, and ERISA.
(b) The Company shall periodically review the performance of any Fiduciary
or other person to whom duties have been delegated or allocated by it under the
provisions of this Plan or pursuant to procedures established hereunder. This
requirement may be satisfied by formal periodic review by the Company or by a
qualified person specifically designated by the Company, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.2 Assignment and Designation of Administrative Authority. The Company may
appoint one or more Administrators. Any person, including, but not limited to,
any Employee of an Employer, shall be eligible to serve as an Administrator. Any
person so appointed shall signify his acceptance by filing written acceptance
with the Company. An Administrator may resign by delivering his or her written
resignation to the Company or be removed by the Company by delivery of written
notice of removal, to take effect at a date specified therein, or upon delivery
to the Administrator if no date is specified.
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The Company, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Company does
not appoint an Administrator, the Company will function as the Administrator.
2.3 Allocation and Delegation of Responsibilities. If more than one person is
appointed as Administrator, the responsibilities of each Administrator may be
specified by the Company and accepted in writing by each Administrator. In the
event that no such delegation is made by the Company, the Administrators may
allocate the responsibilities among themselves, in which event the
Administrators shall notify the Company and the Trustee in writing of such
action and specify the responsibilities of each Administrator. The Trustee
thereafter shall accept and rely upon any documents executed by the appropriate
Administrator until such time as the Company or the Administrators file with the
Trustee a written revocation of such designation.
2.4 Powers and Duties of the Administrator. The primary responsibility of the
Administrator is to administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries, subject to the specific terms of the Plan.
The Administrator shall have discretionary authority to interpret and construe
the terms of the Plan and to resolve all issues arising under the Plan. The
discretionary authority of the Administrator shall include the authority to (i)
construe disputed or doubtful terms of the Plan, (ii) determine the eligibility
of an individual to participate in the Plan, (iii) determine the amount, if any,
of benefits to which any Participant, Former Participant or Beneficiary may be
entitled under the Plan, and (iv) resolve all other issues arising under or
relating to the Plan. Any such determination by the Administrator shall be
conclusive and binding upon all persons. The Administrator may establish
procedures, correct any defect, supply any information, or reconcile any
inconsistency in such manner and to such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be done in a
nondiscriminatory manner based upon uniform principles consistently applied and
shall be consistent with the intent that the Plan shall continue to be deemed a
qualified plan under the terms of Code Section 401(a), and shall comply with the
terms of the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his or her duties
under this Plan.
2.5 Records and Reports. The Administrator shall keep a record of all actions
taken and shall keep all other books of account, records, and other data that
may be necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
2.6 Appointment of Advisers. The Administrator, or the Trustee with the consent
of the Administrator, may appoint counsel, specialists, advisers, and other
persons as the Administrator or the Trustee deems necessary or desirable in
connection with the administration of this Plan.
2.7 Information from Employer. To enable the Administrator to perform his or her
functions, the Employer shall supply full and timely information to the
Administrator on all matters relating to the Compensation of all Participants,
their Hours of Service, their Years of Service, their retirement, death,
disability, or termination of employment, and such other pertinent facts as the
Administrator may require; and the Administrator shall advise the Trustee of
such of the foregoing facts as may be pertinent to the Trustee's duties under
the Plan. The Administrator may rely upon such information as is supplied by the
Employer and shall have no duty or responsibility to verify such information.
2.8 Payment of Expenses. All expenses of administration may (but are not
required to) be paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not limited to,
fees of accountants, counsel, and other specialists and their agents, and other
costs of administering the Plan. Until paid, the expenses shall constitute a
liability of the Trust Fund and, if not paid by the Employer, shall be paid from
the Trust Fund.
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2.9 Majority Actions. Except where there has been an allocation and delegation
of administrative authority pursuant to Section 2.3, if there shall be more than
one Administrator, they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.10 Claims Procedure. Claims for benefits under the Plan may be filed with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions to the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.11 Claims Review Procedure. Any Employee, former Employee, or Beneficiary of
either, who has been denied a benefit by a decision of the Administrator
pursuant to Section 2.10 shall be entitled to request the Administrator to give
further consideration to his claim by filing with the Administrator (on a form
which may be obtained from the Administrator) a request for a hearing. Such
request, together with a written statement of the reasons why the claimant
believes his claim should be allowed, shall be filed with the Administrator no
later than 60 days after receipt of the written notification provided for in
Section 2.10. The Administrator shall then conduct a hearing within the next 60
days, at which the claimant may be represented by an attorney or any other
representative of his choosing and at which the claimant shall have an
opportunity to submit written and oral evidence and arguments in support of his
claim. At the hearing (or prior thereto upon 5 business days written notice to
the Administrator) the claimant or his representative shall have an opportunity
to review all documents in the possession of the Administrator which are
pertinent to the claim at issue and its disallowance. A final decision as to the
allowance of the claim shall be made by the Administrator within 60 days of
receipt of the appeal (unless there has been an extension of 60 days due to
special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the 60 day period). Such
communication shall be written in a manner calculated to be understood by the
claimant and shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 Conditions of Eligibility.
(a) Any Eligible Employee most recently hired before March 1, 1993 (or
originally hired before March 1, 1993 and rehired pursuant to Section 3.3(b)(3))
who has reached his 21st birthday and who either (i) has completed three (3)
months of continuous employment and is expected to complete 1,000 Hours of
Service within twelve months after his employment commencement date or (ii) has
completed a Year of Service, shall be eligible to participate hereunder as of
the effective date of participation (as described in Section 3.3) coinciding
with or next following the date he has satisfied such requirements.
(b) Subject to subsection (c) below, any Eligible Employee who is hired or
rehired on or after March 1, 1993 (unless rehired as described in subsection
(a)) shall be eligible to participate hereunder on the effective date of
participation (as described in Section 3.3) coinciding with or next following
the date he or she has completed a Year of Service.
(c) Notwithstanding subsection (b) above, as of April 1, 1995, any
Eligible Employee not already participating in the 401(k) Portion of this Plan
and any newly hired or rehired Eligible Employee shall be eligible to
participate in the 401(k) Portion (but not the Profit Sharing Portion) of this
Plan on April 1, 1995, if such Eligible Employee has completed three months of
service with the Employer. Thereafter, any Eligible Employee not already
participating in the 401(k) Portion of this Plan and any newly hired or rehired
Eligible Employee shall be eligible to participate in the 401(k) Portion (but
not the Profit Sharing Portion) of this Plan on the effective date of
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participation (as described in Section 3.3) coinciding with or next following
the date such Eligible Employee has completed three months of service with the
Employer. For purposes of this section, an Eligible Employee will be deemed to
have completed three months of service if he is in the continuous employ of the
Employer for three months after his or her date of hire. For purposes of this
section, an Employee's date of hire is the date the Employee commences
employment with the Employer.
3.2 Application for Participation. Each Eligible Employee shall make application
to the Employer for participation in the 401(k) Portion of the Plan and shall
agree to the terms hereof. In the event any Eligible Employee otherwise
qualified to become a Participant fails to file such application he shall not be
eligible for Elective or Matching Contributions. Such individual will, however,
be eligible to receive his share of Profit Sharing Contributions once he meets
the requirements in Section 3.1 relating thereto. Upon the acceptance of any
benefits under this Plan, such Employee shall automatically be bound by the
terms and conditions of the Plan and all amendments hereto.
3.3 Effective Date of Participation.
(a) An Eligible Employee shall become a Participant effective as of the
earlier of the January 1 or July 1 coinciding with or next following the date
such Employee meets the eligibility requirement of Section 3.1, provided said
Employee is still employed as of such date. However, a Participant shall not be
entitled to have allocated to his or her Profit Sharing Account any Profit
Sharing Contribution made for any Plan Year prior to the effective date of his
or her participation in the Profit Sharing Portion of the Plan.
(b) Upon the reemployment of any Eligible Employee who had previously been
employed by the Employer, the following rules shall apply in determining his
eligibility to participate in the Plan:
(1) If the reemployed Employee was not a Participant in the Plan
during his prior period of employment but was reemployed
before incurring a 1-year Break in Service, his prior period
of employment shall be included for purposes of determining
his eligibility to participate in the Plan.
(2) If the reemployed Employee was not a Participant in the Plan
during his prior period of employment and incurred a 1-year
Break in Service, he must meet the conditions of eligibility
of Section 3.1 as if he were a new Employee.
(3) If the reemployed Employee was a Participant in the Plan
during his prior period of employment and is reemployed after
incurring consecutive 1-year Breaks in Service equal to the
greater of (i) five or (ii) his credited Years of Service
prior to such break, he must meet the conditions of Section
3.1 as if he were a new Employee.
(4) If the reemployed Employee was a Participant In the Plan
during his prior period of employment and is not described in
paragraph (3) above, he shall be entitled to participate again
in the Plan as of his date of reemployment to the same extent
as during his prior period of employment.
(c) If a Participant receives a hardship distribution, he shall continue
to participate in the Plan for all purposes except that he shall not be entitled
to have Elective Contributions made on his behalf for the period specified in
6.10 and Elective Contributions on his behalf will be limited in the year
following the hardship distribution as provided in 6.10.
3.4 Determination of Eligibility. The Administrator shall determine the
eligibility of each Employee to participate in the Plan based upon information
furnished by the Employer. Such determination shall be conclusive and binding
upon all persons, as long as the same is made pursuant to the Plan and ERISA.
Such determination shall be subject to review per Section 2.10.
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3.5 Termination of Participation; Transfer of Employment. Except as otherwise
provided in this Section 3.5, each Employee shall cease to be a Participant in
the Plan on the date that he ceases, for any reason, to be employed by a
Participating Employer. Notwithstanding the foregoing, (i) an Employee whose
employment terminated during a Plan Year by reason of retirement, death or Total
and Permanent Disability shall be eligible to receive his pro rata share of
Employer Profit Sharing Contributions, if any, for the Plan Year in which such
termination occurs, (ii) a Former Participant who has not received a
distribution of his entire Combined Accounts shall share in the allocation
provided for in Section 5.3 hereof, and (iii) a Participant who transfers
employment from a Participating Employer to an Affiliated Employer that is not a
Participating Employer shall continue to be a Participant but shall not be
eligible to receive any portion of the Employer Elective, Matching or Profit
Sharing Contributions. Specifically, such transfer shall not be treated as a
termination of employment for purposes of Section 6.4, and the Participant shall
not be treated as a Terminated Participant until he or she is no longer employed
by an Affiliated Employer.
3.6 Omission of Eligible Employee. If, in any Fiscal Year, any Employee who
should be included as a Participant in the Profit Sharing Portion of the Plan is
erroneously omitted and discovery of such omission is not made until after a
contribution by his Employer for the year has been made, the Employer shall make
a subsequent Profit Sharing Contribution with respect to the omitted Employee in
the amount which the said Employer would have contributed with respect to him
had he not been omitted. Such contribution shall be made regardless of whether
or not it is deductible in whole or in part in any taxable year under applicable
provisions of the Code.
3.7 Inclusion of Ineligible Employee. If, in any Fiscal Year, any person who
should not have been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be entitled to
recover the contribution made with respect to the ineligible person regardless
of whether or not a deduction is allowable with respect to such contribution. In
such event, the amount contributed with respect to the ineligible person shall
constitute a Forfeiture for the Fiscal Year in which the discovery is made.
3.8 Election not to Participate. Notwithstanding Section 3.2, an Eligible
Employee may, subject to the approval of the Employer, elect voluntarily not to
participate in the Plan. The election not to participate must be communicated to
the Employer in writing at least thirty (30) days before the beginning of a Plan
Year.
ARTICLE IV
CONTRIBUTIONS AND ALLOCATIONS
4.1 Formula for Determining Employer's Contributions. Subject to the limitations
in Sections 4.9 and 4.10, for each Plan Year, each Employer shall contribute to
the Plan on behalf of Participants who are employed by such Employer:
(a) The amount of the total salary reduction elections of such
Participants made pursuant to Section 4.2(a), which amount shall be deemed the
Employer's Elective Contribution, plus
(b) The amount of Matching Contributions, if any, for such Plan Year, as
provided under Section 4.3, plus
(c) If the Participant is a participant in the Profit Sharing Portion of
the Plan, a discretionary amount, if any, for such Plan Year, as provided under
Section 4.4, which amount shall be deemed the Employer's Profit Sharing
Contribution.
(d) Notwithstanding the above, however, the Employer's contributions for
any Plan Year are conditioned upon and shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code Section
404 except that the Employer shall make any contribution required to meet the
top heavy minimum allocation irrespective of whether or not such contribution
exceeds the amount deductible under Code Section 404. All contributions by the
Employer shall be made in cash or in such property as is acceptable to the
Trustee.
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4.2 Elective Contributions.
(a) Each Participant may elect to defer from 1% to 15% of his
Compensation, subject to the limitations of this Section. The amount by which
Compensation is reduced shall be that Participant's Deferred Compensation and be
treated as an Elective Contribution and allocated to that Participant's Elective
Contribution Account.
(b) The balance in each Participant's Elective Contribution Account shall
be fully Vested at all times and shall not be subject to Forfeiture for any
reason.
(c) A Participant's Deferred Compensation made pursuant to this Section
for any taxable year of the Participant shall not exceed the limit imposed by
Code Section 402(g)(1), as indexed pursuant to Section 402(g)(5). The adjusted
limitation shall be effective as of January 1st of each calendar year. In the
event that a Participant elects to defer a percentage of his Compensation that
would result in his exceeding the limitation of this Section 4.2(c) for a
calendar year, the Administrator may require the Participant to reduce his
periodic deferrals to a rate that would result in his making the maximum
permitted deferral on a pro rata basis over the calendar year in question.
(d) In the event that the dollar limitation provided for in Section 4.2(c)
is exceeded, the Administrator shall direct the Trustee to distribute such
excess amount in accordance with Section 4.8.
(e) Elective Contributions made pursuant to this Section may be segregated
into a separate account for each Participant in a federally insured savings
account, certificate of deposit in a bank or savings and loan association, money
market certificate, or other short-term debt security acceptable to the Trustee
until such time as the allocations pursuant to Section 4.6 have been made.
(f) The Employer and the Administrator shall adopt a procedure necessary
to implement the salary reduction elections provided for herein.
4.3 Matching Contributions. Each Employer may make a Matching Contribution on
behalf of each Participant employed by such Employer who makes a salary
reduction election pursuant to Section 4.2. The amount of the Matching
Contribution, if any, on behalf of Participants who are employed by a particular
Employer shall be determined periodically by the Board of Directors of such
Employer based on a percentage of the Deferred Compensation of each Participant
who is entitled to receive a Matching Contribution; provided, however, that the
amount of such Matching Contributions by an Employer for any period shall be
subject to limitations set out in this Article IV. For purposes of such
determination and contribution, Deferred Compensation in excess of 4% of such
Participant's Compensation for the applicable period shall be disregarded.
4.4 Profit Sharing Contributions. Each Employer shall determine the amount, if
any, of any Profit Sharing Contribution that it will make to the Plan. Profit
Sharing Contributions shall be allocated in accordance with Section 4.6(b)(3).
In determining its contribution, each Employer shall be entitled to rely upon an
estimate of the total Compensation for all Participants employed by such
Employer and of the amounts contributable by it. The Employer's determination of
such contribution shall be binding on all Participants, the Employer, and the
Trustee. The Trustee shall have no right or duty to inquire into the amount of
the Employer's contribution or the method used in determining the amount of the
Employer's contribution, but shall be accountable only for funds actually
received by the Trustee.
4.5 Time of Payment of Contributions.
(a) Each Employer shall pay to the Trustee its Matching Contribution and
its Profit Sharing Contribution to the Plan for each Fiscal Year within the time
prescribed by law, including extensions of time, for the filing of the
Employer's federal income tax return for the Fiscal Year.
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(b) The Employer shall pay to the Trustee its Elective Contribution to the
Plan for each Fiscal Year within the time prescribed by law, including extension
for the filing of Employer's federal income tax return for the Fiscal Year;
provided, however, that Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee with reasonable promptness, and in any
event will be paid by the end of the succeeding month following such payroll
deductions.
4.6 Allocation of Contributions, Forfeitures and Earnings.
(a) The Administrator shall establish and maintain accounts in the name of
each Participant to which the Administrator shall credit all amounts allocated
to each such Participant as set forth herein. However, the Administrator may
separately account for that portion of each Participant's Profit Sharing Account
attributable to Top Heavy Plan Years, as described in Article XII.
(b) The Employer shall provide the Administrator with all information
required by the Administrator to make a proper allocation of the Employer's
contributions. Within 45 days after the date of receipt by the Administrator of
such information, the Administrator shall allocate such contribution as follows,
applying the following formulas separately with respect to Employer and the
Participants who are employed by such Employer:
(1) The Employer's Elective Contribution made pursuant to Section
4.1(a) for any period shall be allocated to each Participant's
Elective Account in an amount equal to each such Participant's
Deferred Compensation for the period.
(2) Matching Contributions, if any, made by the Employer pursuant
to Section 4.3 for any period shall be allocated to the
Matching Account of each Participant employed by such Employer
pro-rata based upon his Deferred Compensation for such period,
provided however, that the amount allocated to the Matching
Account of any such Participant shall not exceed 25% of the
Deferred Compensation of such Participant, and provided,
further, that Deferred Compensation in excess of 4% of
Compensation shall be disregarded for purposes of allocating
Matching Contributions.
(3) Each Employer's Profit Sharing Contribution, if any, under
Section 4.4 shall be allocated to the Profit Sharing Account
of each Eligible Participant employed by such Employer as
follows:
(i) first, in the same proportion that such Participant's
Compensation up to the Social Security Wage Base for the
Plan Year bears to the total Compensation up to the
Social Security. Wage Base for such Plan Year of all
Eligible Participants employed by such Employer;
provided, however, that the amounts allocated under this
subparagraph (i) shall not exceed five percent (5%) of
the Participant's Compensation up to the Social Security
Wage Base for the Plan Year (or such lesser percentage
as the applicable Employer shall determine for the Plan
Year, such determination to be made no later than the
date of the Profit Sharing Contribution, if any, of such
Employer for the Plan Year),
(ii) second, in the same proportion that the Compensation in
excess of the Social Security Wage Base for such Plan
Year of such Eligible Participant bears to the total
Compensation for such Plan year in excess of the Social
Security Wage Base of all Eligible Participants employed
by such Employer, provided, however, that the percentage
of the Participants' Compensation in excess of the
Social Security Wage Base allocated under this
subparagraph (ii) for the Plan Year shall not exceed two
times the percentage determined under (i) for the Plan
Year (or such lesser percentage as the applicable
Employer shall determine for the Plan Year), and
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(iii) third, the excess, if any, over amounts described in
subparagraphs (i) and (ii), in the same proportion that
the Compensation for the Plan Year of such Eligible
Participant bears to the total Compensation for the Plan
Year of all Eligible Participants employed by such
Employer.
(c) Any Participant who terminated employment during the Plan Year for
reasons other than death, Total and Permanent Disability or retirement shall not
share in the allocations of (i) the Employer's Profit Sharing Contributions or
(ii) Matching Contributions made subsequent to the date of his or her
termination of employment.
(d) Participants who terminated employment during the Plan Year shall
share in the Elective Contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(e) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his status in the Plan attributable
to post-break service.
4.7 Allocation of Forfeitures. As of each Anniversary Date any amounts which
became Forfeitures since the last Anniversary Date shall first be made available
to reinstate previously forfeited account balances of Former Participants, if
any, in accordance with Section 6.4. Forfeitures will next be used to pay
reasonable expenses of administering the Plan. The remaining Forfeitures, if
any, shall be used to reduce the Employer's Profit Sharing Contribution;
provided, however, that in the event the allocation of Forfeitures provided
herein shall cause the "annual addition" (as defined in Section 4.11) to any
Participant to exceed the amount allowable by the Code, the excess shall be
reallocated in accordance with Section 4.12. During an Employer's existence, the
Forfeitures attributable to Participants of such Employer shall be allocated
separately so that only Participants employed by such Employer shall share
therein. With respect to the Company, Forfeitures are intended to reduce the
contribution contemplated by Section 4.4. If an Employer is dissolved, sold, or
otherwise ceases to have Employees, Forfeitures attributable to Participants of
such Employer shall be used to reduce the Company's Profit Sharing Contribution
for such year as contemplated by Section 4.4. In the event that no Company
Profit Sharing Contribution is made in a given year, Forfeitures which would
otherwise be used to offset Company Profit Sharing Contributions for such year
shall be allocated among the Participants' Accounts in the same manner as a
Company Profit Sharing Contribution of such amount would have been allocated for
such year.
4.8 Excess Elective Deferrals. Notwithstanding any other provision of the Plan,
Excess Elective Deferrals, plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15 to any Participant to whose account
Excess Elective Deferrals were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.
(a) "Elective Deferrals" shall mean any employer contributions made to the
Plan at the election of the Participant, in lieu of cash compensation, and shall
include contributions made pursuant to a salary reduction agreement or other
deferral mechanism. With respect to any taxable year, a Participant's Elective
Deferral is the sum of all employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in Section 401(k) of the Code, any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any employer
contributions made on the behalf of a Participant for the purchase of an annuity
contract under Code Section 403(b) pursuant to a salary reduction agreement.
(b) "Excess Elective Deferrals" shall mean those Elective Deferrals that
are includable in a Participant's gross income under Section 402(g) of the Code
to the extent such Participant's Elective Deferrals for a taxable year
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exceed the dollar limitation under such Code section. Excess Elective Deferrals
shall be treated as annual additions under the Plan.
(c) Excess Elective Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess Elective
Deferrals may be calculated in any manner consistent with applicable
regulations, including, at the election of the Administrator, being calculated
as the sum of: (1) income or loss allocable to the Participant's Elective
Deferral account for the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Elective Deferrals for the year and the
denominator is the Participant's account balance attributable to Elective
Deferrals without regard to any income or loss occurring during such taxable
year; and (2) ten percent (10%) of the amount determined under (1) multiplied by
the number of whole calendar months between the end of the Participant's taxable
year and the date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
4.9 Actual Deferral Percentage Testing. Notwithstanding the terms of Section
4.1, the Average Deferral Percentage ("ADP") for Highly Compensated Participants
shall not exceed the greater of: (i) one hundred twenty-five percent (125%) of
the ADP of Non-Highly Compensated Participants: or (ii) the lesser of two
hundred percent (200%) of the ADP of Non-Highly Compensated Participants, or
such percentage for the Non-Highly Compensated Participants plus two (2)
percentage points.
A Participant's deferral percentage is the ratio of (i) the sum, for the
Plan Year, of the Participant's Deferred Compensation plus any Employer
contributions which are Qualified Matching Contributions (as that term is
defined under the Code) and which are elected by the Employer to be used in ADP
testing divided by (ii) the Participant's Compensation for the Plan Year.
If the ADP of the Highly Compensated Participants would exceed the above
stated limits, the Plan Administrator shall take such action or actions as are
permitted under applicable regulations, which may include reducing the Elective
Contributions for the Highly Compensated Participants to come within the limits
as follows:
(i) The Plan Administrator shall return to that Highly Compensated
Participant who has the highest deferral percentage the
portion of his Deferred Compensation (and income allocable
thereto) which will either enable the Plan to satisfy the ADP
limit stated above or cause such Highly Compensated
Participant's deferral percentage to equal the deferral
percentage of the Highly Compensated Participant with the next
highest deferral percentage.
(ii) The prior process must be repeated until the plan satisfies
the above stated ADP limits.
The amount to be returned to a Highly Compensated Participant should be
returned on or before the 15th day of the third month following the end of the
Plan Year in which the deferral percentage limits were violated (but in all
cases by the end of the Plan Year following the year In which such limits were
violated) and shall include the excess amounts plus the income allocable to such
amounts (through the end of the Plan Year in which the applicable Employee
Contribution was made) as determined by the Plan Administrator in a manner
consistent with regulations promulgated under Code Section 401(k), which are
hereby incorporated by reference. The amount of excess Deferred Compensation to
be distributed hereunder shall be reduced by any Excess Deferrals previously
distributed to the Participant for the Participant's taxable year ending with or
within the Plan Year in accordance with Section 4.8.
In the event that this Plan satisfies the requirements of Code Section
401(k), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section 4.9 shall be applied by
determining the ADP of employees as if all such plans were a single plan.
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For purposes of determining the ADP of a Participant who is a 5-percent
owner or one of the ten most highly-paid Highly Compensated Employees, the ADP
Contributions and Compensation of such Participant shall include the elective
deferrals and Compensation for the Plan Year of Family Members (as defined in
Code section 414(q)(6)). Family Members, with respect to such Highly Compensated
Employees, shall be disregarded as separate employees in determining the ADP
both for Non-Highly Compensated Participants and for Highly Compensated
Participants.
The ADP for any Highly Compensated Participant for the Plan Year and who
is eligible to have ADP Contributions allocated to his or her accounts under two
or more arrangements described in Section 401(k) of the Code, that are
maintained by the Employer, shall be determined as if such elective deferrals
were made under a single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have different
Plan Years, all cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
For purposes of meeting the ADP tests, the Company or the Administrator
may direct that Elective Contributions made on behalf of any Highly Compensated
Employee(s) be ceased or the rate of such contributions reduced at any time
during a Plan Year.
4.10 Actual Contribution Percentage Test. Notwithstanding the above, the average
contribution percentage of the Highly Compensated Participants shall not exceed
the greater of:
(i) 125 percent of the average contribution percentage of the Non-Highly
Compensated Participants; or
(ii) the lesser of 200 percent of the average contribution percentage of
the Non-Highly Compensated Participants or such percentage for the
Non-Highly Compensated Participants plus 2 percentage points, or
such lesser amount determined pursuant to Regulations to prevent the
multiple use of this alternative limitation with respect to any
Highly Compensated Participant, as described in Regulation Section
1.401(m)-2(b), which is incorporated herein by reference.
A Participant's contribution percentage is the ratio of the sum of the
Matching Contributions not used in ADP calculations pursuant to Section 4.9
above for the Plan Year ("ACP Contributions") divided by the Participant's
Compensation for the Plan Year.
If the Plan would otherwise exceed the multiple use alternative
limitation, as described above, then the contribution percentage of Highly
Compensated Employees will be reduced (beginning with the Highly Compensated
Employee whose contribution percentage is the highest), so that the limit will
not be exceeded. The amount of this reduction shall be treated as an excess ACP
Contribution.
If the average contribution percentage of the Highly Compensated
Participants would exceed the above stated limits, the Plan Administrator shall
take such action or actions as are permitted under applicable regulations, which
may include reducing the Matching Contributions for the Highly Compensated
Participants to come within the limits as follows:
(i) The Plan Administrator shall reduce the Matching Contribution
allocated to the Account of that Highly Compensated Participant who
has the highest contribution percentage (and income allocable
thereto) which will either enable the Plan to satisfy the ACP limit
stated above or cause such Highly Compensated Participant's
contribution percentage to equal the contribution percentage of the
Highly Compensated Participant with the next highest contribution
percentage.
(ii) The prior process must be repeated until the plan satisfies the
above stated ACP limits.
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The amount of Matching Contributions to be forfeited with regard to a
Highly Compensated Participant should be forfeited on or before the 15th day of
the third month following the end of the Plan Year in which the contribution
percentage limits were violated (but in all cases by the end of the Plan Year
following the year in which such limits were violated) and shall include the
excess amounts plus the income allocable to such amounts (through the end of the
Plan Year in which the applicable Matching Contribution was made) as determined
by the Plan Administrator in a manner consistent with regulations promulgated
under Code Section 401(m), which are hereby incorporated by reference.
In the event that this Plan satisfies the requirements of Code Section
401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section 4.10 shall be applied by
determining the contribution percentage of employees as if all such plans were a
single plan.
For purposes of determining the contribution percentage of a Participant
who is a 5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the ACP Contributions and Compensation of such Participant shall
include the ACP Contributions and Compensation for the Plan Year of Family
Members (as defined in Code section 414(q)(6)). Family Members, with respect to
such Highly Compensated Employees, shall be disregarded as separate employees in
determining the contribution percentage both for Non-Highly Compensated
Participants and for Highly Compensated Participants.
The contribution percentage for any Highly Compensated Participant and who
is eligible to have ACP Contributions allocated to his or her accounts under two
or more plans described in section 401(a) of the Code, or arrangements
described in section 401(k) of the Code, that are maintained by the Employer,
shall be determined as if such ACP Contributions were made under a single
arrangement. If a Highly Compensated Participant participates in two or more
cash or deferred arrangements that have different plan years, all cash or
deferred arrangements ending with or within the same calendar year shall be
treated as a single arrangement.
For purposes of meeting the ACP tests, the Company or the Administrator
may direct that Matching Contributions for any Highly Compensated Participant be
ceased or the rate of such contributions reduced at any time during a Plan Year.
Forfeitures of excess ACP Contributions shall be applied in the same
manner as Forfeitures under Section 4.6.
4.11 Maximum Annual Additions.
(a) Notwithstanding the foregoing, the maximum "annual additions" credited
to a Participant's accounts for any "limitation year" shall equal the lesser of:
(1) $30,000 (or, if greater, one-fourth of the dollar limitation in effect under
Code Section 415(b)(1)(A)) or (2) twenty-five percent (25%) of the Participant's
"415 Compensation" for such "limitation year".
(b) For purposes of applying the limitations of Code Section 415, "annual
additions" means the sum credited to a Participant's accounts for any
"limitation year" of (1) Employer contributions, (2) Employee contributions, (3)
Forfeitures, (4) amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Code Section 415(1)(2) which is part of a pension
or annuity plan maintained by the Employer and (5) amounts derived from
contributions paid or accrued after December 31, 1985, in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section 419(e))
maintained by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to: (1) any
contribution for medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is otherwise treated as an
"annual addition", or (2) any amount otherwise treated as an "annual addition"
under Code Section 415(1)(1). Notwithstanding the foregoing, for "limitation
years" beginning
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prior to January 1, 1987, only that portion of Employee contributions equal to
the lesser of Employee contributions in excess of six percent (6%) of "415
Compensation" or one-half of Employee contributions shall be considered an
"annual addition".
(c) For purposes of applying the limitations of Code Section 415, the
transfer of funds from one qualified plan to another is not an "annual
addition." In addition, the following are not Employee contributions for the
purposes of Section 4.11(b)(2): (1) rollover contributions (as defined in Code
Sections 402(a)(5), 403(a)(4), 403(b)(8) and 408(d)(3); (2) repayments of loans
made to a Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments
of distributions received by an Employee pursuant to Code Section 411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415, "415
Compensation" shall include the Participant's wages, salaries, fees for
professional service and other amounts for personal services actually rendered
in the course of employment with an Employer maintaining the Plan (including,
but not limited to, commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance premiums, overtime
pay, tips and bonuses and, in the case of a Participant who is an Employee
within the meaning of Code Section 401(c)(1) and the regulations thereunder, the
Participant's earned income (as described in Code Section 401(c)(2) and the
regulations thereunder)) paid during the "limitation year." "415 Compensation"
shall exclude (1)(A) contributions made by the Employer to a plan of deferred
compensation to the extent that, before the application of the Code Section 415
limitations to the Plan, the contributions are not includable in the gross
income of the Employee for the taxable year in which contributed, (B) Employer
contributions made on behalf of an Employee to a simplified employee pension
plan described in Code Section 408(k) to the extent such contributions are
excludable from the Employee's gross income, (C) any distributions from a plan
of deferred compensation regardless of whether such amounts are includable in
the gross income of the Employee when distributed except any amounts received by
an Employee pursuant to an unfunded non-qualified plan to the extent such
amounts are includable in the gross income of the Employee; (2) amounts realized
from the exercise of a non-qualified stock option or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture; (3) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (4) other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not
includable in the gross income of the Employee), or contributions made by the
Employer (whether or not under a salary reduction agreement) towards the
purchase of any annuity contract described in Code Section 403(b) (whether or
not the contributions are excludable from the gross income of the Employee). For
"limitation years" beginning after December 31, 1988, "415 Compensation" shall
be limited to $200,000 (adjusted in the same manner as permitted under Code
Section 401(a)(17)). For "limitation years" beginning after December 31, 1993,
"415 Compensation" shall be limited to $150,000 (adjusted in the same manner as
permitted under Code Section 401(a)(17)).
(e) For purposes of applying the limitations of Code Section 415, the
"limitation year" shall be the Calendar Year.
(f) The dollar limitation under Code Section 415(b)(1)(A) stated in
paragraph (a)(1) above shall be adjusted annually as provided in Code Section
415(d) pursuant to the Regulations. The adjusted limitation is effective as of
January 1st of each calendar year and is applicable to "limitation years" ending
with or within that calendar year.
(g) For the purpose of this Section, all qualified defined benefit plans
(whether terminated or not) ever maintained by the Employer shall be treated as
one defined benefit plan, and all qualified defined contribution plans (whether
terminated or not) ever maintained by the Employer shall be treated as one
defined contribution plan.
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(h) For the purpose of this Section, if the Employer is a member of a
controlled group of corporations, trades or businesses under common control (as
defined by Code Section 1563(a) or Code Section 414(b) and (c) as modified by
Code Section 415(h)) or is a member of an affiliated service group (as defined
by Code Section 414(m)), all Employees of such Employers shall be considered to
be employed by a single Employer.
(i) For the purpose of this Section, if this Plan is a Code Section 413(c)
plan, all Employers of a Participant who maintain this Plan will be considered
to be a single Employer.
(j) (1) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different Anniversary
Dates, the maximum "annual additions" under this Plan shall equal the maximum
"annual additions" for the "limitation year" minus any "annual additions"
previously credited to such Participant's accounts during the "limitation year".
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan not subject to
Code Section 412 maintained by the Employer which have the same Anniversary
Date, "annual additions" will be credited to the Participant's accounts under
the defined contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the defined contribution
plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by the Employer
which have the same Anniversary Date, the maximum "annual additions" under this
Plan shall equal the product of (A) the maximum "annual additions" for the
"limitation year" minus any "annual additions" previously credited under
subparagraphs (1) or (2) above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be credited to such Participant's
accounts under this Plan without regard to the limitations of Code Section 415
and (ii) the denominator of which is such "annual additions" for all plans
described in this subparagraph.
(k) Subject to the exception in Section 4.11(p) below, if an Employee is
(or has been) a Participant in one or more defined benefit plans and one or more
defined contribution plans maintained by the Employer, the sum of the defined
benefit plan fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(l) (1) The defined benefit plan fraction for any "limitation year" is a
fraction (A) the numerator of which is the "projected annual benefit" of the
Participant under the Plan (determined as of the close of the "limitation
year"), and (B) the denominator of which is the greater of the product of 1.25
multiplied by the "protected current accrued benefit" or the lesser of: (i) the
product of 1.25 multiplied by the maximum dollar limitation provided under Code
Section 415(b)(1)(A) for such "limitation year", or (ii) the product of 1.4
multiplied by the amount which may be taken into account under Code Section
415(b)(1)(B) for such "limitation year".
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation year beginning after
December 31, 1986, in one or more defined benefit plans maintained by the
Employer which were in existence on May 6, 1986, the denominator of this
fraction will not be less than 125 percent of the sum of the annual benefits
under such plans which the Participant had accrued as of the close of the last
limitation year beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the aggregate
satisfied the requirements of Section 415 for all limitation years beginning
before January 1, 1987.
(2) For purposes of applying the limitations of Code Section 415,
the "projected annual benefit" for any Participant is the benefit, payable
annually, under the terms of the Plan determined pursuant to Regulation
1.415-7(b)(3).
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(3) For purposes of applying the limitations of Code Section 415,
"protected current accrued benefit" for any Participant in a defined benefit
plan in existence on July 1, 1982, shall be the accrued benefit, payable
annually, provided for under question T-3 of Internal Revenue Service Notice
83-10.
(m) (1) The defined contribution plan fraction for any "limitation year"
is a fraction (A) the numerator of which is the sum of the "annual additions" to
the Participant's accounts as of the close of the "limitation year" and (B) the
denominator of which is the sum of the lesser of the following amounts
determined for such year and each prior year of service with the Employer: (i)
the product of 1.25 multiplied by the dollar limitation in effect under Code
Section 415(c)(1)(A) for such "limitation year" (determined without regard to
Code Section 415(c)(6)), or (ii) the product of 1.4 multiplied by the amount
which may be taken into account under Code Section 415(c)(1)(B) for such
"limitation year". For "limitation years" beginning prior to January 1, 1987,
the "annual addition" shall not be recomputed to treat all Employee
contributions as an "annual addition".
If the Employee was a Participant as of the end of the first
day of the first limitation year beginning after December 31, 1986, in one or
more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the defined benefit fraction would otherwise exceed 1.0
under the terms of this plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last limitation year beginning before January
1, 1987, and disregarding any changes in the terms and conditions of the plan
made after May 5, 1986, but using the Section 415 limitation applicable to the
first limitation year beginning on or after January 1, 1987. The annual addition
for any limitation year beginning before January 1, 1987, shall not be
recomputed to treat all employee contributions as annual additions.
(2) Notwithstanding the foregoing, the numerator of the defined
contribution plan fraction shall be adjusted pursuant to Regulation
1.415-7(d)(1) and questions T-6 and T-7 of Internal Revenue Service Notice
83-10.
(3) For defined contribution plans in effect on or before July
1, 1982, the Administrator may elect, for any "limitation year" ending after
December 31, 1982, that the amount taken into account in the denominator for
every Participant for all "limitation years" ending before January 1, 1983 shall
be an amount equal to the product of (A) the denominator for the "limitation
year" ending in 1982 determined under the law in effect for the "limitation
year" ending in 1982 multiplied by (B) the "transition fraction".
(4) For purposes of the preceding paragraph, the term "transition
fraction" shall mean a fraction (A) the numerator of which is the lesser of (i)
$51,875 or (ii) 1.4 multiplied by twenty-five percent (25%) of the Participant's
"415 Compensation" for the "limitation year" ending in 1981, and (B) the
denominator of which is the lesser of (i) $41,500 or (ii) twenty-five percent
(25%) of the Participant's "415 Compensation" for the "limitation year" ending
in 1981.
(n) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year" for any
Participant in this Plan for reasons other than described in (p) below, the
Administrator shall limit, to the extent necessary, the "annual additions" to
such Participant's accounts for such "limitation year". If, after limiting the
"annual additions" to such Participant's accounts for the "limitation year", the
sum of the defined benefit plan fraction and the defined contribution plan
fraction still exceed 1.0, the Administrator shall then adjust the numerator of
the defined benefit plan fraction so that the sum of both fractions shall not
exceed 1.0 in any "limitation year" for such Participant.
(o) If (1) the substitution of 1.00 for 1.25 and $41,500 for $51,875 above
or (2) the excess benefit accruals or "annual additions" provided for in
Internal Revenue Service Notice 82-19 cause the 1.0 limitation to be exceeded
for any Participant in any "limitation year", such Participant shall be subject
to the following restrictions for each future "limitation year" until the 1.0
limitation is satisfied: (A) the Participant's accrued benefit under the defined
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benefit plan shall not increase (B) no "annual additions" may be credited to a
Participant's accounts and (C) no Employee contributions (voluntary or
mandatory) shall be made under any defined benefit plan or any defined
contribution plan of the Employer.
(p) Notwithstanding anything contained in this Section to the contrary,
the limitations, adjustments and other requirements prescribed in this Section
shall at all times comply with the provisions of Code Section 415 and the
Regulations thereunder, the terms of which are specifically incorporated herein
by reference.
4.12 Adjustment for Excessive Annual Additions.
(a) If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's Compensation or other facts and circumstances to
which Regulation 1.415-6(b)(6) shall be applicable, the "annual additions" under
this Plan would cause the maximum "annual additions" to be exceeded for any
Participant, the Administrator may take any action permitted under applicable
regulations, and may (1) return any voluntary Employee contributions credited
for the "limitation year" to the extent that the return would reduce the "excess
amount" in the Participant's accounts, (2) hold any "excess amount" remaining
after the return of any voluntary Employee contributions in a "Section 415
suspense account", (3) use the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary) to reduce
Employer contributions for that Participant if that Participant is covered by
the Plan as of the end of the "limitation year", or if the Participant is not so
covered, allocate and reallocate the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary) to all
Participants in the Plan before any Employer or Employee contributions which
would constitute "annual additions" are made to the Plan for such "limitation
year", (4) reduce Employer contributions to the Plan for such "limitation year"
by the amount of the "Section 415 suspense account" allocated and reallocated
during such "limitation year".
(b) For purposes of this Article, "excess amount" for any Participant for
a "limitation year" shall mean the excess, if any, of (1) the "annual additions"
which would be credited to his account under the terms of the Plan without
regard to the limitations of Code Section 415 over (2) the maximum "annual
additions" determined pursuant to Section 4.11.
(c) For purposes of this Section, "Section 415 suspense account" shall
mean an unallocated account equal to the sum of "excess amounts" for all
Participants in the Plan during the "limitation year". The "Section 415 suspense
account" shall not share in any earnings or losses of the Trust Fund.
(d) The Plan may not distribute "excess amounts" to Participants or Former
Participants.
4.13 Transfers from Qualified Plans.
(a) With the consent of the Administrator, amounts may be transferred from
other qualified plans, provided that the trust from which such funds are
transferred permits the transfer to be made and, in the opinion of legal counsel
for the Employer, the transfer will not jeopardize the tax exempt status of the
Plan or Trust or create adverse tax consequences for the Employer. The amounts
transferred shall be set up in a separate account herein referred to as a
"Rollover Account." Such account shall be fully Vested at all times and shall
not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan, and such amounts shall not be
subject to Forfeiture for any reason and may not be withdrawn by, or distributed
to the Participant, in whole or in part, except as provided in Paragraph (c) of
this Section.
(c) At Normal Retirement Date, or such other date when the Participant or
his Beneficiary shall be entitled to receive benefits, the fair market value of
the Participant's Rollover Account shall be used to provide additional benefits
to the Participant.
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<PAGE>
(d) The Administrator may direct that employee transfers made after the
first month of the Plan Year pursuant to this Section be segregated into a
separate account for each Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the Trustee until
the first day of the following calendar quarter, at which time they shall be
invested as determined by the Administrator pursuant to Article VII.
(e) Unless the Administrator directs that the Participant's Rollover
Account be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or savings
and loan association, money market certificate, or other short term debt
security acceptable to the Trustee, it shall be invested as part of the general
Trust Fund and share in earnings and losses. Except, however, deposits into the
general Trust Fund after the first month of the Plan Year shall not share in
earnings and losses for such year.
(f) For purposes of this Section the term "amounts transferred from other
qualified plans" shall mean: (i) amounts transferred to this Plan directly from
another qualified plan; (ii) lump sum distributions received by an Employee from
another qualified plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan within sixty (60)
days following his receipt thereof; (iii) amounts transferred to this Plan from
a conduit individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were previously
distributed to the Employee by another qualified plan as a lump sum
distribution, (B) were eligible for tax free rollover to a qualified corporate
or noncorporate plan, and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the Employee from a
conduit individual retirement account meeting the requirements of clause (iii)
above, and transferred by the Employee to this Plan within sixty (60) days of
his receipt thereof from such conduit individual retirement account. Prior to
accepting any transfers to which this Section applies, the Administrator may
require the Employee to establish that the amounts to be transferred to this
Plan meet the requirements of this Section and may also require the Employee to
provide an opinion of counsel satisfactory to the Employer that the amounts to
be transferred meet the requirements of this Section.
(g) For purposes of this Section, the term "qualified plan" shall mean any
tax qualified plan under Code Section 401(a).
(h) Notwithstanding any provision of this Plan to the contrary, an
Eligible Employee who has not met the conditions of eligibility described in
Section 3.1 may nonetheless roll over amounts into this Plan in accordance with
this Section prior to the date that he meets such eligibility requirements. The
participation in this plan by such an Employee shall be limited to his Rollover
Account until he otherwise becomes eligible to participate pursuant to the terms
of Article III.
ARTICLE V
VALUATIONS
5.1 Valuation of the Trust Fund. The Administrator shall direct the Trustee, as
of each Valuation Date, to determine the net worth of the assets comprising the
Trust Fund as it exists on the Valuation Date prior to taking into consideration
any contribution or Forfeiture to be allocated for the valuation period ending
on that Valuation Date. In determining such net worth, the Trustee shall value
the assets comprising the Trust Fund at their fair market value as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2 Method of Valuation. In determining the fair market value of securities held
in the Trust Fund which are listed on a registered stock exchange, the
Administrator shall direct the Trustee to value the same at the prices at which
they were last traded on such exchange preceding the close of business on the
Valuation Date. If such securities were not traded on the Valuation Date, or if
the exchange on which they are traded was not open for business on
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the Valuation Date, then the securities shall be valued at the prices at which
they were last traded prior to the Valuation Date. Any unlisted security held in
the Trust Fund shall be valued at its bid price next preceding the close of
business on the Valuation Date, which bid price shall be obtained from a
registered broker or an investment banker. In determining the fair market value
of assets other than securities for which trading or bid prices can be obtained,
the Trustee may appraise such assets itself, or in its discretion, employ one or
more appraisers for that purpose and rely on the values established by such
appraiser or appraisers.
5.3 Allocation of Income and Loss.
(a) As of each Valuation Date, (i) the Elective, Matching and Rollover
Accounts (and, within a reasonable time after April 1, 1995, Profit Sharing
Account) of each Participant and each Former Participant who has not received a
distribution of his Combined Account shall be adjusted to reflect the interest
of such Participant or Former Participant as of such Valuation Date in the funds
established under Section 7.1(a), and (ii) on or before approximately April 1,
1995, the Profit Sharing Account of each Participant and Former Participant
shall be adjusted to reflect the Participant's proportionate share of the gains
or losses since the preceding Valuation Date on the assets of such Account
invested in accordance with Section 7.1(d). Each Participant's or Former
Participant's proportionate share may be determined under any accounting method
selected by the Administrator that allocates fairly, in the opinion of the
Administrator, the investment gains or losses of the fund or funds in which the
assets of the Elective, Matching and Rollover Accounts (and, within a reasonable
time after April 1, 1995, Profit Sharing Account) of the Participant are
invested or, with respect to Participant's Profit Sharing Account on or before
approximately April 1, 1995, the investment gains or losses on the assets
invested in accordance with Section 7.1(d). In making such allocation, all
assets shall be valued at their fair market value as determined in accordance
with Section 5.2 on the applicable Valuation Date.
(b) Participants' accounts shall be debited for any insurance or annuity
premiums paid, if any, and credited with any dividends received on insurance
contracts.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 Determination of Benefits upon Retirement. Every Participant may terminate
his employment with the Employer and retire for the purposes hereof on his
Normal Retirement Date. Upon such Normal Retirement Date, all amounts credited
to such Participant's Profit Sharing Account shall become distributable.
However, a Participant may postpone the termination of his employment with the
Employer to a later date, in which event the participation of such Participant
in the Plan shall continue until his Late Retirement Date. As soon as reasonably
practicable after the calendar quarter end coinciding with or next following a
Participant's Retirement Date, the Trustee shall distribute all amounts credited
to such Participant's Combined Account as of such calendar quarter end in
accordance with Section 6.5. On and after approximately April 1, 1995, such
distribution shall be made within a reasonable period following the
Participant's Retirement Date, based on the amount credited to such
Participant's Combined Account as of the date of distribution.
Notwithstanding any other provision hereof, if the value of a Retired
Participant's Combined Account exceeds $3,500, his Combined Account may not be
distributed to him prior to the date that he attains the age of 62 without his
written consent. Further, the spouse of the Participant must consent in writing
to any such distribution. Written consent of the Participant and his spouse to
the distribution must be obtained not more than 90 days before commencement of
the distribution and shall be made in a manner consistent with Section
6.5(a)(2).
If the value of a Retired Participant's Vested benefit is $3,500 or less
(and has never exceeded $3,500), then, notwithstanding any other provision of
the Plan, the Administrator shall direct the Trustee to cause the entire Vested
Combined Account of such Retired Participant to be paid to such Participant in
one lump sum without regard to the Participant's election or the consent of said
Participant's spouse.
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6.2 Determination of Benefits upon Death.
(a) Upon the death of a Participant before his Retirement Date or other
termination of his employment, all amounts credited to such Participant's Profit
Sharing Account shall become fully Vested. Within a reasonable period following
such death (or, on or before approximately April 1, 1995, as soon as reasonably
practicable after the calendar quarter end coinciding with or next following
such death), the Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the deceased
Participant's Combined Account to the Participant's Beneficiary.
(b) Within a reasonable period following the death (or, on or before
approximately April 1, 1995, as soon as reasonably practicable after the
calendar quarter end coinciding with or next following the death) of a Former
Participant, the Trustee, in accordance with the provisions of Sections 6.6 and
6.7, shall distribute any remaining amounts credited to the account of such
deceased Former Participant to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive payment of the value of the
account of a deceased Participant or Former Participant as the Administrator may
deem desirable. The Administrator's determination of death and of the right of
any person to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in Section 6.6, the
Beneficiary of the death benefit shall be the Participant's spouse, who shall
receive such benefit in the form of a Pre-Retirement Survivor Annuity pursuant
to Section 6.6. Except, however, the Participant may designate a Beneficiary
other than his spouse if:
(i) the Participant and his spouse have validly waived the
Pre-Retirement Survivor Annuity in the manner prescribed in
Section 6.6, and the spouse has waived his or her right to be
the Participant's Beneficiary, or
(ii) the Participant has no spouse, or
(iii) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be made on a form
satisfactory to the Administrator. A Participant may at any time revoke his
designation of a Beneficiary or change his Beneficiary by filing written notice
of such revocation or change with the Administrator. However, the Participant's
spouse must again consent in writing to any such change or revocation. In the
event no valid designation of Beneficiary exists at the time of the
Participant's death, the death benefit shall be payable to the Participant's
estate.
6.3 Determination of Benefits in Event of Disability. In the event of a
Participant's Total and Permanent Disability prior to his Retirement Date or
other termination of his employment, all amounts credited to such Participant's
Profit Sharing Account shall become fully Vested. Within a reasonable period
following the event of Total and Permanent Disability (or, prior to
approximately April 1, 1995, as soon as reasonably practicable after the
calendar quarter end coinciding with or next following the event of Total and
Permanent Disability), the Trustee, in accordance with the provisions of
Sections 6.5 and 6.7, shall distribute to such Participant all amounts credited
to such Participant's Combined Account as though he had retired.
Notwithstanding any other provision hereof, no distribution shall be made
to a disabled Participant prior to the date upon which the Participant attains
the age of 62 without the written consent of such Participant.
6.4 Determination of Benefits upon Termination. Except as hereinafter provided,
distribution of benefits to a Terminated Participant shall be made within a
reasonable period following the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of the
Employer (i.e., upon the Participant's death, Total and Permanent Disability or
Normal Retirement Date) (or, prior to approximately April 1,
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1995, as soon as practicable after the calendar quarter end coinciding with or
next following the occurrence of such event), subject to the consent
requirements described below if the value of the Participant account exceeds
$3,500. At that time, the Terminated Participant shall be entitled to receive
the Vested portion of his Combined Accounts, determined as of the date of
distribution (or prior to approximately April 1, 1995, as of the quarter end
described above). The distribution shall be made in accordance with Section 6.5.
Notwithstanding the foregoing, within thirty (30) days after termination of
employment and subject to the requirements of the following paragraph, a
Terminated Participant may elect to receive a lump sum distribution of the
Vested portion of his Combined Account, determined as of the calendar quarter
end coinciding with or next following his termination of employment, with such
distribution to be made as soon as practicable after such calendar quarter end.
Notwithstanding the foregoing, and subject to all applicable notice,
advanced election and spousal consent requirements, all Former Participants who
have not previously received a distribution of their benefits under this Plan
may elect to receive a lump sum distribution of the vested portion of their
Combined Account, with such distribution to be made on or around March 31, 1995,
based on the value of the Combined Account as of the Valuation Date preceding
the date of such distribution.
Notwithstanding any other provision hereof, if the value of a Terminated
Participant's Combined Account exceeds $3,500, his Vested Combined Account may
not be distributed to him prior to the date that he attains the age of 62
without his written consent. Further, the spouse of the Participant must consent
in writing to any such distribution. Written consent of the Participant and his
spouse to the distribution must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner consistent with
Section 6.5(a)(2).
If the value of a Terminated Participant's Vested benefit is $3,500 or
less (and has never exceeded $3,500), then, notwithstanding any other provision
of the Plan, the Administrator shall direct the Trustee to cause the entire
Vested Combined Account of such terminated Participant, to be paid to such
Participant in one lump sum without regard to the Participant's election or the
consent of said Participant's spouse.
The amount of the Terminated Participant's Profit Sharing Account which is
not Vested shall be credited to the Suspense Account (which will not share in
allocation per Section 5.3) and shall, subsequently, be allocated in accordance
with the terms of the Plan at such time as the amount becomes a Forfeiture.
In the event that the amount of the Vested portion of the Terminated
Participant's Combined Account equals or exceeds the cash surrender value of any
insurance Contracts, the Trustee, when so directed by the Administrator and
agreed to by the Terminated Participant, shall assign, transfer, and set over to
such Terminated Participant all Contracts on his life in such form or with such
endorsements, so that the settlement options are consistent with the provisions
of Section 6.5. In the event that the Terminated Participant's Vested portion
does not at least equal the cash surrender value of the Contracts, if any, the
Terminated Participant may pay over to the Trustee the sum needed to make the
distribution equal to the value of the Contracts being assigned or transferred,
or the Trustee, pursuant to the Participant's election, may borrow the cash
surrender value of the Contracts from the insurer and then assign the Contracts
to the Terminated Participant.
(a) The Vested portion of any Participant's Profit Sharing Account shall
be a percentage of the total amount credited to his Participant's Profit Sharing
Account determined on the basis of the Participant's number of Years of Service
according to the following schedule:
Vesting Schedule
Years of Service Percentage
---------------- ----------
0-4 0%
5 100%
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Notwithstanding the foregoing, (i) all amounts credited as of December 31,
1989 to the Profit Sharing Account of any Participant employed by the Company on
or prior to such date, adjusted for any subsequent earnings or losses thereon,
shall be fully vested and nonforfeitable and shall not be subject to the vesting
schedule and (ii) any Participant who completed three Years of Service on or
before August 17, 1990 shall have the Vested portion of his or her Profit
Sharing Account determined in accordance with the following schedule:
Years of Service Percentage
---------------- ----------
1 20%
2 40%
3 60%
4 80%
5 100%
All amounts credited to a Participant's Elective, Matching and Rollover
Accounts shall always be fully vested and nonforfeitable, and shall not be
subject to the vesting schedule.
(b) The computation of a Participant's nonforfeitable percentage of his
interest in the Plan shall not be reduced as the result of any direct or
indirect amendment to this Article. In the event that the Plan is amended to
change or modify any Vesting schedule, a Participant with at least three (3)
Years of Service as of the expiration date of the election period may elect to
have his nonforfeitable percentage computed under the Plan without regard to
such amendment. If a Participant fails to make such election, then such
Participant shall be subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the amendment and shall
end 60 days after the latest of:
(i) the adoption date of the amendment,
(ii) the effective date of the amendment, or
(iii) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(c) (1) If any Former Participant shall be reemployed by the Employer
before a 1-Year Break in Service occurs, he shall continue to participate in the
Plan in the same manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive 1-Year Breaks in Service, and such Former
Participant had received a distribution of his entire Vested interest prior to
his reemployment, his forfeited account shall be reinstated only if he repays
the full amount distributed to him before the earlier of five (5) years after
the first date on which the Participant is subsequently reemployed by the
Employer or the close of the first period of 5 consecutive 1-Year Breaks in
Service commencing after the distribution. In the event the Former Participant
does repay the full amount distributed to him, the undistributed portion of the
Participant's Profit Sharing Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the Valuation Date coinciding with or
next following his termination.
(3) If any Former Participant is reemployed after a 1-Year Break in
Service has occurred, Years of Service shall include Years of Service prior to
his 1-Year Break in Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in Service,
his pre-break and post-break service shall be used for
computing Years of Service for vesting purposes only
after he has been employed for one (1) Year of Service
following the date of his reemployment with the
Employer;
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(ii) Each non-vested Former Participant shall lose credits
otherwise allowable under (i) above if his consecutive
1-Year Breaks in Service equal or exceed the greater of
(A) five (5) or (B) the aggregate number of his
pre-break Years of Service;
(iii) After five (5) consecutive 1-Year Breaks in Service, a
Former Participant's Vested Profit Sharing Account
balance attributable to pre-break service shall not be
increased as a result of post-break service.
6.5 Distribution of Benefits.
(a) (1) Unless otherwise elected as provided below within the 90-day
period ending on the "annuity starting date," a Participant who is married on
the "annuity starting date" and who does not die before the "annuity starting
date" shall receive the value of his benefits in the form of a joint and
survivor annuity. The joint and survivor annuity shall be equal in actuarial
value to a single life annuity. Such joint and survivor benefits following the
Participant's death shall continue to the spouse during the spouse's lifetime at
a rate equal to 50% of the rate at which such benefits were payable to the
Participant. The Participant may elect to receive a smaller annuity benefit with
continuation of payments to the spouse at a rate of seventy-five percent (75%)
or one hundred percent (100%) of the rate payable to a Participant during his
lifetime. An unmarried Participant shall receive the value of his benefit in the
form of a single life annuity. Such unmarried Participant, however, may elect in
writing to waive the single life annuity. The election must comply with the
provisions of this Section as if it were an election to waive the joint and
survivor annuity by a married Participant, but without the spousal consent
requirement.
(2) Any election to waive the joint and survivor annuity must be
made by the Participant in writing during the election period and be consented
to by the Participant's spouse. Such election shall designate a Beneficiary (or
class of beneficiaries or contingent beneficiaries) or a form of benefits that
may not be changed without spousal consent (unless the consent of the spouse
expressly permits designations by the Participant without the requirement of
further consent by the spouse). Such spouse's consent shall be irrevocable and
in writing and must acknowledge the effect of such election and be witnessed by
a Plan representative or a notary public. Such consent shall not be required if
it is established to the satisfaction of the Administrator that the required
consent cannot be obtained because there is no spouse, the spouse cannot be
located, or other circumstances that may be prescribed by Regulations. The
election made by the Participant and consented to by his spouse may be revoked
by the Participant in writing without the consent of the spouse at any time
during the election period. The number of revocations shall not be limited. Any
new election must comply with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the joint and survivor annuity
shall be the 90 day period ending on the "annuity starting date."
(4) For purposes of this Section, the "annuity starting date" means
the first day of the first period for which an amount is payable as an annuity,
whether by reason of retirement, death or disability or other termination of
employment. In the case of a benefit not payable in the form of an annuity, the
annuity starting date shall be the first day on which all events have occurred
which entitle the Participant or his Beneficiary to such benefit.
(5) With regard to the election, the Administrator shall provide the
Participant not less than 30 nor more than 90 days before the "annuity starting
date" (and consistent with Regulations), a written explanation of:
(i) the terms and conditions of the joint and survivor
annuity, and
(ii) the Participant's right to make an election to waive the
joint and survivor annuity, and
(iii) the right of the Participant's spouse to consent to any
election to waive the joint and survivor annuity, and
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(iv) the right of the Participant to revoke such election,
and the effect of such revocation.
(6) The distribution of a benefit in the form of a joint and
survivor annuity shall require the Participant's consent if such distribution
commences prior to age 62.
(b) In the event a married Participant duly elects pursuant to paragraph
(a)(2) above not to receive the retirement benefit in the form of a joint and
survivor annuity or, if such Participant is not married, in the form of a life
annuity, the Administrator shall direct the Trustee to distribute to a
Participant or his Beneficiary any amount to which he is entitled under the Plan
in one or more of the following methods as elected by the Participant:
(i) One lump-sum payment in cash or in property;
(ii) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments after first having (A)
segregated the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate
or other liquid short-term security or (B) purchased a
nontransferable annuity contract providing for such payment.
The period over which such payment is to be made shall not
extend beyond the Participant's life expectancy (or the life
expectancy of the Participant and his designated Beneficiary).
(iii) Purchase of or providing an annuity. However, such annuity may
not be in any form that will provide for payments over a
period extending beyond either the life of the Participant (or
the lives of the Participant and his designated Beneficiary)
or the life expectancy of the Participant (or the life
expectancy of the Participant and his designated Beneficiary).
(c) The present value of a Retired Participant's joint and survivor
annuity derived from his Combined Account may not be paid without his written
consent if the value exceeds $3,500 or has ever exceeded $3,500. Further, the
spouse of a Retired Participant must consent in writing to any immediate
distribution of the value of the Participant's Combined Account. Notwithstanding
any other provision of the Plan, if the value of the Participant's Combined
Account does not exceed $3,500 (and has never exceeded $3,500), the
Administrator shall immediately distribute such Combined Account without such
Participant's consent. No distribution may be made under the preceding sentence
after the annuity starting date unless the Participant and his spouse consent in
writing to such distribution. Any written consent required under the paragraph
must be obtained not more than 90 days before commencement of the distribution
and shall be made in a manner consistent with Section 6.5(a)(2).
(d) If the Participant's entire interest is to be distributed in other
than a lump sum, then the amount to be distributed each year must be at least an
amount equal to the quotient obtained by dividing the Participant's entire
interest by the life expectancy of the Participant or the joint and last
survivor expectancy of the Participant and his designated Beneficiary.
(e) If a Participant's retirement benefit is to be distributed to him and
his Beneficiaries over a period in excess of the Participant's then life
expectancy, the then present value of the payments to be made over the period of
the Participant's then life expectancy must be more than fifty percent (50%) of
the then present value of the total payments to be made to the Participant and
his Beneficiaries. Except, however, this paragraph shall not apply to a
distribution in the form of a joint and survivor annuity pursuant to Section
6.5(a).
(f) Notwithstanding any provision in the Plan to the contrary, a
Participant's benefits shall be distributed to him not later than April 1 of the
calendar year following the calendar year in which the Participant attains age
70-1/2. Alternatively, distributions to a Participant must begin no later than
the applicable April 1st as determined under the preceding sentence and must be
made over the life of the Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy of the Participant
(or the life expectancies of the Participant and his designated Beneficiary).
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(g) For purposes of this Section, the life expectancy of a Participant and
a Participant's spouse (other than in the case of a life annuity) may be
redetermined, but not more frequently than annually, and in accordance with
Regulations. Further, life expectancy and joint and last survivor expectancy
shall be computed using the return multiples of Regulation 1.72-9.
(h) Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant has, prior
to January 1, 1984, made a written designation to have his retirement benefit
paid in an alternative method acceptable under Code Section 401(a) as in effect
prior to the enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
6.6 Distribution of Benefits upon Death.
(a) Unless otherwise elected as provided below, a Vested Participant who
dies before the annuity starting date and who has a surviving spouse shall have
his death benefit paid to his surviving spouse in the form of a Pre-Retirement
Survivor Annuity. The Participant's spouse may direct that payment of the
Pre-Retirement Survivor Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment of such benefit
will commence at the time the Participant would have attained the later of his
Normal Retirement Age or age 62. However, the spouse may elect a later
commencement date.
(b) Any election to waive the Pre-Retirement Survivor Annuity before the
Participant's death must be made by the Participant in writing during the
election period and shall require the spouse's irrevocable consent in the same
manner provided for in Section 6.5(a)(2). Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary. This election may be revoked by
the Participant (without the consent of the spouse) at any time and any number
of times during the election period described below.
(c) The election period to waive the Pre-Retirement Survivor Annuity shall
begin on the first day of the Plan Year in which the Participant attains age 35
and end on the date of the Participant's death. In the event a Vested
Participant separates from service prior to the beginning of the election
period, the election period shall begin on the date of such separation from
service.
(d) With regard to the election, the Administrator shall provide each
Participant within the applicable period, with respect to such Participant (and
consistent with Regulations), a written explanation of the Pre-Retirement
Survivor Annuity containing comparable information to that required pursuant to
Section 6.5(a)(5). For the purposes of this paragraph, the term "applicable
period" means, with respect to a Participant, whichever of the following periods
ends last: (i) The period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan Year
preceding the Plan Year in which the Participant attains age 35; (ii) A
reasonable period after the individual becomes a Participant. For this purpose,
in the case of an individual who becomes a Participant after age 32, the
explanation must be provided by the end of the three-year period beginning with
the first day of the first Plan Year for which the individual is a Participant;
(iii) A reasonable period ending after the Plan no longer fully subsidizes the
cost of the Pre-Retirement Survivor Annuity with respect to the Participant;
(iv) A reasonable period ending after Code Section 401(a)(11) applies to the
Participant; or (v) A reasonable period after separation from service in the
case of a Participant who separates before attaining age 35. For this purpose,
the Administrator must provide the explanation at the time of separation or
within one year after separation.
(e) If the value of the Pre-Retirement Survivor Annuity derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500, the Administrator shall direct the immediate distribution in
one lump to the Participant's spouse of the value of the Pre-Retirement Survivor
Annuity. No distribution may be made under the preceding sentence after the
annuity starting date unless the spouse consents in writing. If the value
exceeds $3,500 (or has ever exceeded $3,500), an immediate distribution of the
entire amount may be made to the surviving spouse, provided such surviving
spouse consents in writing to such distribution. Any written
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consent required under this paragraph must be obtained not more than 90 days
before commencement of the distribution and shall be made in a manner consistent
with Section 6.5(a)(2).
(f) (1) In the event the death benefit is not paid in the form of a
Pre-Retirement Survivor Annuity, it shall be paid to the Participant's
Beneficiary by either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's death, by his
Beneficiary):
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the Participant
or his Beneficiary, and in installments as nearly equal as
practicable. After periodic installments commence, the
Beneficiary shall have the right to direct the Trustee to
reduce the period over which such periodic installments shall
be made, and the Trustee shall adjust the cash amount of such
periodic installments accordingly.
(2) In the event the death benefit payable pursuant to Section 6.2
is payable in installments, then, upon the death of the Participant, the
Administrator shall direct the Trustee to segregate into a separate Trust
Fund(s) the death benefit, and the Trustee shall invest such segregated Trust
Funds separately, and the funds accumulated in such Trust Fund(s) shall be used
for the payment of the installments hereinabove provided.
(3) The Administrator, at the election of the Participant's
Beneficiary, shall direct the Trustee to (1) accelerate any installment payment
to a Participant's Beneficiary, or (2) at any time, purchase for the benefit of
the Participant's Beneficiary an annuity with all monies or property held in the
segregated Trust Fund(s).
(g) All distributions shall be made in accordance with the requirement of
regulations promulgated under Code Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
(h) If the distribution of a Participant's interest has begun in
accordance with a method selected in Section 6.5 and the Participant dies before
his entire interest has been distributed to him, the remaining portion of such
interest shall be distributed at least as rapidly as under the method of
distribution selected pursuant to Section 6.5 as of his date of death.
(i) If a Participant dies before he has begun to receive any distributions
of his interest under the Plan, his death benefit shall be distributed to his
Beneficiaries within 5 years after his death.
(j) The 5-year distribution requirement of Section 6.6(h) shall not apply
to any portion of the deceased Participant's interest which is payable to or for
the benefit of a designated Beneficiary. In such event, such portion may be
distributed over the life of such designated Beneficiary (or over a period not
extending beyond the life expectancy of such designated Beneficiary) provided
such distribution begins not later than one (1) year after the date of the
Participant's death (or such later date as may be prescribed by Regulations).
Except, however, in the event the Participant's spouse is his
Beneficiary, the requirement that distributions commence within one year of a
Participant's death shall not apply. In lieu thereof, such distribution must
commence no later than the date on which the deceased Participant would have
attained age seventy and one-half (70 1/2). If the surviving spouse dies before
the distributions to such spouse begin, then the 5-year distribution requirement
of Section 6.6(h) shall apply as if the spouse were the Participant.
(k) For the purposes of this Section, the life expectancy of a Participant
and a Participant's spouse (other than in the case of a life annuity) may be
redetermined, but not more frequently than annually and in accordance with
Regulations. Further, life expectancy and joint and last survivor expectancy
shall be computed using the return multiples of Regulation 1.72-9.
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(l) Subject to the spouse's right of consent afforded under the Plan, the
restrictions imposed by this Section shall not apply if a Participant has, prior
to January 1, 1984, made a written designation to have his death benefits paid
in an alternative method acceptable under Code Section 401(a) as in effect prior
to the enactment of the Tax Equity and Fiscal Responsibility Act of 1982.
6.7 Time of Segregation or Distribution. Except as limited by Sections 6.5 and
6.6, whenever the Trustee is to make a distribution or to commence a series of
payments on or as of a Valuation Date, the distribution or series of payments
may be made or begun on such date or as soon thereafter as is reasonably.
Except, however, unless a Former Participant elects in writing to defer the
receipt of benefits, (such election may not result in a death benefit that is
more than incidental), the payment of benefits shall begin not later than the
60th day after the close of the Plan Year in which the latest of the following
events occurs:
(1) the date on which the Participant attains the Normal Retirement Age
specified herein,
(2) the 10th anniversary of the year in which the Participant commenced
participation in the Plan, or
(3) the date the Participant terminates his service with the Employer.
6.8 Distribution for Minor Beneficiary. In the event a distribution is to be
made to a minor, then the Administrator may direct that such distribution be
paid to the legal guardian, or if none, to a parent of such Beneficiary or a
responsible adult with whom the Beneficiary maintains his residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to
Minors Act, if such is permitted by the laws of the state in which said
Beneficiary resides. Such a payment to the legal guardian, custodian or parent
of a minor Beneficiary shall fully discharge the Trustee, Employer, and Plan
from further liability on account thereof.
6.9 Location of Participant or Beneficiary Unknown. In the event that all, or
any portion, of the distribution payable to a Participant or his Beneficiary
hereunder shall, at the expiration of four (4) years after it shall become
payable, remain unpaid solely by reason of the inability of the Administrator,
after sending a registered letter, return receipt requested, to the last known
address, and after further diligent effort, to ascertain the whereabouts of such
Participant or his Beneficiary, the amount so distributable shall be treated as
a Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is
located subsequent to his benefit being reallocated, such benefit shall be
restored.
6.10 Advance Distribution for Hardship. Upon demonstration by a Participant that
a financial hardship exists, the Administrator shall direct the Trustee to
distribute to the Participant an amount from a Participant's Elective Account,
such amount not to exceed the lesser of (i) the Participant's Deferred
Compensation for all Plan Years (plus earnings thereon through December 31,
1988) or (ii) the value of such Participant's Elective Account as determined as
of the Valuation Date prior to such distribution. Prior to the approval of such
distribution, the Participant must indicate in the application for such
distribution that he has attempted to obtain funds necessary to alleviate such
financial hardship through all other resources reasonably available to the
Participant, including all loans available to the Participant from this Plan.
Such written application shall be in the form chosen by the Administrator in
accordance with regulations, and shall require the consent of the Participant's
spouse in accordance with Section 6.5 if the Participant is married.
(a) A financial hardship shall exist if the distribution is needed by the
Participant (1) to pay medical expenses incurred by the Participant, the
Participant's spouse, or a dependent of the Participant, (2) to purchase a
principal residence for the Participant, or to prevent the eviction of the
Participant from his principal residence or foreclosure on the mortgage of the
Participant's principal residence, (3) to pay the tuition for the next twelve
(12) months of post-secondary education for the Participant, his spouse or
dependent, or (4) for funeral expenses for the Participant, the Participant's
spouse or dependent.
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(b) If the Administrator shall find, under rules uniformly applicable to
all Participants similarly situated, that the applicant is in need of immediate
financial assistance from the Trust Fund, then the Plan Administrator shall
direct the Trustee to make a distribution from the Trust Fund to or for the
benefit of the Participant in such amount needed to alleviate such financial
hardship, but not in excess of the amount specified above.
(c) A Participant will not be permitted to have Elective Contributions
made on his behalf for 12 months following receipt of a hardship distribution.
Further, in the Plan Year following the year of such distribution, the
Participant may have Elective Contributions only up to the limit on such
contributions as set out in Code Section 402(g), less the amount of Elective
Contributions made on behalf of that Participant in the Plan Year of such
distribution.
(d) Notwithstanding anything herein to the contrary, no amounts may be
distributed to a Participant from the Participant's Elective Account under this
Section 6.10 which are then being used as security for an outstanding loan to
the Participant made pursuant to Section 7.4 hereof.
6.11 Alternate Payees: Distribution Expenses.
(a) All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order" as those terms
are defined in Code Section 414(p), and as described In Section 9.3.
(b) Notwithstanding anything in Article VI to the contrary, a Participant
who commences receiving a distribution under this Article VI shall have his
initial distribution reduced by a distribution administration fee, as determined
by the Administrator on a uniform basis from time to time based on costs
incurred by the Administrator in processing such distribution.
(c) A Participant requesting that all or any portion of his Combined
Account be transferred to another plan or an Individual Retirement Account shall
have his distribution reduced by any associated wire transfer or similar fee
incurred by the Trustee in connection with the transfer.
6.12 Direct Transfers of Distributions.
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an "eligible rollover distribution" paid directly to an
"eligible retirement plan" specified by the "distributee" in a "direct
rollover."
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance to the
credit of the distributee, except that an eligible rollover distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion
of any distribution that is not includable In gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that
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accepts the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
6.13 Distribution upon Sale of Subsidiary or Assets.
(a) Definitions. For purposes of this Section 6.13, the following
definitions shall apply:
(1) "Asset Sale" shall mean the sale of all or a portion of the
assets of an Employer to a Purchaser.
(2) "Former Employee" shall mean a Participant who continues to work
for a Sold Subsidiary after a Stock Sale or for a Purchaser after an Asset Sale,
such that after such Stock Sale or Asset Sale the Participant is no longer
working for an Affiliated Employer.
(3) "Purchaser" shall mean a corporation or other person or entity
(and its affiliates) that purchases from the Company the common stock of an
Employer or all or a portion of the assets of an Employer, and which is not
itself an Affiliated Employer.
(4) "Sold Subsidiary" shall mean an Employer, the common stock of
which is sold by the Company to a Purchaser or all or a portion of the assets of
which are sold to a Purchaser.
(5) "Stock Sale" shall mean a sale by the Company of its ownership
interest in another Employer to a Purchaser.
(b) In the event of a Stock Sale or an Asset Sale, a Former Employee shall
be treated as a Terminated Participant under Section 6.4 and may elect to begin
receiving distribution(s) from the Plan in accordance with Section 6.5, provided
that:
(1) The Company continues to maintain this Plan and the Purchaser
does not maintain or participate in this Plan: and
(2) No assets or liabilities of this Plan are transferred by this
Plan to any plan sponsored by the Purchaser, except pursuant to a Participant
election in accordance with Section 6.12.
However, should such an Asset Sale or Stock Sale constitute a transaction
that is described in Code Section 401(k)(10)(A)(ii) or (iii), the Former
Employee may elect to receive a distribution of his Matching Account and his
Elective Account as a result of such Asset Sale or Stock Sale only in the form
of a lump sum distribution.
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ARTICLE VII
TRUST AND INVESTMENT PROVISIONS
7.1 General Investment Provisions.
(a) The Trustee shall, from time to time, establish funds designated by
the Company for the collective investment and reinvestment of Elective, Matching
and Rollover contributions (and, within a reasonable time after April 1, 1995,
Profit Sharing Contributions) made on behalf of Participants and, subject to
paragraph (e) below, shall be responsible for the management of such funds. The
Company shall provide communications to Participants regarding the existence and
availability of such funds.
(b) In accordance with rules established by the Administrator and applied
on a uniform and nondiscriminatory basis, each Participant and Former
Participant who has not received a distribution of his Combined Account shall
have the right to (1) direct the Administrator as to the investment fund or
funds in which Elective, Matching and Rollover Contributions (and, within a
reasonable time after April 1, 1995, Profit Sharing Contributions) made on his
behalf will be invested, (2) change his or her investment election effective as
of the first day of any calendar quarter or more frequently, if permitted on a
uniform basis by the Plan Administrator, and (3) receive, upon request, a
written confirmation of any such election. To the extent permitted by law, the
Trustee, the Company, the Employees and the Plan Administrator shall not have
any liabilities or obligations of any nature whatsoever with respect to the
investment elections of Participants or Former Participants or transfers made
pursuant to (c) below, including, but not limited to any liabilities or
obligations relating to the prudence or diversification of such investments.
(c) In accordance with rules established by the Administrator and applied
on a uniform and nondiscriminatory basis, each Participant or Former Participant
may elect to transfer all or any part of the value of his Elective Account,
Rollover Account and/or Matching Account (and, within a reasonable time after
April 1, 1995, his Profit Sharing Account) to and among the funds effective as
of the first day of any calendar quarter or more frequently, if permitted on a
uniform basis by the Plan Administrator, and, upon request, may receive a
written confirmation of such election; provided, however, that any transfer to a
Life Insurance Protection Fund established hereunder shall be subject to
compliance with Section 7.2(c).
(d) Subject to paragraph (e) below, prior to approximately April 1, 1995
(and continuing after April 1, 1995 with regard to Participants and Former
Participants who fail to make proper elections under subparagraph (a)), the
Trustee shall have the responsibility to invest, manage and control the assets
of the Plan attributable to Profit Sharing Contributions made by the Employers;
provided, however, that, prior to January 1, 1995, any Participant or Former
Participant who has attained the age of 55 may elect, at the time or times
designated by the Administrator, to transfer all or any portion of his or her
Profit Sharing Account into a Guaranteed Investment Contract Fund established by
the Trustee, and thereafter the Trustee shall not have any further
responsibility with respect to the management of assets so transferred.
(e) It is understood that during a transition period beginning
approximately April 1, 1995 and ending approximately July 1, 1995, the Combined
Accounts of Participants may be invested by the Trustee in money market
instruments pending the establishment of new investment funds to be made
available to Participants under the Plan.
(f) If a Participant or Former Participant fails to make a proper election
with regard to investment of his or her Account pursuant to (b) or (c) above,
the Trustee (or other fiduciary named by the Company with responsibility for
investments) shall direct the investment of such assets in one or more
investment funds, Retirement Preservation Fund, or money market instruments, as
such Trustee or investment fiduciary deems appropriate.
(g) The Trustee may appoint one or more Investment Managers with respect
to all or any portion of the asset of the Plan. Any such Investment Manager
shall have all of the powers, duties and responsibilities of the
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Trustee, including voting rights, with respect to assets for which it has been
appointed Investment Manager and the Trustee shall not have any liability or
responsibility of any nature whatsoever with respect thereto.
7.2 Investment Powers and Duties of the Trustee.
(a) Subject to Section 7.1, the Trustee shall invest and reinvest the
Trust Fund to keep the Trust Fund invested without distinction between principal
and income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not limited to,
stocks, common or preferred, bonds and other evidences of indebtedness or
ownership, and real estate or any interest therein. The Trustee shall at all
times in making investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of information
furnished by the Employer. In making such investments, the Trustee shall not be
restricted to securities or other property of the character expressly authorized
by the applicable law for trust investments; however, the Trustee shall give due
regard to any limitations imposed by the Code or ERISA so that at all times the
Plan may qualify as a qualified profit sharing plan and trust.
(b) The Trustee may employ a bank or trust company pursuant to the terms
of its usual and customary bank agency agreement, under which the duties of such
bank or trust company shall be of a custodial, clerical and record-keeping
nature.
(c) Prior to March 1, 1995, at the election of each Participant, the
Trustee, at the direction of the Administrator, shall apply for, own, and pay
premiums on Contracts on the lives of the Participants. If a life insurance
policy is to be purchased for a Participant, the aggregate premium for ordinary
life insurance for each Participant must be less than 50% of the aggregate of
the contributions and Forfeitures to the credit of the Participant at any
particular time. If term insurance is purchased with such contributions, the
aggregate premium must be less than 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. If both term
insurance and ordinary life insurance are purchased with such contributions, the
amount expended for term insurance plus one-half (1/2) of the premium for
ordinary life insurance may not in the aggregate exceed 25% of the aggregate
contributions and Forfeitures allocated to a Participant's Combined Account. The
Trustee must convert the entire value of the life insurance Contracts at or
before retirement into cash or provide for a periodic income so that no portion
of such value may be used to continue life insurance protection beyond
retirement, or distribute the Contracts to the Participant. Such life insurance
shall cease to be available under this Plan effective March 1, 1995.
7.3 Other Powers of the Trustee. Subject to Section 7.1, the Trustee, in
addition to all powers and authorities under common law, statutory authority,
including the Act, and other provisions of the Plan, shall have the following
powers and authorities, to be exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other property and to
retain the same. In conjunction with the purchase of securities, margin accounts
may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to purchase, or
otherwise dispose of any securities or other property held by the Trustee, by
private contract or at public auction. No person dealing with the Trustee shall
be bound to see to the application of the purchase money or to inquire into the
validity, expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give general
or special proxies or powers of attorney with or without power of substitution;
to exercise any conversion privileges, subscription rights or other options, and
to make any payments incidental thereto; to oppose, or to consent to, or
otherwise participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to pay any
assessments or charges in connection therewith; and generally to exercise any of
the powers of an owner with respect to stocks, bonds, securities, or other
property;
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(d) To cause any securities or other property to be registered in the
Trustee's own name or in the name of one or more of the Trustee's nominees, and
to hold any investments in bearer form, but the books and records of the Trustee
shall at all times show that all such investments are part of the Trust Fund;
(e) To the extent permitted under ERISA, to borrow or raise money for the
purposes of the Plan in such amount, and upon such terms and conditions, as the
Trustee shall deem advisable; and for any sum so borrowed, to issue a promissory
note as Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee shall be
bound to see to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash balances as the
Trustee may, from time to time, deem to be in the best interests of the Plan,
without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem advisable
any securities or other property received or acquired as Trustee hereunder,
whether or not such securities or other property would normally be purchased as
investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be necessary
or appropriate to carry out the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims, debts, or
damages due or owing to or from the Plan, to commence or defend suits or legal
or administrative proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their reasonable
expenses and compensation, and such agent or counsel may or may not be agent or
counsel for the Employer;
(k) To apply for and procure from responsible insurance companies, to be
selected by the Administrator, as an investment of the Trust Fund such annuity,
or other Contracts (on the life of any Participant) as the Administrator shall
deem proper; to exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts; to collect,
receive, and settle for the proceeds of all such annuity or other Contracts as
and when entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings accounts
bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the options are
traded on and purchased through a national securities exchange registered under
the Securities Exchange Act of 1934, as amended, or, if the options are not
traded on a national securities exchange, are guaranteed by a member firm of the
New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(p) To pool all or any of the Trust Fund, from time to time, with assets
belonging to any other qualified employee pension benefit trust created by the
Employer or an affiliated company of the Employer, and to commingle such assets
and make joint or common investments and carry joint accounts on behalf of this
Plan and such other trust or trusts, allocating undivided shares or interests in
such investments or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests; or to invest collectively with the
money and other assets of trusts created by others by causing such money and
other assets to be invested as
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part of any common, collective or commingled trust fund which is qualified under
the provisions of Section 401(a) and exempt under the provisions of Section
501(a) of the Code. The money and other assets of this Trust so added to any
such common, collective or commingled trust fund shall be subject to all of the
provisions of the Declaration of Trust under which such common, commingled or
collective trust fund shall be maintained, which shall constitute a part of this
instrument.
(q) To do all such acts and exercise all such rights and privileges,
although not specifically mentioned herein, as the Trustee may deem necessary to
carry out the purposes of the Plan.
7.4 Loans to Participants.
(a) The Trustee may, on or about the 15th day of each month, upon
direction of the Administrator, make loans to Participants and Former
Participants who are parties in interest, as defined in Section 3(14) of ERISA.
Such loans shall: (1) be made available to all Participants and Former
Participants who are parties in interest on a reasonably equivalent basis; (2)
not be made available to highly compensated employees, officers, or shareholders
in an amount greater than the amount made available to other Participants; (3)
bear a reasonable rate of interest; (4) be adequately secured; and (5) provide
for repayment over a reasonable period of time, all in accordance with
Department of Labor Regulations Section 2550.408b-1, and in accordance with
specific written guidelines set out by the Administrator which shall govern the
terms and administration of loans, and which are incorporated herein by
reference. Notwithstanding any other provision in this Section 7.4, a
Participant with a loan outstanding may not obtain another loan until thirty
(30) or more days after repayment of the previous loan. Any application for a
loan must be received by the Administrator no later than the last day of the
month prior to the proposed loan date, or such other time as may reasonably be
required by the Administrator.
(b) Loans made pursuant to this Section (when added to the outstanding
balance of all other loans made by the Plan to the individual) shall be limited
to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the individual
during the one year period ending on the day before the date
on which such loan is made, over the outstanding balance of
loans from all plans of the Employer to the individual on the
date which such loan was made, or
(2) one-half (1/2) of the present value of the non-forfeitable
Combined Account of the individual under the Plan.
No loan shall be available in an amount less than $1,000.
(c) The period of repayment for any loan shall be arrived at by mutual
agreement between the Administrator and the applicant, but in no event shall
such period exceed five (5) years unless the loan is made in connection with the
purchase, construction, or renovation of the principal residence of the
applicant or a member of his family in which case the loan may be for such
longer period as established by the Administrator. All loans shall require
substantially level amortization with payments of principal and interest due not
less frequently than quarterly.
(d) Each loan shall be made against collateral being the assignment of an
amount equal to fifty percent (50%) of the applicant's right, title and interest
in his nonforfeitable Combined Account determined immediately after the loan is
funded, supported by the applicant's promissory note for the amount of the loan,
including interest, payable to the order of the Trustee. In no event, however,
shall any loan in an amount of $3,500 or more be permitted unless the consent is
first obtained from the spouse of the Participant in a manner consistent with
Section 6.5(a)(2). Such consent must be in writing, must acknowledge the effect
of the loan and must be witnessed by a Plan representative or notary public.
Such consent must be obtained no earlier than the beginning of the 90 day period
that ends on the date on which the loan is to be so secured.
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(e) Each loan shall bear interest at a reasonable rate to be fixed by the
Administrator and, in determining the interest rate, the Administrator shall
take into consideration interest rates currently being charged by financial
institutions on similar loans. In addition, each individual receiving a loan
shall be charged a standard loan origination/processing fee which shall be
determined from time to time by the Administrator based on its estimated costs
incurred in completing a typical loan transaction. The Administrator shall not
discriminate among applicants in the matter of interest rates, but loans granted
at different times may bear different interest rates if, in the opinion of the
Administrator, the difference in rates is justified by, for example, a change in
general economic conditions, credit worthiness of the borrower or the security
given for the loan.
(f) No distribution from the Trust Fund other than a hardship distribution
pursuant to Section 6.10 hereof shall be made to any Participant or Former
Participant or to a Beneficiary of any such Participant unless and until all
unpaid loans from the Trust Fund to such Participant, including accrued interest
thereon, have been discharged.
(g) To the extent permitted by law, the outstanding balance of loans which
are not paid when due may be deducted from any benefit which is or will be in
pay status to which such Participant (or his Beneficiary) is entitled, upon the
occurrence of any distribution event under the Plan.
(h) The Administrator shall adopt in writing such other rules necessary
for the administration of the foregoing provisions. The Administrator reserves
the right to modify the terms of any loan that may be outstanding if necessary
to prevent a violation of ERISA, the Code or other applicable laws.
7.5 Duties of the Trustee Regarding Payments. At the direction of the
Administrator, the Trustee shall, from time to time, in accordance with the
terms of the Plan, make payments out of the Trust Fund. The Trustee shall not be
responsible in any way for the application of such payments.
7.6 Trustee's Compensation and Expenses and Taxes. The Trustee shall be paid
such reasonable compensation as shall from time to time be agreed upon in
writing by the Employer and the Trustee. An individual serving as Trustee who
already receives full-time pay from the Employer shall not receive compensation
from the Plan. In addition, the Trustee shall be reimbursed for any reasonable
expenses, including reasonable counsel fees incurred by it as Trustee. Such
compensation and expenses shall be paid from the Trust Fund unless paid or
advanced by the Employer. All taxes of any kind and all kinds whatsoever that
may be levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7 Annual Report of the Trustee. Within sixty (60) days after the later of the
Anniversary Date or receipt of the Employer's contribution for each Fiscal Year,
the Trustee shall furnish to the Employer and Administrator a written statement
of account with respect to the Fiscal Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or other
disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee and/or Administrator deems
appropriate. The Company, forthwith upon its receipt of each such statement of
account, shall acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof. Failure by the
Company to disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The approval by
the Company of any statement of account shall be binding as to all matters
embraced therein as between the Company and the Trustee to the same extent as if
the account of the Trustee had been settled by judgment or decree in an action
for a judicial settlement of its account in a court of competent
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jurisdiction in which the Trustee, the Company and all persons having or
claiming an interest in the Plan were parties; provided, however, that nothing
herein contained shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.8 Resignation, Removal and Succession of Trustee.
(a) Any Trustee may resign at any time by delivering to the Employer, at
least thirty (30) days before its effective date, a written notice of his
resignation.
(b) The Company may remove any Trustee by mailing by registered or
certified mail, addressed to such Trustee at his last known address, at least
thirty (30) days before its effective date, a written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any Trustee, a
successor may be appointed by the Company; and such successor, upon accepting
such appointment in writing and delivering same to the Company, shall, without
further act, become vested with all the estate, rights, powers, discretions, and
duties of his predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of the Plan.
(d) The Company may designate one or more successors prior to the death,
resignation, incapacity, or removal of a Trustee. In the event a successor is so
designated by the Company and accepts such designation, the successor shall,
without further act, become vested with all the estate, rights, powers,
discretions, and duties of his predecessor with the like effect as if he were
originally named as Trustee herein immediately upon the death, resignation,
incapacity, or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he shall
furnish to the Company and Administrator a written statement of account with
respect to the portion of the Fiscal Year during which he served as Trustee.
This statement shall be either (i) included as part of the annual statement of
account for the Fiscal Year required under Section 7.7 or (ii) set forth in a
special statement. Any such special statement of account should be rendered to
the Company no later than the due date of the annual statement of account for
the Fiscal Year. The procedures set forth in Section 7.7 for the approval by the
Company of annual statements of account shall apply to any special statement of
account rendered hereunder and approval by the Company of any such special
statement in the manner provided in Section 7.7 shall have the same effect upon
the statement as the Employer's approval of an annual statement of account. No
successor to the Trustee shall have any duty or responsibility to investigate
the acts or transactions of any predecessor who has rendered all statements of
account required by Section 7.7 and this subparagraph.
7.9 Separate Trust Agreement. It is anticipated that approximately April 1, 1995
the Company shall replace the Trustee and shall enter into a new, separate trust
agreement with a new Trustee that may supersede or replace certain terms of this
Plan as they relate to the Trust Fund and the Trustee. To the extent that the
terms of any such trust agreement are contrary to the terms of this plan
document, the terms of such trust agreement shall control.
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 Amendment. The Company shall have the right at any time, by action of its
Board of Directors or such Board's delegate, to amend the Plan without the
consent of any Participating Employer. However, no such amendment shall
authorize or permit any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or diverted to
purposes other than for the exclusive benefit of the Participants or their
Beneficiaries or estates; no such amendment shall cause any reduction in the
amount credited to the account of any Participant or cause or permit any portion
of the Trust Fund to revert to or become the property of the Employer. Any such
amendment shall become effective as provided therein upon its execution.
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The Trustee shall not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment affects the
duties of the Trustee hereunder.
For the purposes of this Section, a Plan amendment which has the effect of
eliminating or reducing an early retirement benefit, eliminating an optional
form of benefit (as provided in Treasury regulations) or restricting, directly
or indirectly, the benefit provided to any Participant prior to the amendment
shall be treated as reducing the amount credited to the account of a
Participant.
8.2 Termination. The Company shall have the right at any time, by action of its
Board of Directors or such Board's delegate, to terminate the Plan in whole or
in part. Upon any termination (full or partial), all amounts credited to the
affected Participants' Combined Accounts shall become 100% Vested and shall not
thereafter be subject to forfeiture and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance with the provisions
hereof. Upon such termination of the Plan, the Employer, by written notice to
the Trustee and Administrator, may direct either:
(a) complete distribution of the assets in the Trust Fund to the
Participants, in cash or in kind, in a manner consistent with the requirements
of Section 6.5; or
(b) continuation of the Trust created by this agreement and the
distribution of benefits at such time and in such manner as though the Plan had
not been terminated.
8.3 Merger or Consolidation. This Plan and Trust may be merged or consolidated
with, or all or part of its assets and/or liabilities may be transferred to any
other Plan and Trust only if the benefits which would be received by a
Participant of this Plan, in the event of a termination of the Plan immediately
after such transfer, merger or consolidation, are at least equal to the benefits
the Participant would have received if the Plan had terminated immediately
before the transfer, merger or consolidation.
ARTICLE IX
MISCELLANEOUS
9.1 Participant's Rights. This Plan shall not be deemed to constitute a contract
between the Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant or Employee. Nothing contained
in this Plan shall be deemed to give any Participant or Employee the right to be
retained in the service of the Employer or to interfere with the right of the
Employer to discharge any Participant or Employee at any time regardless of the
effect which such discharge shall have upon him as a Participant of this Plan.
9.2 Alienation.
(a) Subject to the exceptions provided in subsection (b) below and in
Section 9.3, no benefit which shall be payable out of the Trust Fund to any
person (including a Participant or his Beneficiary) shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be subject
to attachment or legal process for or against such person, and the same shall
not be recognized by the Trustee, except to such extent as may be required by
law.
(b) Paragraph (a) hereof shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any provision of the
Plan. At the time a distribution is to be made to or for a Participant's or
Beneficiary's benefit, such proportion of the amount distributed as shall equal
such indebtedness shall be paid by the Trustee to the Trustee or the
Administrator, at the direction of the Administrator, to apply against or
discharge such indebtedness. Prior to making a payment, however, the Participant
or Beneficiary must be given
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written notice by the Administrator that such indebtedness is to be so paid in
whole or part from his Participant's Combined Account. If the Participant or
Beneficiary does not agree that the indebtedness is a valid claim against his
Vested Participant's Combined Account, he shall be entitled to a review of the
validity of the claim in accordance with procedures provided in Sections 2.10
and 2.11.
9.3 Qualified Domestic Relations Orders. Subsection (a) of Section 9.2 shall not
apply to the creation, assignment, or recognition of a right to any benefit
payable with respect to a Participant or Former Participant pursuant to a
domestic relations order, if the order is determined to be a "qualified domestic
relations order," as defined in Section 414(p) of the Code. The Administrator
shall establish a written procedure to determine the qualified status of
domestic relations orders and to administer distributions under such qualified
orders.
Upon receipt of a domestic relations order, the Administrator will notify
the involved Participant or Former Participant and any alternate payee that the
order has been received and will explain the Plan's procedures for determining
whether the order is a qualified domestic relations order as defined in Code
Section 414(p) (a "QDRO"). After determining whether the order is a QDRO, the
Administrator shall notify the involved Participant or Former Participant and
the alternate payee of its determination. If the order is determined to be a
QDRO; the Administrator shall then direct the Trustee to distribute or segregate
the Participant's or Former Participant's Account as provided in the QDRO.
Effective for domestic relations orders received on or after January 1, 1994, if
required by the QDRO, the Trustee shall make distribution prior to the time that
the Participant or Former Participant, whose account is subject to distribution
could have received a distribution.
Once a Participant or Former Participant or any affected alternate payee
receives a notice that a domestic relations order has been received, or if any
such party disagrees with a determination of the Administrator, the party shall
be treated as a claimant and the claims procedure of the Plan shall be followed.
However, such claim must be made by the disagreeing party prior to the date that
a distribution from the Plan is made pursuant to or upon rejection of the
domestic relations order. The Administrator may bring an interpleader action, an
action for a declaratory judgment, or other appropriate action in a court of
competent jurisdiction to determine the proper recipient of the benefits to be
paid by the Plan.
Within a reasonable time after receiving a domestic relations order and
during any period in which the issue of whether the order is a QDRO is being
determined (by the Administrator, by a court of competent jurisdiction, or
otherwise), the Administrator shall separately account for the amounts that
would have been payable to the alternate payee during such period if the order
had been determined to be a QDRO. Such amount may continue to be held segregated
for a reasonable time if the Administrator determines that a domestic relations
order is not a QDRO, but is informed that a revised order will be provided by
one or more of the parties. Similarly, the Administrator may, in its sole
discretion, segregate and hold for a reasonable time amounts from a
Participant's or Former Participant's Account where the Administrator has not
received a domestic relations order, but has been notified that a QDRO is
forthcoming. If deemed necessary or appropriate by the Administrator, the
Administrator may submit segregated amounts to a court of competent jurisdiction
until resolution of the matter.
If, within the eighteen (18) month period beginning on the date on which
the first payment would be required to be made under the domestic relations
order, the order (or modification thereof) is determined to be a QDRO, the
Administrator shall pay the segregated amounts, including any earnings thereon,
to the person or persons entitled thereto. If within such eighteen (18) month
period it is determined that the order is not a QDRO or such issue is not
resolved, then the Administrator shall, as appropriate, restore the segregated
amounts, including any earnings thereon, to the Participant's or Former
Participant's appropriate account in the Plan or pay the segregated amounts,
including any earnings thereon, to the person or persons, if any, who would have
been entitled to such amounts if there had been no order. Any determination that
an order is a QDRO that is made after the close of the eighteen (18) month
period shall be applied prospectively only. If a QDRO requires a payment to be
made from the Plan that exceeds the Participant's Combined Account that is
unencumbered by a loan described in Section 7.4, to the extent permissible under
the loan note the Administrator may, in its sole discretion, deem such loan to
be in default and accelerate payments thereunder in order to distribute amounts
required under the QDRO.
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9.4 Construction of Plan. This Plan and Trust shall be construed and enforced
according to the Act and the laws of the State of Michigan, other than its laws
respecting choice of law, to the extent not preempted by ERISA.
9.5 Gender and Number. Wherever any words are used herein in the masculine,
feminine or neuter gender, they shall be construed as though they were also used
in another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
9.6 Legal Action. In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled to be
reimbursed from the Trust Fund for any and all costs, attorney's fees, and other
expenses pertaining thereto incurred by them for which they shall have become
liable.
9.7 Prohibition Against Diversion of Funds.
(a) Except as provided below and otherwise specifically permitted by law,
it shall be impossible by operation of the Plan or of the Trust, by termination
of either, by power of revocation or amendment, by the happening of any
contingency, by collateral arrangement or by any other means, for any part of
the corpus or income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Former Participants, or their
Beneficiaries, or the payment of taxes or reasonable expenses of administration.
(b) In the event the Employer shall make an excessive contribution under a
mistake of fact pursuant to ERISA Section 403(c)(2)(A), the Employer may demand
repayment of such excessive contribution at anytime within one (1) year
following the time of payment and the Trustee shall return such amount to the
Employer within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
9.8 Bonding. Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no preceding Plan Year, then by the amount of the funds to be handled
during the then current year. The bond shall provide protection to the Plan
against any loss by reason of acts of fraud or dishonesty by the Fiduciary alone
or in connivance with others. The surety shall be a corporate surety company (as
such term is used in ERISA Section 412(a)(2)), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything in the Plan to the
contrary, the cost of such bonds shall be an expense of the Employer.
9.9 Employer's and Trustee's Protective Clause. Neither the Employer nor the
Trustee, nor their successors, shall be responsible for the validity of any
Contract issued hereunder or for the failure on the part of the insurer to make
payments provided by any such Contract, or for the action of any person which
may delay payment or render a Contract null and void or unenforceable in whole
or part.
9.10 Insurer's Protective Clause. Any insurer who shall issue Contracts
hereunder shall not have any responsibility for the validity of this Plan or for
the tax or legal aspects of this Plan. The insurer shall be protected and held
harmless in acting in accordance with any written direction of the Trustee, and
shall have no duty to see to the application of any funds paid to the Trustee,
nor be required to question any actions directed by the Trustee. Regardless of
any provision of this Plan, the insurer shall not be required to take or permit
any action or allow any benefit or privilege contrary to the terms of any
Contract which it issues hereunder, or the rules of the insurer.
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9.11 Receipt and Release for Payments. Any payment to any Participant or Former
Participant, his legal representative, Beneficiary, or to any guardian or
committee appointed for such Participant or Beneficiary in accordance with the
provisions of the Plan, shall, to the extent thereof, be in full satisfaction of
all claims hereunder against the Trustee and the Employer, either of whom may
require such Participant, Former Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
9.12 Action by the Employer. Whenever the Employer or the Company under the
terms of the Plan is permitted or required to do or perform any act or matter or
thing, it shall be done and performed by a person duly authorized by its legally
contributed authority.
9.13 Named Fiduciaries, and Allocation of Responsibility. The "named
Fiduciaries" of this Plan are (1) the Company, (2) the Administrator and (3) the
Trustee. The named Fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given them under the Plan.
In general, the Employer shall have the sole responsibility for making the
contributions provided for under Section 4.1. The Company shall have the sole
authority (i) to appoint and remove the Trustee and the Administrator, (ii) to
formulate the Plan's "funding policy and method", and (iii) to amend or
terminate, in whole or in part, the Plan. The Administrator shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets held under the Trust, except those
assets, the management of which has been assigned to an Investment Manager, who
shall be solely responsible for the management of the assets assigned to it, all
as specifically provided in the Plan. Each named Fiduciary warrants that any
directions given, information furnished, or action taken by it shall be in
accordance with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may rely
upon any such direction, information or action of another named Fiduciary as
being proper under the Plan, and is not required under the Plan to inquire into
the propriety of any such direction, information or action. It is intended under
the Plan that each named Fiduciary shall be responsible for the proper exercise
of its own powers, duties, responsibilities and obligations under the Plan. No
named Fiduciary shall guarantee the Trust Fund in any manner against investment
loss or depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity.
9.14 Headings. The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.15 Approval by Internal Revenue Service.
(a) The plan is intended to qualify as a profit-sharing plan under Section
401(a) and related provisions of the Code. Notwithstanding anything herein to
the contrary, if, pursuant to an application filed by or in behalf of the Plan,
the Commissioner of Internal Revenue Service or his delegate should determine
that the Plan as amended and restated does not qualify as a tax-exempt plan and
trust under Sections 401 and 501 of the Code, and such determination is not
contested, or if contested, is finally upheld, then the Company may elect that
Plan shall operate as if it had not been amended and restated.
(b) Notwithstanding any provisions to the contrary, except Sections 3.6,
3.7, and 4.1(d), any contribution by the Employer to the Trust Fund is
conditioned upon the deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the Employer may
within one (1) year following a final determination of the disallowance, whether
by agreement with the Internal Revenue Service or by final decision of a court
of competent jurisdiction, demand repayment of such disallowed contribution and
the Trustee shall return such contribution within one (1) year following the
disallowance. Earnings of the Plan attributable to the excess contribution may
not be returned to the Employer, but any losses attributable thereto must reduce
the amount so returned.
9.16 Uniformity. All provisions of this Plan shall be interpreted and applied in
a uniform, nondiscriminatory manner.
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ARTICLE X
PARTICIPATING EMPLOYERS
10.1 Adoption by Other Employers. Notwithstanding anything herein to the
contrary, with the consent of the Company, any Affiliated Employer may adopt
this Plan and all of the provisions hereof, and participate herein and be known
as a Participating Employer, by a properly executed document evidencing said
intent and will of such Participating Employer.
10.2 Requirements of Participating Employers.
(a) Each such Participating Employer shall be required to use the same
Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle, hold and
invest as one Trust Fund all contributions made by Participating Employers, as
well as all increments thereof.
(c) The transfer of any Participant from or to an Employer participating
in this Plan, whether he be an Employee of the Employer or a Participating
Employer, shall not affect such Participant's rights under the Plan, and all
amounts credited to such Participant's Combined Account as well as his
accumulated service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) Any expenses of the Trust which are to be paid by the Employer or
borne by the Trust Fund shall be paid by each Participating Employer in the same
proportion that the total amount standing to the credit of all Participants
employed by such Employer bears to the total standing to the credit of all
Participants.
10.3 Designation of Agent. Each Participating Employer shall be deemed to be a
part of this Plan; provided, however, that with respect to all of its relations
with the Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Company as its agent. Unless the context of the Plan clearly indicates the
contrary, the word "Employer" shall be deemed to include each Participating
Employer as related to its adoption of the Plan.
10.4 Employee Transfers. It is anticipated that an Employee may be transferred
between Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and eligibility.
No such transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred. In the
event that an Employee of a Participating Employer is transferred to a
non-participating Affiliated Employer, the Employee shall be treated in the
manner set forth in Section 3.5.
10.5 Participating Employers Contribution. All contributions made by a
Participating Employer, as provided for in this Plan, shall be determined
separately by each Participating Employer, and shall be paid to and held by the
Trustee for the exclusive benefit of the Employees of such Participating
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. Subject to Section 4.6, any Forfeiture by an Employee
of a Participating Employer subject to allocation during each Plan Year shall be
allocated only for the exclusive benefit of the Participants of such
Participating Employer in accordance with the provisions of this Plan. On the
basis of the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Employer shall immediately notify the Trustee
thereof.
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10.6 Discontinuance of Participation. Any Participating Employer shall be
permitted to discontinue or revoke its participation in the Plan. At the time of
any such discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee. The Trustee
shall thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to such new
Trustee as shall have been designated by such Participating Employer, in the
event that it has established a separate pension plan for its Employees. If no
successor is designated, except as otherwise provided herein, the Trustee shall
retain such assets for the Employees of said Participating Employer pursuant to
the provisions of Article VII hereof.
10.7 Administrator's Authority. The Administrator shall have authority to make
any and all necessary rules or regulations, binding upon all Participating
Employers and all Participants, to effectuate the purpose of this Article.
ARTICLE XI
SPECIAL PROVISIONS RELATING TO THE MERGER OF THE GRISWOLD PLAN
Effective as of January 1, 1990, the Griswold, Inc. Profit Sharing Trust
(the "Griswold Plan") was merged with and into this Plan.
The amounts allocated to each participant in the Griswold Plan as of
December 31, 1989 became credited as of January 1, 1990 to his accounts in this
Plan as follows: (i) Any amounts attributable to elective deferrals of such
participant under the Griswold Plan were allocated to his Elective Account and
shall at all times be fully vested and nonforfeitable, (ii) any amounts
attributable to voluntary contributions of such Participant under the Griswold
Plan were allocated to a Voluntary Contributions Account established in his name
and shall at all times be fully vested and nonforfeitable, and (iii) any amount
attributable to discretionary contributions by Griswold, Inc. under the Griswold
Plan were allocated to his Profit Sharing Account. The vesting of amounts
described in (iii) shall be determined, at the election of the Participant
(which election may be made at any time prior to the distribution of his Profit
Sharing Account) under either the vesting schedule set forth in Section 6.4(a)
hereof or the vesting provisions of the Griswold Plan as in effect immediately
prior to the merger. Amounts transferred from the Griswold Plan shall be subject
to the terms and provisions of this Plan and shall be invested in accordance
with Section 7.1 in the same manner as other amounts credited to the
Participant's Elective Account, Rollover Account and the Profit Sharing Account,
as the case may be. The provisions of Section 7.1 relating to the investment of
such Accounts also shall be applicable to amounts credited to a Participant's
Voluntary Contribution Account. However, notwithstanding any terms of this Plan
to the contrary, a Participant may withdraw in cash from his or her Voluntary
Contribution Account, all or any portion of the lesser of (a) the amount of
voluntary contributions that such Participant made to the Griswold Plan or (b)
the value of such Participant's Voluntary Contribution Account as of the most
recent Valuation Date. In the event a conflict between any other provisions of
this Plan and this Article XI, this Article XI shall prevail.
ARTICLE XII
TOP-HEAVY PLAN RULES
12.1 Application of Top-Heavy Plan Rules. If, for any Plan Year, the Plan is
"Top-Heavy" as determined under Section 12.3, then the requirements in Section
12.4 shall apply to the Plan to the extent indicated by that Section.
12.2 Special Definitions. For purposes of this Article Twelve, the following
terms shall have the meanings indicated:
(a) Determination Date - With respect to any Plan Year, the last day of
the preceding Plan Year. Where one or more other plans are required or permitted
to be aggregated with this Plan under Section 12.3 and where all plan years of
all such plans do not coincide, the Key Employee Sum and the All Employee Sum in
Section 12.3
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each shall be determined separately for each plan as of its appropriate
Determination Date, and the results shall then be combined for the Determination
Dates falling within the same calendar year.
(b) Employee - A Common-Law Employee of an Employer who is or once was a
Participant, including his Beneficiary, but excluding any Employee who is a
member of a unit of Employees covered by a collective bargaining agreement under
which retirement benefits were the subject of good faith bargaining with the
Employer unless a member of such unit is a Key Employee, and excluding any
Employee who has not performed any service for the Employer within the five-year
period ending on the determination date.
(c) Key Employee - Each Employee or former Employee (including the
beneficiary of either) who, at any time during the Plan Year containing the
Determination Date or any of the four preceding Plan Years received Compensation
from the Employer and who:
(1) is one of the fifty (or if fewer, the greater of 3 or 10% of all
Employees) officers of the Employer who had the largest Compensation in the
five-year period ending on the last day of the current Plan Year but only if
such officer's Compensation exceeds fifty (50) percent of the dollar limitation
of Code Section 415(b)(1)(A) in effect for the calendar year in which the
Determination Date falls;
(2) is one of the ten (10) Employees owning the largest interest in
the Employer and who has Compensation from the Employer in an amount greater
than the dollar limitation of Code Section 415(c)(1)(A) in effect for the
calendar year in which the Determination Date falls;
(3) owns five percent (5%) or more of the outstanding stock or
voting power of all stock of the Employer; or
(4) owns more than one percent (1%) of the outstanding stock or
voting power of all stock of the Employer and has annual compensation from the
Employer of more than $150,000. Annual compensation means compensation as
defined in Code Section 415(c)(3), but including amounts contributed by the
Employer pursuant to a salary reduction agreement which are excludable from the
Employee's gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b).
The determination of who is a Key Employee will be made in
accordance with Code Section 416(i)(1) and the regulations thereunder. For
purpose of this determination, Compensation shall mean "compensation" as defined
in Code Section 415(c)(3), but including Employer contributions made pursuant to
a salary reduction agreement.
For purposes of (2), (3) and (4), the constructive ownership rules
of Code Section 318 shall apply with the modification that 5% shall be
substituted for 50% appearing in Code Section 318(a)(2). For purposes of (2), an
Employee shall be considered a Key Employee even if he is not among the ten
largest owners if his ownership interest in the Employer is not less than at
least one of the top ten (10) owners and provided he has the requisite level of
Compensation described in (2); and in the event two (2) Employees have the same
ownership interest in the Employer, the Employee with the greater Compensation
shall be regarded as having the larger ownership interest. For purposes of (2),
(3) and (4), each Employer that otherwise would be aggregated under this
Article's definition of Employer shall be treated as a separate Employer to
determine ownership percentages.
(d) Valuation Date - The date used for computing plan costs for minimum
funding in the case of any defined benefit plan and the last day of the Plan
Year in the case of any defined contribution plan, including this Plan.
(e) Years of Service - An Employee's Years of Service for vesting purposes
as determined under Article I.
(f) Employer - The Employer sponsoring this Plan and any other company
which would be included in the same "controlled group" as the Employer as
defined in Code Section 414(b), or which is under "common control"
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with the Employer as defined in Code Section 414(c), or which is included in the
same "affiliated service group" as defined in Code Section 414(m), or any other
entity required to be aggregated with the Employer pursuant to regulations under
Code Section 414(o).
(g) Any reference herein to a "plan" means a stock bonus, pension or
profit-sharing plan of the Employer for the exclusive benefit of its employees
or their beneficiaries, including this Plan.
(h) Non-Key Employee - Any Employee or former Employee (including the
beneficiary of either) who is not a Key Employee.
12.3 Determination of Top-Heavy Status. Determination of whether the Plan is
Top-Heavy for any Plan Year shall be made as follows:
(a) Required Plan Aggregation - First, there shall be aggregated with the
Plan: (1) each plan of the Employer in which a Key Employee is a Participant or
participated at any time during the Plan Year which contains the Determination
Date, regardless of whether the Plan has been terminated, and (ii) each other
plan of the Employer which enables a plan described in (1) to meet the
requirements of Code Sections 401(a)(4) or 410. The required aggregation group
shall include any terminated plan of the Employer if it was maintained within
the last five years ending on the Determination Date.
(b) Key Employee Sum - Second, there shall be computed, as of the
Determination Date, the account balances of all Key Employees under all defined
contribution plans including this Plan required to be aggregated under (a) and
the present value of accrued benefits of all Key Employees under all defined
benefit plans required to be aggregated under (a).
For purposes of this computation, "account balance" means the
account balance as of the most recent Valuation Date occurring within a 12-month
period ending on the Determination Date, plus an adjustment for contributions
due as of the Determination Date. In the case of a profit sharing plan or other
plan not subject to the minimum funding requirements of Code Section 412, the
adjustment is the amount of any contributions actually made after the Valuation
Date but on or before the Determination Date, except that in the first Plan Year
after a Plan is adopted, the adjustment shall include any contributions made
after the Determination Date that are allocated as of a date within the first
Plan Year. In the case of a money purchase pension plan or defined benefit plan
subject to the minimum funding requirements of Code Section 412, the adjustment
is the amount of any contributions that would be allocated as of a date not
later than the Determination Date, even though such amount is not yet required
to be contributed, plus the amount of any contribution actually made (or due to
be made) on or before the Valuation Date but prior to the expiration of the
extended payment period under Code Section 412(c)(10).
For purposes of this computation: (i) there shall be included in the
Key Employee Sum any distribution (other than rollover amounts or plan-to-plan
transfers not initiated by the Employee or made to another plan maintained by
the Employer) made to an Employee from the Plan, or from another plan required
to be aggregated under (a), within the five-year period ending on the
Determination Date; (ii) there shall be excluded from the Key Employee Sum any
rollover contribution and any plan-to-plan transfer initiated by the Employee
and accepted after December 31, 1983, by any plan required to be aggregated
under (a) from a plan other than one maintained by the Employer; (iii) there
shall be excluded from the Key Employee Sum the account balance and present
value of the accrued benefit of any Employee who formerly was a Key Employee but
who is a Non-Key Employee for the year ending on the Determination Date; and
(iv) there shall be excluded from the Key Employee Sum any amounts attributable
to tax deductible employee contributions.
(c) All Employee Sum - Third, under the same procedures as set forth in
(b) above, including the special rules in (i), (ii), and (iii), there shall be
computed the sum of present values of accrued benefits and account balances for
all Employees of the Employer. The accrued benefit of a Participant other than a
Key Employee shall be determined under the method, if any, that uniformly
applies for accrual purposes under all defined benefit plans
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maintained by the Employer, or if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permitted under the
fractional rule of Code Section 411(b)(1)(C).
(d) Top-Heavy Test Fraction - Fourth, the Key Employee Sum computed in (b)
shall be divided by the All Employee Sum computed in (c), and if the resulting
fraction is 0.60 or less, neither this Plan nor any plan required to be
aggregated under (a) is Top-Heavy for the Fiscal Year. If the fraction is
greater than 0.60, both this Plan and any plan required to be aggregated under
(a) are Top-Heavy for the Fiscal Year unless, after the permissive plan
aggregation described in (e) below, the recomputed fraction is 0.60 or less.
(e) Permissive Plan Aggregation - Fifth, at the election of the Employer,
plans of the Employer, other than those required to be aggregated under (a) but
which provide benefits or contributions comparable to this Plan, may be
aggregated with this Plan and the plans required to be aggregated under (a),
provided that such aggregated group would meet the requirements of Code Sections
401(a)(4) and 410. The computations under subsections (b) through (d) above may
then be repeated, based on this permissively aggregated group, and if the
fraction computed in subsection (d) is 0.60 or less for this group, then neither
this Plan nor any plan required to be aggregated under (a) is Top-Heavy for the
Fiscal Year. If the fraction computed in subsection (d) is still greater than
0.60, both this Plan and any plan required to be aggregated under (a) are
Top-Heavy for the Plan Year, but no plan which is permissively aggregated under
this subparagraph (e) will be deemed to be Top-Heavy for such reason.
12.4 Superseding Rules.
(a) For each Plan Year that the Plan is Top-Heavy, the provisions of
subsections (b), (c), (d), (e) and (f) of this Section 12.4 are mandatory and
shall apply to the Plan for that Plan Year, notwithstanding any other provision
or provisions of the Plan that may conflict with or vary from said mandatory
provisions.
(b) Compensation Limit - Compensation of any Employee from the Employer
shall be disregarded for all purposes under the Plan to the extent such
Compensation exceeds $150,000 (or such higher cost-of-living adjusted amount as
determined from time to time by the Secretary of the Treasury).
(c) Minimum Contributions for Non-Key Employee Participants -
Contributions by the Employer for each Participant who is a Non-Key Employee who
is employed by the Employer on the last day of the Plan Year regardless of the
Hours of Service credited to the Participant during that Plan Year shall be
equal to the lesser of: (i) 3% of the Participant's Compensation for that Plan
Year; or (ii) the maximum percentage of the Employer's contributions (as a
percentage of Compensation not in excess of $150,000) allocated to the account
of any Participant who is a Key Employee for the Plan Year multiplied by the
Non-Key Employee's Compensation for that Plan Year. For purposes of this
subsection (c), Employer contributions made under any other defined contribution
plan of the Employer in which any Key Employee participates or which enables
another defined contribution plan of the Employer to meet the requirements of
either Section 401(a)(4) or 410 of the Code shall be considered contributions
made under this Plan. Notwithstanding the foregoing, in the event that the
contribution to be allocated to the account of the Non-Key Employee under the
provisions of the Section 5.3 is greater than the contribution which would be
made under this subsection (c), the provisions of Section 5.3 shall prevail. For
purposes of this Section 12.4, an Employee's Compensation shall mean
compensation as described in regulation section 1.415-2(d).
(d) Accelerated Vesting - A Participant's vested percentage in the portion
of his account balance derived from Employer contributions shall be determined
in accordance with the following schedule, but only to the extent it provides a
greater vested percentage for such Participant's Years of Service than the
vesting schedule in Section 6.5, and only with respect to those who are
Participants during part or all of the Plan Year after the Plan becomes
Top-Heavy:
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Years of Service Vested Percentage
---------------- -----------------
0-1 0%
2 20%
3 40%
4 60%
5 80%
6 100%
This minimum vesting schedule applies to all benefits within the meaning
of Code Section 411(a)(7) except those attributable to Participant
contributions, including benefits accrued before the effective date of Code
Section 416 and benefits accrued before the Plan became top-heavy. Further, no
decrease in a Participant's nonforfeitable percentage may occur in the event the
Plan's status as top-heavy changes for any Plan Year. However, this Section does
not apply to the Account balances of any Participant who does not have an Hour
of Service after the Plan has initially become top-heavy and such Participant's
Profit Sharing Contribution Account and Matching Contribution Account will be
determined without regard to this Section.
(e) Latest Distribution Date for Key Employees-Distribution of each Key
Employee Participant's account balance shall commence on or be made no later
than the taxable year (of the Participant) in which he attains age 70-1/2
without regard to whether the Participant has retired at such time.
12.5 Participation in More Than One Top-Heavy Plan. For each Plan Year that the
Plan is Top-Heavy and subject to the provisions of Section 12.4(c), in the event
that a Non-Key Employee is a Participant in both this Plan and a defined benefit
plan of the Employer in the same Plan Year, such Non-Key Employee shall not be
entitled to a minimum allocation under this Plan as specified in Section 12.4(c)
but instead shall receive the required Top-Heavy minimum benefit under the
defined benefit plan.
ARTICLE XIII
SPECIAL PROVISIONS RELATED TO SPINOFF OF
ANTHONY M. FRANCO, INC.
In connection with the sale by Ross Roy Group of its interest in Anthony
M. Franco Incorporated ("Franco"), on or within a reasonable period after May
15, 1994 (the "Spinoff Date"), the following assets of the Plan will be
transferred to the Anthony M. Franco Incorporated Employee Savings and
Investment Plan and Trust (the "Franco Plan"):
(a) The Combined Accounts of all Participants who are employed by Franco
on the Spinoff Date and who are not employed (or co-employed) by the Company or
another Participating Employer as of the Spinoff Date;
(b) The Combined Accounts of Former Participants who are not employed by a
Participating Employer on the Spinoff Date, but who were last Participants while
employed by Franco; and
(c) The Suspense Accounts as of the Transaction Date attributable to
previous Profit Sharing Contributions made by Franco.
The sum of the account balances for each of the participants in the Plan
and the Franco Plan (taken together) immediately after the spinoff shall equal
the account balances of such participant in the Plan and the Franco Plan (taken
together) immediately prior to the spinoff.
As a result of the spinoff described in this ARTICLE XIII, the Franco Plan
shall succeed and replace this Plan with regard to all obligations of this Plan
relating to the assets transferred to the Franco Plan and all Participants
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and Former Participants described in (a) and (b) above or on whose account
amounts described in (c) were held, and shall reimburse the Plan for any
restoration of amounts from Suspense Accounts required under the Plan with
regard to individuals described in (a) or (b) above who again become active
Participants under this Plan after the Transaction Date.
In the event of a conflict between the provisions of this ARTICLE XIII and
other provisions of this Plan, this ARTICLE XIII will control.
ARTICLE XIV
TRANSFER FROM ROSS ROY, INC. PENSION PLAN
In the event of a transfer of assets to this Plan from the Ross Roy, Inc.
Pension Plan (the "Pension Plan") pursuant to Code Section 4980(d) in connection
with the termination of the Pension Plan, such amounts transferred (the
"Transferred Amounts") shall, as of the date of such transfer (the "Transfer
Date"), be credited to a suspense account in this Plan and shall be allocated to
Participant accounts, as described below, no less rapidly than ratably over the
7-Plan Year period beginning with the year of the transfer.
Transferred Amounts shall be allocated to Participant Matching Accounts as
Matching Contributions declared by the Company pursuant to Section 4.3 and to
Participant Profit Sharing Accounts as Profit Sharing Contributions declared by
the Company pursuant to Section 4.4, until such time as all assets have been
transferred out of such suspense account. All Matching Contributions and Profit
Sharing Contributions of the Company to be allocated to Participant Matching and
Profit Sharing Accounts shall be made from such suspense account until all
assets have been transferred out of such suspense account.
IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
ROSS ROY COMMUNICATIONS, INC.
By /s/ Kimberly Wright
--------------------------
Its: Benefits Manager
------------------------
/s/ Chris A. Lawson
-----------------------------
CHRIS A. LAWSON, TRUSTEE
/s/ Rita Lindholm
-----------------------------
RITA LINDHOLM, TRUSTEE
/s/ Tim Copacia
-----------------------------
TIM COPACIA, TRUSTEE
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SECOND AMENDMENT TO THE 1994 RESTATEMENT OF THE
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
THIS SECOND AMENDMENT, adopted by Ross Roy Communications, Inc.
(hereinafter referred to as the "Company") as of the date set forth at the
bottom hereof.
WHEREAS, the Company sponsors the Ross Roy Communications, Inc. Employee
Savings Plan and Trust (the "Plan"), which was most recently amended and
restated effective January 1, 1994;
WHEREAS FURTHER, pursuant to Section 8.1 of the Plan, the Company has the
power to amend the Plan.
NOW, THEREFORE, the Company hereby amends the Plan to provide as follows,
such amendment to be effective as of January 1, 1995 except as otherwise
provided herein.
1. The last paragraph of Section 1.25 of the Plan is hereby amended in its
entirety to read as follows:
Notwithstanding the foregoing, any individual employed by an
Employer or an Affiliated Employer whose compensation is not computed on
the basis of hours worked (such as a salaried employee) shall be credited
with ninety-five (95) Hours of Service for each semi-monthly pay period
during which he is entitled to receive compensation from the Employer or
Affiliated Employer for the performance of services described in
subsection (1) above or during which such individual performs no duties
but is entitled to Hours of Service under subsections (2) or (3) above.
2. Section 4.7 of the Plan is hereby amended in its entirety to read as
follows:
4.7 Allocation of Forfeitures. As of each Anniversary Date any
amounts which became Forfeitures since the last Anniversary Date shall
first be made available to reinstate previously forfeited account balances
of Former Participants, if any, in accordance with Section 6.4.
Forfeitures will next be used to pay reasonable expenses of administering
the Plan. The remaining Forfeitures, if any, shall be used to reduce the
Employer's Matching Contribution and, if any still remain, the Employer's
Profit Sharing Contribution; provided, however, that in the event the
allocation of Forfeitures provided herein shall cause the "annual
addition" (as defined in Section 4.11) to any Participant to exceed the
amount allowable by the Code,
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the excess shill be reallocated in accordance with Section 4.12. During an
Employer's existence, the Forfeitures attributable to Participants of such
Employer shall be allocated separately so that only Participants employed
by such Employer shall share therein. If an Employer is dissolved, sold,
or otherwise ceases to have Employees, Forfeitures attributable to
Participants of such Employer shall be treated as if they were forfeitures
attributable to Employees of the Company. In the event that forfeitures
remain after a full offset of the Matching Contribution and no Profit
Sharing Contribution is made in a given year, Forfeitures which would
otherwise be used to offset Profit Sharing Contributions for such year
shall be allocated among the Participants' Accounts in the same manner as
a Profit Sharing Contribution of such amount would have been allocated for
such year.
3. Section 7.4(a) of the Plan is hereby amended in its entirety to read as
follows:
(a) The Trustee may, on or about the 15th day of each month, upon
direction of the Administrator, make loans to Participants and Former
Participants who are parties in interest, as defined in Section 3(14) of
ERISA. Such loans shall: (1) be made available to all Participants and
Former Participants who are parties in interest on a reasonably equivalent
basis; (2) not be made available to highly compensated employees,
officers, or shareholders in an amount greater than the amount made
available to other Participants; (3) bear a reasonable rate of interest;
(4) be adequately secured; and (5) provide for repayment over a reasonable
period of time, all in accordance with Department of Labor Regulations
Section 2550.408b-1, and in accordance with specific written guidelines
set out by the Administrator which shall govern the terms and
administration of loans, and which are incorporated herein by reference. A
Participant may have up to two loans outstanding at any time.
Notwithstanding any other provision in this Section 7.4, a Participant
with two loans outstanding may not obtain another loan until thirty (30)
or more days after repayment of one of the previous loans. Any application
for a loan must be received by the Administrator no later than the last
day of the month prior to the proposed loan date, or such other time as
may reasonably be required by the Administrator.
4. Section 7.4(c) shall be amended by adding the following at the end
thereof, effective January 1, 1996:
All outstanding loans made on or after January 1, 1996 shall become
due and payable upon demand by the Administrator if the Participant's
employment with the Employer terminates.
2
<PAGE>
IN WITNESS WHEREOF, this Amendment has been executed this 22 day of
December, 1995.
ROSS ROY COMMUNICATIONS, INC.
By /s/ David Jansen
-------------------------------------
Its: Sr. V.P., Director, Human Resources
-----------------------------------
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<PAGE>
THIRD AMENDMENT TO THE 1994 RESTATEMENT OF THE
ROSS ROY COMMUNICATIONS, INC.
EMPLOYEE SAVINGS AND INVESTMENT PLAN AND TRUST
THIS THIRD AMENDMENT, adopted by Ross Roy Communications, Inc.
(hereinafter referred to as the "Company") as of the date set forth at the
bottom hereof.
WHEREAS, the Company sponsors the Ross Roy Communications, Inc. Employee
Savings Plan and Trust (the "Plan"), which was most recently amended effective
January 1, 1995;
WHEREAS FURTHER, pursuant to Section 8.1 of the Plan, the Company has the
power to amend the Plan.
NOW, THEREFORE, the Company hereby amends the Plan to provide as follows,
such amendment to be effective as of January 1, 1997 except as otherwise
provided herein.
1. Section 1.8 of the Plan is hereby amended in its entirety as follows:
1.8 "Compensation" with respect to any Participant means such
Participant's regular salary, wages and lump sum merit pay paid by the
Employer for a Calendar Year, but excluding overtime, commissions,
bonuses, and any credits to a flexible benefit plan. Employee Compensation
that is deferred pursuant to Section 4.2 shall be included as
Compensation, but other amounts contributed by the Employer under the Plan
and any non-taxable fringe benefits shall not be considered as
Compensation.
For purposes of Section 4.9 and Section 4.10, "Compensation" with respect
to any Participant means his Deferred Compensation plus compensation which
is currently includable in gross income as provided for under Code Section
414(s); provided, however, that, for such purposes, the Administrator may
elect to use any other definition of Compensation permitted by Sections
401(k) and (m) of the Code and the regulations thereunder.
For a Participant's initial year of participation in either the 401(k)
Portion or Profit Sharing Portion of the Plan, Compensation shall be
recognized only for the part of the year in which the Participant is
eligible to participate in that portion of the Plan to which such
Compensation relates (i.e., for purposes of the 401(k) Portion of the
Plan, only Compensation during the part of the year during which the
Participant was eligible to participate in the 401(k) Portion shall be
recognized; for purposes of the Profit Sharing Portion of the Plan, only
Compensation during the part of the year in which the
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<PAGE>
Participant participated in the Profit Sharing Portion of the Plan shall
be recognized). Compensation in excess of $150,000 shall be disregarded.
Such amount shall be adjusted at the same time and in such manner as
permitted under Code Section 401(a)(17)(B). In determining the
compensation of a Participant for purposes of this limitation, the rules
defining Highly Compensated Employee found in Code Section 414(q)(6) shall
apply.
2. Section 1.23 is hereby amended in its entirety as follows:
1.23 "Highly Compensated Employee" shall include highly compensated active
employees and highly compensated former employees. A highly compensated
active employee includes any Employee who performs service for the
Association during the determination year and who, during the look-back
year received Compensation from the Association in excess of $80,000 (as
adjusted pursuant to Code Section 415(d)), or who was a 5-percent owner at
any time during the determination year or the look-back year. For this
purpose, the determination year shall be the Plan Year. The look-back year
shall be the twelve-month period immediately preceding the determination
year.
A highly compensated former employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performed no service for the Association during the determination
year, and was a highly compensated active employee for either the
separation year or any determination year ending on or after the
employee's 55th birthday..
The determination of who is a Highly Compensated Employee will be made in
accordance with Section 414(q) of the Code and the regulations thereunder.
3. New Sections 1.54 and 1.55 are hereby added to the Plan, which shall read
as follows:
1.54 "Company Stock" means the common stock of Omnicom Group Inc., which
is traded on the New York Stock Exchange.
1.55 "Company Stock Fund" means the investment fund available under the
Plan which invests and reinvests in Company Stock (or in highly liquid
short term investments or cash pending investment in Stock or pending
distribution). No Company Stock to be purchased by the Trustee for
inclusion in the Company Stock Fund shall be purchased by the Trustee
directly from the Company or any Affiliated Employer.
4. Section 3.1 shall be clarified to read as follows:
3.1 Conditions of Eligibility.
(a) Any Eligible Employee most recently hired before March 1, 1993
(or
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originally hired before March 1, 1993 and rehired pursuant to
Section 3.3(b)(3)) who has reached his 21st birthday and who
either (i) has completed three (3) months of continuous
employment and is expected to complete 1,000 Hours of Service
within twelve months after his employment commencement date or
(ii) has completed a Year of Service, shall be eligible to
participate hereunder as of the effective date of
participation (as described in Section 3.3) coinciding with or
next following the date he has satisfied such requirements.
(b) Subject to subsection (c) below, any Eligible Employee who is
hired or rehired on or after March 1, 1993 (unless rehired as
described in subsection (a)) shall be eligible to participate
hereunder on the effective date of participation (as described
in Section 3.3) coinciding with or next following the date he
or she has completed a Year of Service and attained age 21.
(c) Notwithstanding subsection (b) above, as of April 1, 1995, any
Eligible Employee not already participating in the 401(k)
Portion of this Plan and any newly hired or rehired Eligible
Employee shall be eligible to participate in the 401(k)
Portion (but not the Profit Sharing Portion) of this Plan on
April 1, 1995, if such Eligible Employee has completed three
months of service with the Employer and attained age 21.
Thereafter, any Eligible Employee not already participating in
the 401(k) Portion of this Plan and any newly hired or rehired
Eligible Employee shall be eligible to participate in the
401(k) Portion (but not the Profit Sharing Portion) of this
Plan on the effective date of participation (as described in
Section 3.3) coinciding with or next following the date such
Eligible Employee has completed three months of service with
the Employer and attained age 21. For purposes of this
section, an Eligible Employee will be deemed to have completed
three months of service if he is in the continuous employ of
the Employer for three months after his or her date of hire.
For purposes of this section, an Employee's date of hire is
the date the Employee commences employment with the Employer.
5. Section 4.9 is hereby amended in its entirety as follows:
4.9 Actual Deferral Percentage Testing. Notwithstanding the terms of
Section 4.1, the Average Deferral Percentage ("ADP") for Highly
Compensated Participants shall not exceed the greater of: (i) one hundred
twenty-five percent (125%) of the ADP of Non-Highly Compensated
Participants for the previous Plan Year; or (ii) the lesser of two hundred
percent (200%) of the ADP of Non-Highly Compensated Participants for the
previous Plan Year, or such percentage for the Non-Highly Compensated
Participants plus two (2) percentage points.
A Participant's deferral percentage is the ratio of (i) the sum, for
the Plan Year, of the Participant's Deferred Compensation plus any
Employer contributions which are Qualified Matching Contributions (as that
term is defined under the Code) and which are elected by the Employer to
be used in ADP testing divided by (ii) the Participant's
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Compensation for the Plan Year.
If the ADP of the Highly Compensated Participants would exceed the
above stated limits, the Plan Administrator shall take such action or
actions as are permitted under applicable regulations, which may include
reducing the Elective Contributions for the Highly Compensated
Participants to come within the limits as follows:
(i) The Plan Administrator shall return to that Highly Compensated
Participant who has the highest dollar amount of deferrals the
portion of his Deferred Compensation (and income allocable
thereto) which will either enable the Plan to satisfy the ADP
limit stated above or cause such Highly Compensated
Participant's deferrals to equal the deferrals of the Highly
Compensated Participant with the next highest amount of
deferrals.
(ii) The prior process must be repeated until the plan satisfies
the above stated ADP limits.
The amount to be returned to a Highly Compensated Participant should
be returned on or before the 15th day of the third month following the end
of the Plan Year in which the deferral percentage limits were violated
(but in all cases by the end of the Plan Year following the year in which
such limits were violated) and shall include the excess amounts plus the
income allocable to such amounts (through the end of the Plan Year in
which the applicable Elective Contribution was made) as determined by the
Plan Administrator in a manner consistent with regulations promulgated
under Code Section 401(k), which are hereby incorporated by reference. The
amount of excess Deferred Compensation to be distributed hereunder shall
be reduced by any Excess Deferrals previously distributed to the
Participant for the Participant's taxable year ending with or within the
Plan Year in accordance with Section 4.8.
In the event that this Plan satisfies the requirements of Code
Section 401(k), 401(a)(4) or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this Plan, then this
Section 4.9 shall be applied by determining the ADP of employees as if all
such plans were a single plan.
The ADP for any Highly Compensated Participant for the Plan Year and
who is eligible to have ADP Contributions allocated to his or her accounts
under two or more arrangements described in Section 401(k) of the Code,
that are maintained by the Employer, shall be determined as if such
elective deferrals were made under a single arrangement. If a Highly
Compensated Participant participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or deferred
arrangements
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ending with or within the same calendar year shall be treated as a single
arrangement.
For purposes of meeting the ADP tests, the Company or the
Administrator may direct that Elective Contributions made on behalf of any
Highly Compensated Employee(s) be ceased or the rate of such contributions
reduced at any time during a Plan Year.
6. Section 4.10 is hereby amended in its entirety as follows:
4.10 Actual Contribution Percentage Test. Notwithstanding the above, the
average contribution percentage of the Highly Compensated Participants
shall not exceed the greater of:
(ii) 125 percent of the average contribution percentage of the
Non-Highly Compensated Participants for the previous Plan
Year; or
(iii) the lesser of 200 percent of the average contribution
percentage of the Non-Highly Compensated Participants for the
previous Plan Year or such percentage for the Non-Highly
Compensated Participants plus 2 percentage points, or such
lesser amount determined pursuant to Regulations to prevent
the multiple use of this alternative limitation with respect
to any Highly Compensated Participant, as described in
Regulation Section 1.401(m)-2(b), which is incorporated herein
by reference.
A Participant's contribution percentage is the ratio of the sum of
the Matching Contributions not used in ADP calculations pursuant to
Section 4.9 above for the Plan Year ("ACP Contributions") divided by the
Participant's Compensation for the Plan Year.
If the Plan would otherwise exceed the multiple use alternative
limitation, as described above, then the contribution percentage of Highly
Compensated Employees will be reduced (beginning with the Highly
Compensated Employee whose ACP Contribution is the highest), so that the
limit will not be exceeded. The amount of this reduction shall be treated
as an excess ACP Contribution.
If the average contribution percentage of the Highly Compensated
Participants would exceed the above stated limits, the Plan Administrator
shall take such action or actions as are permitted under applicable
regulations, which may include reducing the Matching Contributions for the
Highly Compensated Participants to come within the limits as follows:
(i) The Plan Administrator shall reduce the Matching Contribution
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allocated to the Account of that Highly Compensated
Participant who has the highest ACP Contribution (and income
allocable thereto) which will either enable the Plan to
satisfy the ACP limit stated above or cause such Highly
Compensated Participant's ACP Contribution to equal the ACP
Contribution of the Highly Compensated Participant with the
next highest ACP Contribution.
(ii) The prior process must be repeated until the plan satisfies
the above stated ACP limits.
The amount of Matching Contributions to be forfeited with regard to
a Highly Compensated Participant should be forfeited on or before the 15th
day of the third month following the end of the Plan Year in which the
contribution percentage limits were violated (but in all cases by the end
of the Plan Year following the year in which such limits were violated)
and shall include the excess amounts plus the income allocable to such
amounts (through the end of the Plan Year in which the applicable Matching
Contribution was made) as determined by the Plan Administrator in a manner
consistent with regulations promulgated under Code Section 401(m), which
are hereby incorporated by reference.
In the event that this Plan satisfies the requirements of Code
Section 401(m), 401(a)(4) or 410(b) only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this Plan, then this
Section 4.10 shall be applied by determining the contribution percentage
of employees as if all such plans were a single plan.
The contribution percentage for any Highly Compensated Participant
and who is eligible to have ACP Contributions allocated to his or her
accounts under two or more plans described in section 401(a) of the Code,
or arrangements described in section 401(k) of the Code, that are
maintained by the Employer, shall be determined as if such ACP
Contributions were made under a single arrangement. If a Highly
Compensated Participant participates in two or more cash or deferred
arrangements that have different plan years, all cash or deferred
arrangements ending with or within the same calendar year shall be treated
as a single arrangement.
For purposes of meeting the ACP tests, the Company or the
Administrator may direct that Matching Contributions for any Highly
Compensated Participant be ceased or the rate of such contributions
reduced at any time during a Plan Year.
Forfeitures of excess ACP Contributions shall be applied in the same
manner as Forfeitures under Section 4.6.
7. Section 5.3 is hereby amended by adding the following new subsection (c):
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(c) Any dividends or other distributions on the Company Stock
allocated to a Participant's Account through the Participant's investment
in the Company Stock Fund shall be reinvested in such fund and shall be
credited to the Participant's Account.
8. Section 6.5(b)(i) is hereby amended in its entirety as follows:
(i) One lump sum payment in cash;
9. Section 6.5(f) is hereby amended in its entirety as follows:
(f) Notwithstanding any provision in the Plan to the contrary, all
distributions from the Plan shall be determined and made in accordance
with Code Section 401(a)(9) and the Regulations thereunder, including the
minimum distribution incidental benefit requirements.
10. Section 7.1 is hereby amended in its entirety as follows:
7.1 General Investment Provisions.
(b) The Trustee shall, from time to time, establish funds (which may
include a Company Stock Fund) designated by the Company for the collective
investment and reinvestment of Elective, Matching, Profit Sharing and
Rollover contributions made on behalf of Participants and shall be
responsible for the management of such funds. The Company shall provide
communications to Participants regarding the existence and availability of
such funds.
(c) In accordance with rules established by the Administrator and
applied on a uniform and nondiscriminatory basis, each Participant and
Former Participant who has not received a distribution of his Combined
Account shall have the right to (1) direct the Administrator as to the
investment fund or funds in which Elective, Matching, Profit Sharing and
Rollover Contributions made on his behalf will be invested, (2) change his
or her investment election effective as of the first day of any calendar
quarter or more frequently, if permitted on a uniform basis by the Plan
Administrator, and (3) receive, upon request, a written confirmation of
any such election. To the extent permitted by law, the Trustee, the
Company, the Employees and the Plan Administrator shall not have any
liabilities or obligations of any nature whatsoever with respect to the
investment elections of Participants or Former Participants or transfers
made pursuant to (c) below, including, but not limited to any liabilities
or obligations relating to the prudence or diversification of such
investments.
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(d) In accordance with rules established by the Administrator and
applied on a uniform and nondiscriminatory basis, each Participant or
Former Participant may elect to transfer all or any part of the value of
his Elective Account, Profit Sharing Account, Rollover Account and/or
Matching Account to and among the funds effective as of the first day of
any calendar quarter or more frequently, if permitted on a uniform basis
by the Plan Administrator, and, upon request, may receive a written
confirmation of such election.
(e) If a Participant or Former Participant fails to make a proper
election with regard to investment of his or her Account pursuant to (b)
or (c) above, the Trustee (or other fiduciary named by the Company with
responsibility for investments) shall direct the investment of such assets
in one or more investment funds, Retirement Preservation Fund, or money
market instruments, as such Trustee or investment fiduciary deems
appropriate.
(f) The Trustee may appoint one or more Investment Managers with
respect to all or any portion of the asset of the Plan. Any such
Investment Manager shall have all of the powers, duties and
responsibilities of the Trustee, including voting rights, with respect to
assets, for which it has been appointed Investment Manager and the Trustee
shall not have any liability or responsibility of any nature whatsoever
with respect thereto.
11. Section 7.3(c) is hereby amended in its entirety as follows:
(c) Subject to Section 7.4, to vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of attorney with
or without power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments incidental
thereto; to oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities,
and to delegate discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities, or other
property;
12. A new Section 7.4 is hereby added to the Plan, which shall read as
follows:
7.4 Voting of Company Stock Fund. A Participant may, in accordance with
procedures adopted by the Administrator, instruct the Trustee as to the
voting of the shares of Company Stock credited to his account in the
Company Stock Fund as of the record date for any shareholders' meeting.
Full shares of Company Stock shall be voted by the Trustee in accordance
with such instructions. Fractional shares shall be combined and voted by
the Trustee to the extent possible to reflect the instructions of
Participants credited with such shares. If a Participant does not provide
the Trustee with timely voting instructions, such Participant's shares
will be voted by the Trustee in accordance
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with the terms of the Trust Agreement, or, if such agreement is silent,
then shall be voted by the Trustee in its discretion solely in the
interests of the Participants and their beneficiaries. Before each meeting
of the holders of Company Stock or other occasion permitting the exercise
of voting rights with respect to Company Stock, the Administrator shall
cause the proxy materials which are sent to shareholders of record to be
sent to each Participant who has shares of Company Stock credited to his
Account on or before the record date for the exercise of such rights.
13. A new Section 9.17 shall be added, which shall read as follows:
9.17 USERRA Rights. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code
Section 414(u), to the extent applicable. Loan repayments will be
suspended under this Plan as permitted under Code Section 414(u).
IN WITNESS WHEREOF, this Amendment has been executed this 16 day of
December, 1997.
ROSS ROY COMMUNICATIONS, INC.
By /s/ Rita Lindholm
--------------------------
Its: Chief Financial Officer
------------------------
9
Exhibit 4.2
TRUST AGREEMENT
between
Merrill Lynch Trust Company, as the Trustee
and
Ross Roy Communications, Inc. as the Employer
Trust Agreement entered into as of April 1, 1995 by and between the
above-named employer (the "Employer") and Merrill Lynch Trust Company, a New
Jersey corporation (the "Trustee"), with respect to a trust ("Trust") forming
part of the Ross Roy Communications, Inc. Employees' Savings and Investment Plan
(the "Plan").
The Employer and the Trustee hereby agree as follows:
ARTICLE I
STATUS OF TRUST AND APPOINTMENT
AND ACCEPTANCE OF TRUSTEE
1.01 Status of Trust. The Trust is intended to be a qualified trust under
section 401(a) of the Internal Revenue Code of 1986, as amended from time
to time (the "Code"), and exempt from taxation pursuant to section 501(a)
of the Code.
1.02 Appointment of Trustee. The Employer represents that all necessary action
has been taken for the appointment of Merrill Lynch Trust Company (the
"Trust Company") as trustee of the Trust and that the Trust Agreement
constitutes a legal, valid and binding obligation of the Employer.
1.03 Acceptance of Appointment. The Trustee accepts its appointment as trustee
the Trust.
1.04 Title of Trust. The Trust shall be known as the Ross Roy Communications,
Inc. Employees' Savings and Investment Trust.
1.05 Effectiveness. This Trust Agreement shall not become effective until
executed and delivered by both the Employer and the Trustee.
ARTICLE II
ADMINISTRATIVE AND INVESTMENT FIDUCIARIES
2.01 Named Administrative and Investment Fiduciaries. For purposes of this
Trust Agreement, the term "Named Administrative Fiduciary" refers to the
person named or provided for in the Plan as responsible for the
administration and operation of the Plan, and the term "Named Investment
Fiduciary" refers to the person provided for in the Plan as responsible
for the investment and management of Plan assets to the extent provided
for in this Trust Agreement. The Named Administrative Fiduciary and the
Named Investment Fiduciary may be the same person. If any such person is
not named or provided for in the Plan, or if so named or provided for, is
not then serving, the Employer shall be the Named Administrative Fiduciary
or the Named Investment Fiduciary or both, as the case may be.
2.02 Identification of Named Fiduciaries and Designees. The Named
Administrative Fiduciary and the Named Investment Fiduciary under the Plan
shall each be identified to the Trustee in writing by the Employer, and
specimen signatures of each, or of each member thereof, as appropriate,
shall be provided to the Trustee by the Employer. The Employer shall
promptly give written notice to the Trustee of a change in the identity
either of the Named Administrative Fiduciary or Named Investment
Fiduciary, or any member thereof, as appropriate, and until such notice is
received by the Trustee, the Trustee shall be fully protected in assuming
that the identity of the Named Administrative Fiduciary or Named
Investment Fiduciary, and the members thereof, as appropriate, is
unchanged. Each person authorized in accordance with the Plan to give a
direction to the Trustee on behalf of the Named Administrative Fiduciary
or the Named Investment Fiduciary shall be identified to the Trustee by
written notice from the Employer or the Named Administrative Fiduciary or
the Named Investment Fiduciary, as the case may be, and such notice shall
contain a specimen of the signature. The Trustee shall be entitled to rely
upon each such written notice as evidence of the identity and authority of
the persons appointed until a written cancellation of the appointment, or
the written appointment of a successor, is received by the Trustee from
the Employer, the Named Administrative Fiduciary or the Named Investment
Fiduciary, as the case may be.
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ARTICLE III
RECEIPTS AND TRUST FUND
3.01 Receipt by Trustee. The Trustee shall receive in cash or other assets
acceptable to the Trustee all contributions paid or delivered to it which
are allocable under the Plan and to the Trust and all transfers paid or
delivered under the Plan to the Trust from a predecessor trustee or
another trust (including a trust forming part of another plan qualified
udder section 401(a) of the Code), provided that the Trustee shall not be
obligated to receive any such contribution or transfer unless prior
thereto or coincident therewith, as the Trustee may specify, the Trustee
has received such reconciliation, allocation, investment or other
information concerning, or such direction, contribution or representation
with respect to, the contribution or transfer or the source thereof as the
Trustee may require. The Trustee shall have no duty or authority to (a)
require any contributions or transfers to be made under the Plan or to the
Trustee, (b) compute any amount to be contributed or transferred under the
Plan to the Trustee, or (c) determine whether amounts received by the
Trustee comply with the Plan.
3.02 Trust Fund. For purposes of this Trust Agreement, the "Trust Fund"
consists of all money and other property received by the Trustee pursuant
to Section 3.01 hereof, increased by any income or gains on or increment
in such assets and decreased by any investment loss or expense, benefit or
disbursement paid pursuant to this Trust Agreement. The Trustee shall hold
the Trust Fund, without distinction between principal and income, as a
non-discretionary trustee pursuant to the terms of this Trust Agreement.
All assets of the Trust other than those, if any, held by a second trustee
as provided for in Section 3.03 shall be held in an account governed by
the terms and conditions of the Cash Management Account(TM) Financial
Service for Business Retirement Plans Agreement (the "CMA(TM) Account")
which the Employer, having reviewed and understood the CMA Account Program
Description, hereby directs the Trustee to establish for the Trust with
Merrill Lynch, Pierce, Fenner & Smith Incorporated or such other account
or accounts as the Employer and the Trustee may agree upon from time to
time.
3.03 Second Trust Fund. If the Employer so elects, and the Trust Company
consents, the Employer may appoint a second trustee under the Plan with
respect to assets which the Employer desires to contribute or have
transferred to the Trust Company, as Trustee, but which the Trust Company
does not choose to accept. The appointment of a second trustee shall be
deemed a representation by the Employer that the Plan contains all
appropriate provisions relating to the second trustee. In the event and
upon the effectiveness of the acceptance of the second trustee's
appointment, the Employer shall be deemed to have created two trust funds
under the Plan each governed separately by this Trust Agreement except
that with respect to the second trust, this Trust Agreement shall apply as
if the second trustee were referred to by name in the introductory
paragraph and in Section 1.02 hereof. Each Trustee under such an
arrangement shall, however, discharge its duties and responsibilities
solely with respect to those assets of the Trust delivered into its
possession and, except pursuant to the Employee Retirement Income Security
Act of 1974, as amended from time to time ("ERISA"), shall have no duties,
responsibilities or obligations with respect to property of the other
Trust nor any liability for the acts or omissions of the other Trustee. As
a condition to its consent to the appointment of a second trustee, the
Trust Company shall assure that recordkeeping, distribution and reporting
procedures are established on a coordinated basis between it and the
second trustee as the Trust Company considers necessary or appropriate
with respect to the Trust.
ARTICLE IV
PAYMENTS, ADMINISTRATIVE DIRECTIONS AND EXPENSES
4.01 Payments by Trustee. Payments of money or property from the Trust Fund
shall be made by the Trustee upon direction from the Named Administrative
Fiduciary or its designee. Payments by the Trustee shall be transmitted to
the Named Administrative Fiduciary or its designee for delivery to the
proper payees or to payee addresses supplied by the Named Administrative
Fiduciary or its designee, and the Trustee's obligation to make such
payments shall be satisfied upon such transmittal. The Trustee shall have
no obligation to determine the identity of persons entitled to payments
under the Plan or their addresses.
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4.02 Named Administrative Fiduciary's Directions. Directions from or on behalf
of the Named Administrative Fiduciary or its designee shall be
communicated to the Trustee or the Trustee's designee for the purpose only
in a manner and in accordance with procedures acceptable to the Trustee.
The Trustee's designee shall not, however, be empowered to implement any
such directions except in accordance with procedures acceptable to the
Trustee. The Trustee shall have no liability for following any such
directions or failing to act in the absence of any such directions. The
Trustee shall have no liability for the acts or omissions of any person
making or failing to make any directions under the Plan or this Trust
Agreement nor any duty or obligation to review any such direction, act or
omission.
4.03 Disputed Payments. If a dispute arises over the propriety of the Trustee
making any payment from the Trust Fund, the Trustee may withhold the
payment until the dispute has been resolved by a court of competent
jurisdiction or settled by the parties to the dispute. The Trustee may
consult legal counsel and shall be fully protected in acting upon the
advice of counsel.
4.04 Trustee's Compensation and Expenses. If the Employer so elects on the
Client Authorization Form submitted to the Trust Company with respect to
the Plan (the "Client Authorization Form") or otherwise, the Employer
shall (a) pay the Trustee compensation for its services under this Trust
Agreement in accordance with the Trustee's fee schedule in effect and
applicable at the time such compensation becomes payable, and (b) pay or
reimburse the Trustee for all expenses incurred by the Trustee in
connection with or relating to the performance of its duties under this
Trust Agreement or its status as Trustee, including reasonable attorneys
fees. If the Employer does not so elect, such compensation and expenses
shall be charged against and withdrawn from the Trust Fund as provided
below.
Until paid by the Employer or charged against and withdrawn from the Trust
Fund, as the case may be, the Trustee's compensation and expenses shall be
a lien upon the Trust Fund. The Trustee is authorized to charge the Trust
Fund for and withdraw from the Trust Fund, without direction from the
Named Administrative Fiduciary or any other person, the amount of any such
fees or expenses which the Employer has not elected to pay and the amount
of any such fees or expenses which the Employer has so elected to pay but
which remain unpaid for a period of 60 days after presentation of a
statement for such amount to the Employer. Trust Fund assets shall be
applied to pay such fees and expenses in the following priority by asset
category to the extent thereof held at the time of withdrawal in the Trust
Fund subfund or account to which the fee or expense is allocated: (i)
uninvested cash balances; (ii) shares of any money market fund or funds
held in the Trust Fund; and (iii) any other Trust Fund assets. The Trustee
is authorized to allocate its fees and expenses among these subfunds or
accounts to which the fees or expenses pertain in such manner as the
Trustee deems appropriate under the circumstances unless prior to such
allocation the Employer or the Named Administrative Fiduciary specifies
the manner in which the allocation is to be made. The Trustee is also
authorized but not required to sell any shares or other assets referred to
above to the extent necessary for the purpose.
4.05 Taxes. The Trustee is authorized, with or without direction from the Named
Administrative Fiduciary or any other person, to withdraw from the Trust
Fund and pay any federal, state or local taxes, charges or assessments of
any kind levied or assessed against the Trust or assets thereof. Until
paid, such taxes shall be a lien against the Trust Fund. The Trustee shall
give notice to the Named Administrative Fiduciary of its receipt of a
demand for any such taxes, charges or assessments. The Trustee shall not
be personally liable for any such taxes, charges or assessments.
4.06 Expenses of Administration. Expenses incurred by the Employer, the Named
Administrative Fiduciary, the Named Investment Fiduciary, any Investment
Manager designated pursuant to Section 5.02 or any other persons
designated to act on behalf of the Employer, the Named Administrative
Fiduciary or the Named Investment Fiduciary, including reimbursement for
expenses incurred in the performance of their respective duties, shall be
the obligation of the Employer or other person specified in the Plan. Such
expenses, however, may be paid from the Trust Fund upon the written
direction to the Trustee of the Named Administrative Fiduciary.
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4.07 Restriction on Alienation. Except as provided in Section 4.08 or under
section 401(a)(13) of the Code, the interest of any Plan participant or
beneficiary in the Trust Fund shall not be subject to the claims of such
person's creditors and may not be assigned, sold, transferred, alienated
or encumbered. Any attempt to do so shall be void; and the Trustee shall
disregard any attempt. Trust assets shall not in any manner be liable for
or subject to debts, contracts, liabilities, engagement or torts of any
Plan participant or beneficiary, and benefits shall not be considered an
asset of any such a person in the event of the person's insolvency or
bankruptcy.
4.08 Payment on Court Order. The Trustee is authorized to make any payments
directed by court order in any action in which the Trustee is a party or
pursuant to a "qualified domestic relations order" under section 414(p) of
the Code; provided that the Trustee shall not make such payment if the
Trustee is indemnified and held harmless by the Employer in a manner
satisfactory to the Trustee against all consequences of such failure to
pay. The Trustee is not obligated to defend actions in which the Trustee
is named but shall notify the Employer or Named Administrative Fiduciary
of any such action and may tender defense of the action to the Employer,
the Named Administrative Fiduciary or the participant or beneficiary whose
interest is affected. The Trustee may in its discretion defend any action
in which the Trustee is named and any expenses, including reasonable
attorneys fees, incurred by the Trustee in that connection shall be paid
or reimbursed in accordance with Section 4.04 hereof.
ARTICLE V
INVESTMENTS
5.01 Investment Management. The Named Investment Fiduciary shall manage the
investment of the Trust Fund except insofar as (a) a person (an
"Investment Manager") who meets the requirements of section 3(38) of ERISA
has authority to manage Trust assets as referred to in Section 5.02 hereof
or (b) the Plan provides for participant or beneficiary direction of the
investment of assets allocable under the Plan to the accounts of such
participants and beneficiaries and the Trustee notifies the Employer that
such directions will be acceptable. In the latter situation, a list of the
participants and beneficiaries and such information concerning them as the
Trustee may specify shall be provided by the Employer or the Named
Administrative Fiduciary to the Trustee and/or such person(s) as are
necessary for the implementation of the directions in accordance with the
procedure acceptable to the Trustee. Except as required by ERISA, the
Trustee shall invest the Trust Fund as directed by the Named Investment
Fiduciary, an Investment Manager or a Plan participant or beneficiary, as
the case may be, and the Trustee shall have no discretionary control over,
nor any other discretion regarding, the investment reinvestment of any
asset of the Trust. The Trustee may limit the categories of assets in
which the Trust Fund may be invested.
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust which
are awaiting investment or funds from the sale of Trust assets which are
awaiting reinvestment. Absent receipt by the Trustee of a direction from
the proper person for the investment or reinvestment of such funds or
otherwise prior to the application of funds in implementation of such a
direction, the Trustee shall in accordance with the applicable CMA(TM)
Account procedures cause such funds to be invested in shares of the money
market fund specified by the Employer on the Client Information Form or
such other money market fund acceptable to the Trust Company as the
Employer or Named Investment Fiduciary may in writing to the Trust Company
specify for this purpose from time to time. Any such fund may be
sponsored, managed or distributed by an affiliate of the Trust Company.
The Employer or the Named Investment Fiduciary, as the case may be, hereby
acknowledges that prior to any such specification it has read or will have
read the then current prospectus for the specified fund.
5.02 Investment Managers. Notwithstanding any provision of the Plan to the
contrary, the Employer or the Named Investment Fiduciary may appoint one
or more Investment Managers, who may be an affiliate of the Trust Company,
to direct the Trustee in the investment of all or a specified portion of
the assets of the Trust. Any such Investment Manager shall be directed by
the Employer or the Named Investment Fiduciary, as the case may be, to act
in accordance with the procedures referred to in Section 5.04. The Named
Investment Fiduciary shall notify the Trustee in writing before the
effectiveness of the appointment or removal of any Investment Manager.
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If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon written
instructions from the Employer or the Named Investment Fiduciary,
establish separate funds for control by each such Investment Manager. The
funds shall consist of those Trust assets designated by the Employer or
the Named Investment Fiduciary.
5.03 Direction of Voting and Other Rights. The voting and other rights in
securities or other assets held in the Trust shall be exercised by the
Trustee as directed by the Named Investment Fiduciary or other person who
at the time has the right as referred to in Section 5.01 hereof to direct
the investment or reinvestment of the security or other asset involved,
provided that notwithstanding any provision of the Plan to the contrary,
(a) except as provided in clause (b) of this Section, such voting and
other rights in any such security or other asset selected by the Employer
or the Named Investment Fiduciary shall be exercised by the Named
Investment Fiduciary and (b) such voting and other rights in any "employer
security" with respect to the Plan within the meaning of Section 407(d)(1)
of ERISA which is held in an account under the Plan over which a Plan
participant or beneficiary has control as to specific assets to be held
therein or which is held in an account which consists solely or primarily
of "employer securities" shall be exercised by the participants or
beneficiaries having interests in that account. Notwithstanding any
provision hereof or of the Plan to the contrary, (i) in the event a Plan
participant or beneficiary or an Investment Manager with the right to
direct a voting or other decision with respect to any security or other
asset held in the Trust does not communicate any decision on the matter to
the Trustee or the Trustee's designee by the time prescribed by the
Trustee or the Trustee's designee for that purpose or if the Trustee
notifies the Named Investment Fiduciary either that it does not have
precise information as to the securities or other assets involved
allocated on the applicable record date to the accounts of all
participants and beneficiaries or that time constraints make it unlikely
that participant, beneficiary or Investment Manager direction, as the case
may be, can be received on a timely basis, the decision shall be the
responsibility of the Named Investment Fiduciary and shall be communicated
to the Trustee on a timely basis, and (ii) in the event the Named
Investment Fiduciary with any right under the Plan or hereunder to direct
a voting or other decision with respect to any security or other asset
held in the Trust, including any such right under clause (a) or clause (i)
of this Section, does not communicate any decision on the matter to the
Trustee or the Trustee's designee by the time prescribed by the Trustee
for that purpose, the Trustee may, at the cost of the Employer, retain an
Investment Manager with full discretion to make the decision. Except as
required by ERISA, the Trustee shall (a) follow all directions
above-referred to in this Section and (b) shall have no duty to exercise
voting or other rights relating to any such security or other asset.
5.04 Investment Directions. Directions for the investment or reinvestment of
Trust assets or of a type referred to in Section 5.03 from the Employer,
the Named Investment Fiduciary, an Investment Manager or a Plan
participant or beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to
and implemented by, as the case may be, the Trustee, the Trustee's
designee or, with the Trustee's consent, broker/dealer designated for the
purpose by the Employer or the Named Investment Fiduciary. Communication
of any such direction to such a designee or broker/dealer shall
conclusively be deemed an authorization to the designee or broker/dealer
to implement the direction even though coming from a person other than the
Trustee. The Trustee shall have no liability for its or any other person's
following such directions or failing to act in the absence of any such
directions. The Trustee shall have no liability for the acts or omissions
of any person directing the investment or reinvestment of Trust Fund
assets or making or failing to make any direction referred to in Section
5.03. Neither shall the Trustee have any duty or obligation to review any
such investment or other direction, act or omission or, except upon
receipt of a proper direction, to invest or otherwise manage any asset of
the Trust which is subject to the control of any such person or to
exercise any voting or other right referred to in Section 5.03.
5.05 Communication of Proxy and Other Materials. The Employer or Named
Administrative Fiduciary shall establish a procedure acceptable to the
Trustee for the timely dissemination to each person entitled to direct the
Trustee or its designee as to a voting or other decision called for
thereby or referred to therein of all proxy and other materials bearing on
the decision.
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5.06 Common and Collective Trust Funds. Any person authorized to direct the
investment of Trust assets may, if the Trustee and the Named Investment
Fiduciary so permit, direct the Trustee to invest such assets in a common
or collective trust maintained by the Trustee for the investment of assets
of qualified trusts under section 401(a) of the Code, individual
retirement accounts under section 408(a) of the Code and plans or
governmental units described in section 818(a)(6) of the Code. The
documents governing any such common or collective trust fund maintained by
the Trustee, and in which Trust assets have been invested, are hereby
incorporated into this Trust Agreement by reference.
ARTICLE VI
RESPONSIBILITIES AND INDEMNITY
6.01 Relationship of Fiduciaries. Each fiduciary of the Plan and this Trust
shall be solely responsible for its own acts or omissions. The Trustee
shall have no duty to question any other Plan fiduciary's performance of
fiduciary duties allocated to such other fiduciary pursuant to the Plan.
The Trustee shall not be responsible for the breach of responsibility by
any other Plan fiduciary except as provided for in ERISA.
6.02 Benefit of Participants. Each fiduciary shall, within the meaning of the
Code and ERISA, discharge its duties with respect to the Trust solely in
the interest of participants in the Plan and their beneficiaries and for
the exclusive purpose of providing benefits to such participants and
beneficiaries and defraying reasonable expenses of administering the Plan.
6.03 Status of Trustee. The Trustee acknowledges its status as a "fiduciary" of
the Plan within the meaning of ERISA.
6.04 Location of Indicia of Ownership. Except as permitted by ERISA, the
Trustee shall not maintain the indicia of ownership of any assets of the
Trust outside the jurisdiction of the district courts of the United
States.
6.05 Trustee's Reliance. The Trustee shall have no duty to inquire whether
directions by the Employer, the Named Administrative Fiduciary, the Named
Investment Fiduciary or any other person conform to the Plan, and the
Trustee shall be fully protected in relying on any such direction
communicated in accordance with procedures acceptable to the Trustee from
any person who the Trustee reasonably believes is a proper person to give
the direction. The Trustee shall have no liability to any participant, any
beneficiary or any other person for payments made, any failure to make
payments, or any discontinuance of payments, on direction of the Named
Administrative Fiduciary, the Named Investment Fiduciary or any designee
of either of them or for any failure to make payments in the absence of
directions from the Named Administrative Fiduciary or any person
responsible for or purporting to be responsible for directing the
investment of Trust assets. The Trustee shall have no obligation to
request proper directions from any person. The Trustee may request
instructions from the Named Administrative Fiduciary or the Named
Investment Fiduciary and shall have no duty to act or liability for
failure to act if such instructions are not forthcoming. The Trustee shall
have no responsibility to determine whether the Trust Fund is sufficient
to meet the liabilities under the Plan, and shall not be liable for
payments or Plan liabilities in excess of the Trust Fund.
6.06 Indemnification. The Employer hereby indemnifies the Trustee against, and
shall hold the Trustee harmless from, any and all loss, claims, liability,
and expense, including reasonable attorneys fees, imposed upon the Trustee
or incurred by the Trustee as a result of any acts taken, or any failure
to act, in accordance with the directions from the Named Administrative
Fiduciary, Named Investment Fiduciary, Investment Manager or any other
person specified in Article IV or V hereof, or any designee of any such
person, or by reason of the Trustee's good faith execution of its duties
with respect to the Trust, including, but not limited to, its holding of
assets of the Trust as provided for in Section 3.02, the Employer's
obligations in the foregoing regard to be satisfied promptly on request by
the Trustee, provided that in the event that the loss, claim, liability or
expense involved is determined by a no longer appealable final judgment
entered in a lawsuit or proceeding to have resulted from the gross
negligence or willful misconduct of the Trustee, the Trustee shall
promptly thereafter return to the Employer any amount previously received
by the Trustee under this Section with respect to such loss, claim,
liability or expense.
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6.07 Protection of Designees. To the extent that any designee of the Trustee is
performing a function of the Trustee under this Trust Agreement, the
designee shall have the benefit of all of the applicable limitations on
the scope of the Trustee's duties and liabilities, all applicable rights
of indemnification granted hereunder to the Trustee and all other
applicable protections of any nature afforded to the Trustee.
ARTICLE VII
POWERS OF TRUSTEE
7.01 Nondiscretionary Investment Powers. At the direction of the person
authorized to direct such action as referred to in Article V hereof, but
limited to those assets or categories of assets acceptable to the Trustee
as referred to in Section 5.01, the Trustee, or the Trustee's designee or
a broker/dealer as referred to in Section 5.04, is authorized and
empowered:
(a) To invest and reinvest the Trust Fund, together with the income
therefrom, in common stock, preferred stock, convertible preferred
stock, bonds, debentures, convertible debentures and bonds,
mortgages, notes, commercial paper and other evidences of
indebtedness (including those issued by the Trustee), shares of
mutual funds (which funds may be sponsored, managed or offered by an
affiliate of the Trustee), guaranteed investment contracts, bank
investment contracts, other securities, policies of life insurance,
annuity contracts, options, options to buy or sell securities or
other assets, and all other property of any type (personal, real or
mixed, and tangible or intangible);
(b) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a
bank or savings and loan association or other depository
institution, including the Trustee or any of its affiliates,
provided with respect to such deposits with the Trustee or an
affiliate the deposits bear a reasonable interest rate;
(c) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund; to sell, convey, transfer,
exchange, partition, lease for any term, even extending beyond the
duration of this Trust, and otherwise dispose of the same from time
to time;
(d) To have, respecting securities, all the rights, powers and
privileges of an owner, including the power to give proxies, pay
assessments and other sums deemed by the Trustee necessary for the
protection of the Trust Fund; to vote any corporate stock either in
person or by proxy, with or without power of substitution, for any
purpose; to participate in voting trusts, pooling agreements,
foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with
or transfer title to any protective or other committee; to exercise
or sell stock subscriptions or conversion rights; and, regardless of
any limitation elsewhere in this instrument relative to investments
by the Trustee, to accept and retain as an investment any securities
or other property received through the exercise of any of the
foregoing powers;
(e) Subject to Section 5.01 hereof, to hold in cash, without liability
for interest, such portion of the Trust Fund which it is directed to
so hold pending investments, or payment of expenses, or the
distribution of benefits;
(f) To take such actions as may be necessary or desirable to protect the
Trust from loss due to the default on mortgages held in the Trust
including the appointment of agents or trustees in such other
jurisdictions as may seem desirable, to transfer property to such
agents or trustees, to grant to such agents such powers as are
necessary or desirable to protect the Trust Fund, to direct such
agent or trustee, or to delegate such power to direct, and to remove
such agent or trustee;
(g) To settle, compromise or abandon all claims and demands in favor of
or against the Trust Fund;
(h) To invest in any common or collective trust fund of the type
referred to in Section 5.06 hereof maintained by the Trustee;
(i) To exercise all of the further rights, powers, options and
privileges granted, provided for, or vested in trustees generally
under the laws of the State of New Jersey, so that the powers
conferred upon the Trustee herein shall not be in limitation of any
authority conferred by law, but shall be in addition thereto;
(j) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any trust
assets as security, subject to applicable requirements of the Code
and ERISA; and
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(k) To maintain accounts at, execute transactions through, and lend on
an adequately secured basis stocks, bonds or other securities to,
any brokerage or other firm, including any firm which is an
affiliate of the Trustee.
7.02 Additional Powers of Trustee. To the extent necessary or which it deems
appropriate to implement its powers under Section 7.01 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust
Fund, the Trustee shall have the following additional powers and
authority:
(a) to register securities, or any other property, in its name or in the
name of any nominee, including the name of any affiliate or the
nominee name designated by any affiliate, with or without indication
of the capacity in which property shall be held, or to hold
securities in bearer form and to deposit any securities or other
property in a depository or clearing corporation;
(b) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel
and accountants as the Trustee considers necessary or appropriate,
any of whom may be an affiliate of the Trustee or a person who
renders services to such an affiliate, and, as a part of its
expenses under this Trust Agreement and to the extent permissible
under ERISA, to pay their reasonable expenses and compensation;
(c) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in
writing necessary or appropriate for the accomplishment of any of
the powers listed in this Trust Agreement; and
(d) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
ARTICLE VIII
RECORDS, ACCOUNTINGS AND VALUATIONS
8.01 Records. The Trustee shall maintain or cause to be maintained accurate
records and accounts of all Trust transactions and assets. The records and
accounts shall be available at reasonable times during normal business
hours for inspection or audit by the Named Administrative Fiduciary and
the Named Investment Fiduciary or any person designated for the purpose by
either of them.
8.02 Accountings. Within 90 days following the close of each fiscal year of the
Plan or the effective date of the removal or resignation of the Trustee,
the Trustee shall file with the Named Administrative Fiduciary a written
accounting setting forth all transactions since the end of the period
covered by the last previous accounting. The accounting shall include a
listing of the assets of the Trust showing the value of such assets at the
close of the period covered by the accounting. On direction of the Named
Administrative Fiduciary, and if previously agreed to by the Trustee, the
Trustee shall submit to the Named Administrative Fiduciary interim
valuations, reports or other information pertaining to the Trust.
The Named Administrative Fiduciary may approve the accounting by written
approval delivered to the Trustee or by failure to deliver written
objections to the Trustee within 60 days after receipt of the accounting.
Any such approval shall be binding on the Employer, the Named
Administrative Fiduciary, the Named Investment Fiduciary and, to the
extent permitted by ERISA, all other persons.
8.03 Valuation. The assets of the Trust shall be valued as of each valuation
date under the Plan at fair market value as determined by the Trustee
based upon such sources of information as it may deem reliable, including,
but not limited to, stock market quotations, statistical evaluation
services, newspapers of general circulation, financial publications,
advice from investment counselors or brokerage firms, or any combination
of sources. The reasonable costs incurred in establishing values of the
Trust Fund shall be a charge against the Trust Fund, unless paid by the
Employer.
When the Trustee is unable to arrive at a value based upon information
from independent sources, it may rely upon information from the Employer,
Named Administrative Fiduciary, Named Investment Fiduciary, appraisers, or
other sources, and shall not incur any liability for inaccurate valuation
based in good faith upon such information.
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ARTICLE IX
RESIGNATION AND REMOVAL OF TRUSTEE
9.01 Resignation. The Trustee may resign at any time upon at least 30 days
written notice to the Employer.
9.02 Removal. The Employer may remove the Trustee upon at least 30 days written
notice to the Trustee.
9.03 Appointment of a Successor. Upon resignation or removal of the Trustee,
the Employer shall appoint a successor trustee. Upon failure of the
Employer to appoint, or the failure of the effectiveness of the
appointment by the Employer of, a successor trustee by the effective date
of the resignation or removal, the Trustee may apply to any court of
competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of
the appointment of the successor trustee, the Trustee shall deliver to the
successor trustee such records as may be reasonably requested to enable
the successor trustee to properly administer the Trust Fund and all
property of the Trust after deducting therefrom such amounts as the
Trustee deems necessary to provide for expenses, taxes, compensation or
other amounts due to or by the Trustee pursuant to Sections 4.04 or 5.03
hereof not paid by the Employer prior to the delivery.
9.04 Settlement of Account. Upon resignation or removal of the Trustee, the
Trustee shall have the right to a settlement of its account, which
settlement shall be made, at the Trustee's option, either by an agreement
of settlement between the Trustee and the Employer or by a judicial
settlement in an action instituted by the Trustee. The Employer shall bear
the cost of any such judicial settlement, including reasonable attorneys
fees.
9.05 Expenses and Compensation. The Trustee shall not be obligated to transfer
Trust assets until the Trustee is provided assurance by the Employer
satisfactory to the Trustee that all fees and expenses reasonably
anticipated will be paid.
9.06 Termination of Responsibility and Liability. Upon settlement of the
account and transfer of the Trust Fund to the successor trustee, all
rights and privileges under this Trust Agreement shall vest in the
successor trustee and all responsibility and liability of the Trustee with
respect to the Trust and assets thereof shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the
Trustee execute all necessary documents to transfer the Trust assets to
the successor trustee.
ARTICLE X
AMENDMENT AND TERMINATION
10.01 Amendment. The Employer reserves the right to amend this Trust Agreement,
provided that no amendment of this Trust Agreement or the Plan shall be
effective which would (a) cause any assets of the Trust Fund to be used
for, or diverted to, purposes other than the exclusive benefit of Plan
participants or their beneficiaries other than an amendment permissible
under the Code and ERISA, or (b) affect the rights, duties,
responsibilities, obligations or liabilities of the Trustee without the
Trustee's written consent. The Employer shall amend this Trust Agreement
as requested by the Trustee to reflect changes in law which counsel for
the Trustee advises the Trustee require such changes. Amendments to the
Trust Agreement or a certified copy of the amendments shall be delivered
to the Trustee promptly after adoption, and if practicable under the
circumstances, any proposed amendment under consideration by the Employer
shall be communicated to the Trustee to permit the Trustee to review and
comment thereon in due course before the Employer acts on the proposed
amendment.
10.02 Termination. The Trust may be terminated by the Employer upon at least 60
days written notice to the Trustee. Upon such termination, and subject to
Section 11.01 hereof, the Trust Fund shall be distributed as directed by
the Named Administrative Fiduciary.
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ARTICLE XI
MISCELLANEOUS
11.01 Exclusive Benefit Rule. Except as provided in Section 11.02, or as
otherwise permitted as required by ERISA or the Code, no asset of this
Trust shall be used for, or diverted to, purposes other than the exclusive
benefit of Plan participants or their beneficiaries or for the reasonable
expenses of administering the Plan and Trust until all liabilities for
benefits due Plan participants or their beneficiaries have been satisfied.
11.02 Refunds to Employer. The Trustee shall, upon the written direction of the
Named Administrative Fiduciary which shall include a certification that
such action is proper under the Plan, ERISA and the Code specifying any
relevant sections thereof, return to the Employer any amount referred to
in section 403(c)(2) of ERISA.
11.03 Authorized Action. Any action to be taken under this Trust Agreement by an
Employer or other person which is: (a) a corporation shall be taken by the
board of directors of the corporation or any person or persons duly
empowered by the board of directors to take the action involved, (b) a
partnership shall be taken by an authorized general partner of the
partnership, and (c) a sole proprietorship by the sole proprietor.
11.04 Text of Plan. The Employer represents that prior to the execution of this
Trust Agreement by both parties it delivered to the Trustee the text of
the Plan as in effect as of the date of this Trust Agreement. The Employer
shall deliver to the Trustee promptly after adoption thereof a certified
copy of each other amendment of the Plan.
11.05 Conflict with Plan. The rights, duties, responsibilities, obligations and
liabilities of the Trustee are as set forth in this Trust Agreement, and
no provision of the Plan or any other document shall be deemed to affect
such rights, duties, responsibilities, obligations and liabilities. If
there is a conflict between provisions of the Plan and this Trust
Agreement with respect to any subject involving the Trustee, including but
not limited to the responsibility, authority or powers of the Trustee, the
provisions of this Trust Agreement shall be controlling.
11.06 Failure to Maintain Qualification. If the Trust fails to qualify as a
qualified trust under section 401(a) of the Code, or loses its status as
such a qualified trust, the Employer shall immediately so notify the
Trustee, and the Trustee shall, without further notice or direction,
remove the Trust assets from any common or collective trust fund
maintained by the Trustee for investments by qualified trusts.
11.07 Governing Law and Constructions. This Trust Agreement and the Trust shall
be construed, administered and governed under ERISA and other pertinent
federal law, and to the extent that federal law is inapplicable, under the
laws of the State of New Jersey. If any provision of this Trust Agreement
is susceptible to more than one interpretation, the interpretation to be
given is that which is consistent with the Trust being a qualified trust
under section 401(a) of the Code. If any provision of this Trust Agreement
is held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions shall continue to be fully
effective to the extent possible under the circumstances.
11.08 Arbitration.
o Arbitration is final and binding on the parties.
o The parties are waiving their right to seek remedies in court,
including the right to jury trial.
o Pre-arbitration discovery is generally more limited than and
different from court proceedings.
o The arbitrators' award is not required to include factual
findings or legal reasoning and any party's right to appeal or
to seek modification of rulings by the arbitrators is strictly
limited.
o The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities
industry.
The Employer agrees that all controversies which may arise between the
Employer and either or both the Trustee and its affiliate Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S") in connection with the
trust, including, but not limited to, those involving conduct of the CMA
Account, and any transactions therein, or the construction, performance,
or breach of this or any other agreement between the Employer and either
or both the Trustee and MLPF&S, whether entered into prior, on, or
subsequent to the date thereof, shall be determined by arbitration. Any
arbitration under this agreement shall be conducted only before the New
York Stock Exchange, Inc., The American Stock Exchange, Inc., or
arbitration facility provided by any other
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exchange of which MLPF&S is a member. The National Association of
Securities Dealers, Inc., or the Municipal Securities Rulemaking Board,
and in accordance with its arbitration rules then in force. The Employer
may elect in the first instance whether arbitration shall be conducted
before The New York Stock Exchange, Inc., The American Stock Exchange,
Inc., other exchange of which MLPF&S is a member, The National Association
of Securities Dealers, Inc., or The Municipal Securities Rulemaking Board,
but if the employer fails to make such election, by registered letter or
telegram addressed to Merrill Lynch Trust Company, Employee Benefit Trust
Operations, P.O. Box 30532, New Brunswick, New Jersey 08989-0532, before
the expiration of five days after receipt of a written request from MLPF&S
and/or the Trustee to make such election, then MLPF&S and/or the Trustee
may make such election. Judgment upon the award or arbitrators may be
entered in any court, state or federal, having jurisdiction.
11.09 Successors and Assigns. This Trust Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.
11.10 Gender. As used in this Trust Agreement, the masculine gender shall
include the feminine and the neuter genders and the singular shall include
the plural and the plural the singular as the context requires.
11.11 Headings. Headings and subheadings in this Trust Agreement are for
convenience of reference only and are not to be considered in the
construction of the provisions of the Trust Agreement.
11.12 Counterparts. This Trust Agreement may be executed in several
counterparts, each of which shall be deemed an original, and these
counterparts shall constitute one and the same instrument which may be
sufficiently evidenced by any one counterpart.
IN WITNESS WHEREOF, the Employer and the Trustee have executed this
Trust Agreement each by action of a duly authorized person.
By signing this Agreement, the undersigned Employer acknowledges (1)
that, in accordance with paragraph 11.08 on page 10 of this Agreement, the
Employer is agreeing in advance to arbitration any controversies which may arise
with either or both Merrill Lynch Trust Company or Merrill Lynch, Pierce, Fenner
& Smith Incorporated, and (2) receipt of a copy of this Agreement.
ROSS ROY COMMUNICATIONS, INC.
-----------------------------
(Employer)
By: /s/ Rita Lindholm
-------------------------
Name: Rita Lindholm
-----------------------
Title: Sr VP
----------------------
MERRILL LYNCH TRUST COMPANY, TRUSTEE
By: /s/ Chris Rosin
-------------------------
Name: Chris Rosin
-----------------------
Title: Vice President
----------------------
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FIRST ADDENDUM TO TRUST AGREEMENT BETWEEN
MERRILL LYNCH TRUST COMPANY AND
ROSS ROY COMMUNICATIONS, INC.
AMENDMENT to the Trust Agreement entered into as of April 1, 1995 by and
between Merrill Lynch Trust Company (the "Trustee") and Ross Roy Communications,
Inc. (the "Employer"), with respect to the Trust under the Ross Roy
Communications, Inc. Employees' Savings and Investment Plan (the "Agreement").
WHEREAS, the Trustee and the Employer wish to amend the Agreement as
hereinafter set forth:
NOW, THEREFORE, the Trustee and the Employer agree that the Agreement
shall be amended as follows:
1. The third sentence of Section 6.05 of the Agreement is amended in its
entirety to provide as follows:
"The Trustee shall have no obligation to request proper directions from
any person; provided, however, that in the event the Trustee receives
directions from the Employer, the Named Administrative Fiduciary, the
Named Investment Fiduciary, or any designee thereof, which directions are
not communicated in accordance with procedures acceptable to the Trustee,
the Trustee shall notify the Employer or other person from whom such
directions originated that the directions were not communicated in
accordance with such procedures."
2. Section 6.06 of the Agreement is amended in its entirety to provide as
follows:
"6.06 Indemnification. The Employer hereby indemnifies the Trustee
against, and shall hold the Trustee harmless from, any and all loss,
claims, liability, and expense, including reasonable attorneys' fees,
imposed upon the Trustee or incurred by the Trustee as a result of any
acts taken, or any failure to act, in accordance with the directions from
the Named Administrative Fiduciary, Named Investment Fiduciary, Investment
Manager or any other person specified in Article IV or V hereof, or any
designee of any such person, or by reason of the Trustee's good faith
execution of its duties with respect to the Trust, including, but not
limited to, its holding of assets of the Trustee as provided for in
Section 3.02, the
<PAGE>
Employer's obligations in the foregoing regard to be satisfied promptly on
request by the Trustee, provided that in the event that the loss, claim,
liability or expenses involved is determined by a court of competent
jurisdiction to have resulted from the negligence or willful misconduct of
the Trustee, the Employer shall have no indemnification obligation
hereunder and the Trustee shall promptly thereafter return to the Employer
any amount previously received by the Trustee under this Section 6.06 with
respect to such loss, claim, liability or expense."
3. Article VIII of the Agreement is amended to add the following new
Section 8.04 at the end thereof:
"8.04 Loans. In the event that participant loans are available under the
Plan, the Trustee shall reflect one aggregate balance for participant
loans under the Plan and shall reflect changes thereto only as directed by
the Employer or Named Administrative Fiduciary. The Trustee has no
responsibility with respect to maintenance of promissory notes or
monitoring of loan amortization schedules."
4. The last sentence of Section 9.04 of the Agreement is amended in its
entirety to provide as follows: "Either party may request judicial determination
of which party shall bear the cost of any such judicial settlement, including
reasonable attorneys fees; provided, however, that if no such judicial
determination is requested or made, the Employer shall bear such cost."
This Amendment shall be effective as of the effective date of the
Agreement.
Except as provided herein, the Agreement shall remain in full force and
effect as specifically amended hereby.
2
<PAGE>
IN WITNESS WHEREOF, the Trustee and the Employer have caused this
Amendment to be executed on the date(s) set forth below.
MERRILL LYNCH TRUST COMPANY ROSS ROY COMMUNICATIONS, INC.
By: /s/ Chris Rosin By: /s/ Rita Lindholm
----------------------------------- ---------------------------
Name/Title: Chris Rosin, Vice President Name/Title: Rita Lindholm Sr VP
--------------------------- -------------------
Date: 4/7/95 Date: February
--------------------------------- -------------------------
3
Exhibit 5
DEWEY BALLANTINE LLP
1301 AVENUE OF THE AMERICAS
NEW YORK 10019-6092
TEL 212 259-8000 FAX 212 259-6333
March 19, 1999
Omnicom Group Inc.
437 Madison Avenue
New York, New York 10022
Re: Registration Statement on Form S-8 Filed with the Securities
and Exchange Commission on March 19, 1999
Gentlemen:
We are acting as counsel for Omnicom Group Inc., a New York
corporation ("Omnicom"), in connection with the registration by Omnicom under
the Securities Act of 1933, as amended (the "Act"), of 500,000 shares of common
stock, par value $.50 per share (the "Shares"), to be offered pursuant to the
Ross Roy Communications, Inc. Employee Savings and Investment Plan and Trust
(the "Plan") under the Registration Statement on Form S-8 filed with the
Securities and Exchange Commission on March 19, 1999 (the "Registration
Statement").
We are familiar with the proceedings of Omnicom relating to the
authorization and issuance of the Shares. In addition, we have made such further
examinations of law and fact as we have deemed appropriate in connection with
the opinion hereinafter set forth. We express no opinion as to the law of any
jurisdiction other than the laws of the State of New York.
Based upon the foregoing, we are of the opinion that the Shares
offered pursuant to the Plan have been duly authorized and, when issued in
accordance with the resolutions of the Board of Directors of Omnicom authorizing
such issuance, will be validly issued, fully paid and nonassessable.
<PAGE>
Omnicom Group Inc.
March 19, 1999
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act, or under the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Dewey Ballantine LLP
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 18, 1998
(except for Note 14 as to which the date is March 24, 1998) included in Omnicom
Group Inc.'s Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
New York, New York
March 17, 1999
