As filed with the Securities and Exchange Commission on June 13, 1996
Registration No. 33-________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Eagle Food Centers, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-3548019
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
Rt. 67 & Knoxville Rd., Milan, IL 61264
(Address of Principal Executive Offices) (Zip Code)
Eagle Food Centers, Inc. 401(k) Plan
(Full title of the plan)
Herbert T. Dotterer, Rt. 67 & Knoxville Rd., Milan, IL 61264
(Name and address of agent for service
(309) 787-7730
(Telephone number, including area code, of agent for service)
Copy to:
David B. VanSickel, 666 Walnut, Suite 2500, Des Moines, Iowa 50309
(Name and address)
(515) 288-2500
(Telephone number)
Calculation of Registration Fee
<TABLE>
<CAPTION>
Proposed Proposed Amount of
Title of securities Amount to be maximum offering maximum aggregate registration
to be registered registered price per share offering price fee
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 $4.50 (1) $4,500,000 (1) $1,551.60
$.01 par value shares
per share
</TABLE>
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
(1) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(h) under the Securities Act based on the last
sale price of the Common Stock on June 10, 1996.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in (a) through (c) below are incorporated by
reference in the registration statement; all documents subsequently filed by
the registrant or the Eagle Food Center, Inc. 401(k) Plan (the Plan )
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934, prior to the filing of a post-effective amendment 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 the registration statement and to be part thereof from the date
of filing of such documents.
(a) The registrant's annual report for the fiscal year ended February 3,
1996 filed pursuant to Section 13(a) of the Exchange Act.
(b) The registrant has not filed any other reports pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered
by the registrant documents referred to in (a) above.
(c) The description of common stock contained in the registration
statement filed with the Commission on Form 8-A under Section 12 of the
Exchange Act, on July 14, 1989.
Item 4. Description of Securities.
Refer to response to Item 3(c) above.
Item 5. Interests of Named Experts and Counsel.
None.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
provides that a corporation has the power to indemnify a director, officer,
employee or agent of the corporation and certain other persons serving at
the request of the corporation in related capacities against amounts paid and
expenses incurred in connection with an action or proceeding to which he is
or is threatened to be made a party by reason of such position, if such
person shall have acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
in any criminal proceeding, if such person had no reasonable cause to
believe his conduct was unlawful, provided that, in the case of actions
brought by or in the right of the corporation, no indemnification shall be
made with respect to any matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
adjudicating court determines that such indemnification is proper under the
circumstances. The Company's Certificate of Incorporation provides that
the Company shall indemnify its directors and officers to the fullest extent
permitted by the Delaware General Corporation Law.
The Company's Certificate of Incorporation also provides that no director
shall be liable to the Company or its stockholders for monetary damages for
breach of his fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law or (iv) for any transaction in which the
director derived an improper personal benefit.
The Bylaws of the Company contain provisions to the effect that each
director, officer and employee of the Company shall be indemnified by the
Company against liabilities and expenses in connection with any legal
proceeding to which he may be made a party or with which he may become
involved or threatened by reason of having been an officer, director or
employee of the Company or of any other organization at the request of the
Company. The provisions include indemnification with respect to matters
covered by a settlement. Any such indemnification shall be made only if
the Board determines by a majority vote of a quorum consisting of
disinterested directors (or, if such quorum is not obtainable, or if the Board
of Directors directs, by independent legal counsel or by stockholders), that
indemnification is proper in the circumstances because the person seeking
indemnification has met applicable standards of conduct. It must be
determined that the director, officer or employee acted in good faith with
the reasonable belief that his action was in or not opposed to the best
interest of the Company, and with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was
unlawful.
The Company maintains directors and officers liability insurance
under which the Company s directors and officers are insured against loss
(as defined) as a result of claims brought against them alleging breach of
duty, neglect, error or misstatement while acting in such capacities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.3 Eagle Food Centers, Inc. 401(k) Plan.
23. Consent of Deloitte & Touche, LLP.
The registrant undertakes to submit or has submitted the Plan and any
amendments thereto to the Internal Revenue Service ( IRS ) in a timely
manner and has made or will make all changes required by the IRS in
order to qualify the Plan.
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(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, represents a fundamental change in the
information set forth in the registration statement;
(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 posteffective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
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 the registration statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Milan, and
the State of Illinois, on this 13th day of June, 1996.
Date: June 13, 1996 REGISTRANT:
EAGLE FOOD CENTERS,
INC.
By:
/s/ Robert J. Kelly,
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in
the capacities and on the date indicated.
Date: June 13, 1996
/s/Martin J. Rabinowitz
Chairman of the Board and
Director
Date: June 13, 1996
/s/Robert J. Kelly
President, Chief Executive
Officer and Director
/s/Herbert T. Dotterer
Senior Vice President-Finance
and
Chief Financial and Accounting
Officer, Director and Secretary
/s/Pasquale V. Petitti, Director
/s/Steven M. Friedman, Director
/s/Alain M. Oberrotman, Director
/s/Michael J. Knilans, Director
/s/William J. Snyder, Director
/s/Peter B. Foreman, Director
/s/Marc C. Particelli, Director
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit
plan) have duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Chicago, State of Illinois, on June 13, 1996.
Date: ____________________ PLAN:
EAGLE FOOD CENTERS,
INC. 401(k) PLAN
By: LASALLE NATIONAL
BANK, Trustee
By:_______________________
__________________________
<PAGE>
EXHIBIT INDEX
Exhibit Consecutive
Page Number
4.3 Eagle Food Centers, Inc.401(k) Plan
23. (a) Consent of Deloitte & Touche, LLP
<PAGE>
Exhibit 4.3
EAGLE FOOD CENTERS, INC.
401(k) PLAN
Restated Effective January 1, 1989
Plan Year Ends December 31
Copyright 1994
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
All Rights Reserved.
<PAGE>
EAGLE FOOD CENTERS, INC. 401(k) PLAN
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS, CONSTRUCTION AND
TOP-HEAVY RESTRICTIONS
1.1 Definitions 1-1
1.2 Construction 1-7
1.3 Top-Heavy Restrictions 1-7
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 Eligible Class of Employees 2-1
2.2 Conditions of Eligibility 2-1
2.3 Commencement of Participation 2-1
2.4 Termination of Participation 2-1
2.5 Reemployment 2-2
ARTICLE 3
CONTRIBUTIONS AND ALLOCATIONS
3.1 Contribution and Allocation Restrictions 3-1
3.2 Elective Contributions 3-1
3.3 Base Contributions 3-3
3.4 Allocation of Forfeitures 3-4
3.5 Top-Heavy Contributions 3-5
3.6 Rollovers from Other Employee
Benefit Plans 3-6
3.7 Transfers from Prior Plan 3-6
3.8 Participant After-Tax Contributions 3-6
3.9 Determination of Contributions 3-7
3.10 Time of Payment of Contributions 3-7
3.11 Return of Contributions 3-7
ARTICLE 4
VALUATION
4.1 Allocation of Income to Non-Participant
Directed Subaccounts 4-1
4.2 Valuation and Allocation of Participant Loans 4-1
4.3 Valuation of Participant's Account 4-1
ARTICLE 5
CONTRIBUTION AND ALLOCATION RESTRICTIONS
5.1 Maximum Limits on Allocations 5-1
5.2 Limitations for Defined Benefit and
Defined Contribution Plans Covering the
Same Employee 5-3
5.3 Actual Deferral Percentage Test 5-4
5.4 Highly Compensated Employee 5-6
ARTICLE 6
VESTING
6.1 Vesting 6-1
6.2 Top-Heavy Plans 6-2
6.3 Forfeitures 6-2
6.4 Reinstatement 6-2
ARTICLE 7
DISTRIBUTIONS
7.1 Commencement of Retirement Benefits 7-1
7.2 Method of Payment 7-2
7.3 Death Benefits 7-4
7.4 Required Lifetime Distributions 7-5
7.5 Qualified Domestic Relations Orders 7-6
7.6 Loans 7-7
7.7 Hardship Withdrawals - Elective Contributions 7-8
7.8 Withdrawals On or After Age 59 1/2 7-10
ARTICLE 8
ADMINISTRATION OF THE PLAN
8.1 Appointment of Separate Administrator 8-1
8.2 Powers and Duties 8-1
8.3 Records and Notices 8-3
8.4 Compensation and Expenses 8-3
8.5 Limitation of Authority 8-3
ARTICLE 9
ADMINISTRATION OF THE TRUST
9.1 Appointment of Trustee 9-1
9.2 Authorization for Trust Agreement 9-1
9.3 Participant Direction of Investment
of Account 9-1
9.4 Funding Policy 9-2
ARTICLE 10
CLAIMS PROCEDURE
10.1 Application for Benefits 10-1
10.2 Notice of Denied Claim for Benefits 10-1
10.3 Review of Denied Claim 10-1
ARTICLE 11
AMENDMENT AND TERMINATION
11.1 Amendment or Restatement 11-1
11.2 Termination and Discontinuance of
Contributions 11-1
11.3 Distribution Upon Termination 11-1
11.4 Merger, Consolidation or Transfer of
Assets and Liabilities 11-2
11.5 Distribution Upon Disposition of 11-2
Assets or Subsidiary
11.6 Successor Employer 11-2
ARTICLE 12
GENERAL PROVISIONS
12.1 Limitation on Liability 12-1
12.2 Indemnification 12-1
12.3 Compliance with Employee Retirement
Income Security Act of 1974 12-1
12.4 Nonalienation of Benefits 12-1
12.5 Employment Not Guaranteed by Plan 12-2
12.6 Form of Communication 12-2
12.7 Facility of Payment 12-2
12.8 Location of Participant or Beneficiary
Unknown 12-2
12.9 Service in More Than One Fiduciary
Capacity 12-3
12.10 Offset 12-3
<PAGE>
INTRODUCTION
Effective January 1, 1988, EAGLE FOOD CENTERS, INC.
(the "Company") adopted a profit sharing plan to benefit certain of its
employees by facilitating the accumulation of funds for their retirement.
As adopted, the Plan incorporates a cash or deferred arrangement
permitted by section 401(k) of the Internal Revenue Code.
The Company amended and restated the Plan to comply with
sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as
amended. The restatement of the Plan is effective January 1, 1989,
except for those provisions which explicitly state otherwise. This
introduction and the following Articles, as amended from time to time,
comprise the restated Plan.
This document reflects the provisions of the Reinhart, Boerner,
Van Deuren, Norris & Rieselbach, s.c. Volume Submitter Master
Document. The Master Document has been reviewed in advance by the
Internal Revenue Service (the "IRS"). Use of the Volume Submitter
Master Document results in (1) expedited IRS review of the Company's
plan and (2) lower IRS filing fees. Except for the Company's own
retirement plan purposes, this document is copyrighted and cannot be
reproduced, in whole or in part, without the express prior written
permission of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
ARTICLE 1
Definitions, Construction and Top-Heavy Restrictions
1.1 Definitions.
(a) Account. The record of each Participant's interest
in the Trust Fund, divided into the following subaccounts:
_ Elective Contribution Account
_ Base Contribution Account
_ Rollover Account
_ Prior Plan Account
(b) Administrator. The person or persons designated in
Article 8 who shall control and manage the operation and administration
of the Plan as the named fiduciary.
(c) Break in Service. A computation period during
which a Participant does not complete at least 500 Hours of Service. The
computation periods for measuring breaks in service shall be the same as
for measuring Years of Service.
(d) Code. The Internal Revenue Code of 1986, as
amended from time to time, and as interpreted by applicable regulations
and rulings.
(e) Company. Eagle Food Centers, Inc. the
sponsoring employer and any successor which adopts the Plan. The board
of directors of the Company, or such board members authorized by the
board of directors from time to time, shall act on behalf of the Company
for purposes of the Plan. In addition to the board of directors of the
Company, the Administrator may act on behalf of the Company for
purposes of the Plan.
(f) Compensation.
(1) An employee's wages from the Employer
received while a Participant and during the determination period, which
are required to be reported on the employee's IRS Form W-2 for income
tax withholding purposes (or such other amount as required to be reported
under Code sections 6041(d), 6051(a)(3) and 6052 as referenced in
Treasury regulation 1.415-2(d)(11)(i)).
(2) "Compensation" includes elective contributions
made by the Employer on behalf of the employee that are not includable
in income under a cafeteria plan (pursuant to Code section 125), a Code
section 401(k) arrangement (pursuant to Code section 402(a)(8)), a
simplified employee pension (pursuant to Code section 402(h)) or a tax-
sheltered annuity or account (pursuant to Code section 403(b));
compensation deferred under an eligible deferred compensation plan of a
state or local government or tax-exempt organization within the meaning
of Code section 457(b) and employee contributions under governmental
plans described in Code section 414(h)(2).
(3) For purposes of this subsection 1.1(e), the
"determination period" is a Plan Year.
(4) The annual Compensation of each Participant
taken into account for determining all benefits provided under the Plan for
any year shall not exceed the annual compensation limit pursuant to Code
section 401(a)(17). The annual compensation limit shall be adjusted
annually for increases in the cost of living by the Secretary of the
Treasury or his delegate except that the dollar increase in effect on
January 1 of any calendar year is effective for years beginning in such
calendar year. The Compensation of a Participant who, pursuant to Code
section 414(q), is a 5% owner of the Employer or one of the ten most
highly compensated employees of the Employer shall include the
Compensation of the Participant's family group. A Participant's "family
group" shall be comprised of the Participant's spouse and the Participant's
lineal descendants who have not attained age 19 by the close of the Plan
Year. If the aggregate Compensation of the Participant's family group
exceeds annual compensation limit, as indexed, then the Compensation
considered under the Plan for each member of the family group is reduced
so that the total equals the annual compensation limit, as indexed. With
respect to benefits allocated for Plan Years beginning prior to January 1,
1994, the "annual compensation limit" is $200,000, as indexed. With
respect to benefits allocated for Plan Years beginning on or after January
1, 1994, the "annual compensation limit" is $150,000, as indexed.
(g) Effective Date. January 1, 1988, the date as of
which the Plan first applies to the Company.
(h) Employer. The Company or any other entity
which, consistent with authorization by the Company, has adopted the
Plan and any successor thereto. By its adoption of this Plan, an Employer
shall be deemed to appoint the Company, Administrator and Trustee its
exclusive agents to exercise on its behalf all of the power and authority
conferred by this Plan upon the Employer. The authority of the
Company, Administrator and Trustee to act as such agent shall continue
until this Plan is terminated as to the adopting Employer and the relevant
Trust Fund assets have been distributed by the Trustee.
In no event shall a self-employed individual or
owner-employee (within the meaning of Code section 401(c)) be
considered an "employer" eligible to adopt the provisions of the Plan.
For each Plan Year, the Plan shall deem an
individual an employee of the Employer who employs the individual on
the last day of the Plan Year or the last day during the Plan Year for
which the individual accrues an Hour of Service.
The board of directors of the Employer, or such
board members authorized by the board of directors from time to time,
shall act on behalf of the Employer for purposes of the Plan.
(i) Employment. An individual's employment with the
Employer. In the event an employee is transferred between participating
Employers, such employee shall not be deemed to have terminated his
Employment.
(j) Forfeiture. The portion, if any, of a Participant's
Account which, pursuant to Article 6, the Participant is not entitled to
receive following the earlier of a distribution upon his termination of
Employment or the date he incurs five consecutive one-year Breaks in
Service.
(k) Hour of Service.
(1) Each hour for which an employee is paid, or
entitled to payment, for the performance of service for the Employer;
(2) Each hour for which an employee is paid, or
entitled to payment by the Employer without the performance of service
(regardless of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), lay off, jury
duty, military duty, or leave of absence (pursuant to this paragraph (2), no
more than 501 Hours of Service will be credited for any single continuous
period--whether or not such period occurs in a single Plan Year or other
computation period--and 29 C.F.R. section 2530.200b-2 and 3 shall
govern the determination of an individual's Hours of Service); and
(3) Each hour for which back pay, regardless of
any mitigation of damages, is either awarded or agreed to by the Employer.
The same Hours of Service will not be credited
pursuant to both paragraph (1) or (2), as the case may be, and
paragraph (3).
If the Employer does not maintain records of Hours
of Service with respect to an employee but maintains records and
compensates the employee in relation to other periods of service, that
employee shall accrue the following number of Hours of Service for the
following units of time to which his compensation relates:
Units of Time Hours of Service
day 10 hours
week 45 hours
semi-monthly 95 hours
monthly 190 hours
Solely to avoid a Break in Service, an employee
who is absent from work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise have been credited
to such employee but for such absence. An absence from work for
maternity or paternity reasons means an absence due to (i) the pregnancy
of the employee, (ii) the birth of a child of the employee, (iii) the
placement of a child with the employee for adoption by the employee or
(iv) the caring for such child immediately after birth or placement. The
Plan shall credit Hours of Service pursuant to this paragraph first to the
Plan Year in which the absence begins to the extent necessary to prevent a
Break in Service in that Plan Year, then to the Plan Year following the
Plan Year in which the absence begins. No more than 501 hours will be
credited under this paragraph. If the hours which would have been
credited but for an absence due to maternity or paternity reasons cannot
be determined, the Plan shall credit eight Hours of Service for each day
of the absence. The Plan shall not award Hours of Service pursuant to
this paragraph unless the employee involved provides the Administrator
such information as the Administrator reasonably requires to establish the
purpose of the absence as consistent with this paragraph and to establish
the number of days in the absence.
The Plan shall credit an Hour of Service to the Plan
Year or other computation period to which a payment, agreement or
award relates rather than the year or period in which the payment,
agreement or award occurs. Hours of Service shall be credited for
employment with other members of an affiliated service group (under
Code section 414(m)), a controlled group of corporations (under Code
section 414(b)), a group of trades or businesses under common control
(under Code section 414(c)) of which the Employer is a member, any
other entity required to be aggregated with the Employer pursuant to Code
section 414(o) and as a Leased Employee, except as provided in section
1.1(l).
(l) Income. The net gain or loss of the Trust Fund
from investments including, but not limited to, interest, dividends, rents,
profits, realized and unrealized gains and losses and expenses of the Plan
or Trust Fund paid from the Trust Fund. To determine the Income of the
Trust Fund for any period, the Trustee shall value the Trust Fund on the
basis of its assets' fair market value.
(m) Key Employee. Any employee, former employee
or beneficiary who, pursuant to Code section 416(i), during the year
involved or any of the four immediately preceding years, is:
(1) An officer of the Employer receiving annual
compensation exceeding 50% of $90,000 or the amount then applicable
pursuant to Code section 415(b)(1)(A) (as adjusted annually for increases
in the cost of living by the Secretary of the Treasury or his delegate);
(2) One of the ten employees of the Employer
owning the largest interests in an Employer and receiving annual
compensation greater than $30,000 or the amount then applicable pursuant
to Code section 415(c)(1)(A) (as adjusted annually for increases in the
cost of living by the Secretary of the Treasury or his delegate);
(3) A five percent owner of the Employer; or
(4) A one percent owner of the Employer
receiving annual compensation exceeding $150,000.
In determining whether an individual is a Key
Employee, the Administrator shall consider his compensation as defined in
Code section 414(q)(7).
(n) Leased Employee. Any person (other than an
employee of the Employer) who, pursuant to an agreement between the
Employer and any other person (the "leasing organization"), has
performed services for the Employer (or for the Employer and related
persons determined in accordance with Code section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, if such
services are of the type historically performed by employees in the
business field of the Employer.
In no event shall a Leased Employee be considered
an employee of the Employer if: (1) the Leased Employee is covered by a
money purchase pension plan providing a nonintegrated employer
contribution rate of at least 10% of compensation as defined in section
5.1(c) (including amounts contributed pursuant to a salary reduction
agreement under Code sections 125, 402(a)(8), 402(h) or 403(b)),
immediate participation and full and immediate vesting and (2) the Leased
Employees equal no more than 20% of the Employer's nonhighly
compensated employees.
(o) Lucky Plan. The Lucky Tax Savings Plan.
(p) Normal Retirement Date. A Participant's 65th
birthday.
(q) Participant. Any individual who has satisfied the
eligibility and participation requirements of the Plan as provided in
Article 2. Where appropriate, the term "Participant" also includes former
Participants who are no longer eligible to participate under the provisions
of Article 2, or beneficiaries of a deceased Participant, or an alternate
payee as defined in Code Section 414(p)(8), for whom an Account exists
which has not been distributed or forfeited in total.
(r) Plan. The Eagle Food Centers, Inc. 401(k) Plan,
formerly the Eagle Food Centers, LP. 401(k) Plan, as stated herein and as
amended from time to time.
(s) Plan Year. The period beginning on the Effective
Date and ending on December 31, 1988, and each 12-month period
ending on each subsequent December 31.
(t) Trust Fund. The assets of the Plan held in trust by
a Trustee or the assets of the Plan which consist of insurance contracts or
policies issued by an insurance company.
(u) Trustee. The person, persons or entity holding the
assets of the Plan in trust or, in the case of a Trust Fund consisting solely
of insurance contracts, the insurer. The use of the term Trustee to refer
to the insurer is not intended to indicate that the insurer is a trustee
within the meaning of state or federal statutory or common law, but merely
for convenience of reference in the Plan.
(v) Valuation Date. The last day of the Plan Year and
the last day of each of the third, sixth, ninth and twelfth months of the
Plan Year or such other dates as the Administrator determines for the
purpose of valuing the Trust Fund pursuant to Article 4.
(w) Year of Service. A Plan Year in which an
employee completes at least 1,000 Hours of Service. Prior to the
Effective Date, a Year of Service shall include any fiscal year of the
Company in which an employee accumulates at least 1,000 Hours of
Service.
1.2 Construction. Except to the extent preempted by the
Employee Retirement Income Security Act of 1974, the laws of the State
of Illinois, as amended from time to time, shall govern the construction
and application of the Plan. Words used in the masculine gender shall
include the feminine and words in the singular shall include the plural, as
appropriate. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall refer to the entire Plan, not to
a particular section. Any mention of "Articles," "sections" and
subdivisions thereof, unless stated specifically to the contrary, refers to
Articles, sections or subdivisions thereof in the Plan. All references to
statutory sections shall include the section so identified, as amended from
time to time, or any other statute of similar import. If any provisions of
the Code or the Employee Retirement Income Security Act of 1974 render
any provision of this Plan unenforceable, such provision shall be of no
force and effect only to the minimum extent required by such law.
1.3 Top-Heavy Restrictions. Annually, as of each
determination date, the Administrator shall apply the tests recited in Code
section 416 to determine if the Plan is top-heavy.
(a) General Rule. Generally, the Plan will be "top-
heavy" for any Plan Year, if, as of the determination date, the Plan's
accumulations in the Accounts of Key Employees exceed 60% of its
accumulations in the Accounts of all Participants. To determine if the
Plan is top-heavy, the Administrator shall (1) include in each Participant's
Account distributions made with respect to the Participant during the Plan
Year containing the determination date and the preceding four Plan Years
and (2) exclude from the calculation (A) the Account of any Participant
who has not been a Key Employee at anytime during the Plan Year
containing the determination date and the preceding four Plan Years and
(B) the Account of any individual who did not complete at least one Hour
of Service during the immediately preceding five-year period.
(b) Determination Date. For the first Plan Year, the
"determination date" is the last day of that Plan Year. For any other Plan
Year, the "determination date" is the last day of the immediately
preceding Plan Year.
(c) Aggregating Plans. In determining whether the
Plan is top-heavy, the Administrator shall aggregate the Plan with (1) each
other plan of the Employer in which a Key Employee participated during
the plan year containing the determination date or the four immediately
preceding years (regardless of whether the plan has terminated) and (2)
each other plan of the Employer which enables any plan in which a Key
Employee participates to meet the requirements of Code section 401(a)(4)
or 410. The Administrator may, in making its determination, aggregate
the Plan with one or more other plans of the Employer if such plans, as a
group, would continue to meet the requirements of Code section 401(a)(4)
and 410. In determining whether this Plan is top-heavy, the
Administrator shall consider the present value of accrued benefits and the
sum of account balances under all plans aggregated pursuant to Code
section 416.
(d) Consequences. If the Plan is top-heavy for a year,
the top-heavy contribution and allocation directions of Article 3, if any,
and the top-heavy vesting schedule of Article 6, if any, shall apply.
<PAGE>
ARTICLE 2
Eligibility and Participation
2.1 Eligible Class of Employees. An employee eligible to
participate in the Plan is any employee of an Employer who is not:
_ a member of a collective bargaining unit in relation to
which retirement benefits were a subject of good faith bargaining with the
Employer unless the collective bargaining agreement applicable to the
Employee provides for participation under this Plan.
_ a Leased Employee or
_ a nonresident alien who receives no U.S. source
earned income.
2.2 Conditions of Eligibility. An employee who is eligible
to participate in the Plan, as defined in section 2.1 above, shall participate
in the Plan as of the commencement date described in section 2.3 upon
the completion of an Hour of Service.
2.3 Commencement of Participation. Each employee who
was a member of the Lucky Plan as of December 31, 1987 shall be a
Participant of the Plan as of the Effective Date. Each Eligible Employee
employed by an Employer prior to the Effective Date shall be eligible to
become a Participant of the Plan on the Effective Date. Each other
employee who meets the eligibility requirements of sections 2.1 and 2.2
may commence participation in the Plan on the earlier of the first day of
the Plan Year or the first day of the seventh month in the Plan Year
coincident with or immediately following the date the Participant satisfies
such eligibility requirements.
Effective January 1, 1994, an employee who meets the
eligibility requirements of sections 2.1 and 2.2 may commence
participation in the Plan as of any January 1, April 1, July 1 or October 1
coincident with or immediately following the date the Participant satisfies
such eligibility requirements.
2.4 Termination of Participation. On the date a Participant's
Employment terminates or, if earlier, the date he no longer is a member
of the eligible class of employees pursuant to section 2.1, the Participant
shall be deemed a former Participant. Status as a former Participant shall
continue until the date the Plan has satisfied all liabilities with respect to
the former Participant.
2.5 Reemployment. If a Participant terminates Employment
and subsequently resumes Employment, the rehired employee shall
immediately resume participation in the Plan provided he is employed in
an eligible class of employees.
ARTICLE 3
Contributions and Allocations
3.1 Contribution and Allocation Restrictions. All
contributions and allocations provided for in this Article 3 are subject to
the limitations and restrictions set forth in Article 5.
3.2 Elective Contributions.
(a) Amount. For each Plan Year, a Participant may
direct the Employer to make "elective contributions" on his behalf directly
to the Trust Fund. The Employer shall make elective contributions on
behalf of a Participant in lieu of the Employer's payment of an equal
amount to the Participant as direct remuneration for the Plan Year;
provided the Participant elects to defer such amounts prior to date such
amounts become currently available to the Participant. Such amounts may
be contributed to the Plan only if such amounts would have been received
by the Participant, but for the Participant's election, on or before 2-1/2
months following the end of the Plan Year. A Participant may so elect
only as to amounts becoming currently available after the cash or deferred
arrangement of this Plan is adopted and effective. A Participant's elective
contributions may not exceed the lesser of (1) 15 percent of the
Participant's Compensation for a Plan Year, or (2) for each calendar year,
the $7,000 limit of Code section 402(g) as adjusted annually for increases
in the cost of living by the Secretary of the Treasury or his delegate and
as in effect for such calendar year.
(b) Allocation. As of the last day of each calendar
month and following the allocation of Income pursuant to Article 4, the
Administrator shall allocate the elective contributions for the year to the
Elective Contribution Accounts of the Participants for whom such
contributions were made.
(c) Enrollment. Participants may enroll to make
elective contributions effective as of the first day of any Plan Year or as
of the first day of the seventh month of any Plan Year (or such other date
or dates as the Employer may establish). A Participant shall enroll by
filing with the Administrator a written election (on a form acceptable to
the Administrator) directing the Employer to make elective contributions.
The Participant must file the written election with the Administrator
within a reasonable time as determined by the Administrator prior to the
effective date.
Effective January 1, 1994, Participants may enroll
to make elective contributions effective as of any January 1, April 1, July
1 or October 1 (or such other date or dates as the Employer may
establish). A Participant shall enroll by filing with the Administrator a
written election (on a form acceptable to the Administrator) directing the
Employer to make elective contributions. The Participant must file the
written election with the Administrator within a reasonable time as
determined by the Administrator prior to the effective date.
Once filed, a Participant's written election
authorizing elective contributions will remain in effect until amended or
discontinued pursuant to paragraphs (d) and (e) below.
(d) Discontinue Elective Contributions. Unless
otherwise authorized pursuant to rules prescribed by the Administrator, a
Participant may entirely discontinue his elective contributions effective as
of the first day of any pay period by filing with the Administrator, within
a reasonable time as determined by the Administrator prior to the effective
date, a revised written election directing the Employer to discontinue his
elective contributions. A Participant who discontinues his elective
contributions may not again enroll to make elective contributions until the
following enrollment date. The Participant's subsequent enrollment will
be effective only as of the dates provided and pursuant to the terms
specified in paragraph (c) above. A Participant who suspends elective
contributions because of a hardship withdrawal may again enroll as of the
date the suspension expires.
(e) Increase or Decrease in Elective Contributions.
Unless otherwise authorized pursuant to rules prescribed by the
Administrator, a Participant may increase or decrease the amount of his
elective contributions effective as of any enrollment date provided in
paragraph (c) above by filing a revised written election with the
Administrator within a reasonable time, as determined by the
Administrator, prior to the effective date.
(f) Return of Excess Elective Contributions. If a
Participant notifies the Administrator in writing by the March 1 following
the close of a calendar year, or the Employer designates on behalf of the
Participant by the April 15 with respect only to elective contributions
under the Plan and any other plans of the Employer, that the Participant
has made excess elective contributions for that year, the Administrator
shall distribute to the Participant the amount of the excess elective
contributions allocable to the Plan (plus, or minus, any Income or loss
allocable thereto up to the close of the calendar year) by the April 15
immediately following the close of that calendar year. The amount of
"excess elective contributions" for any calendar year shall equal (1) the
sum of amounts contributed as elective contributions on behalf of the
Participant plus amounts deferred by the Participant pursuant to
arrangements described in Code sections 401(k), 408(k) and 403(b) (the
"total elective contributions") minus (2) the greater of the $7,000 limit of
Code section 402(g), as adjusted annually for increases in the cost of
living by the Secretary of the Treasury or his delegate from time to time,
or $9,500, which alternate limit applies to only elective contributions
added to deferrals made pursuant to an arrangement described in Code
section 403(b). The Participant's written notification must contain a
statement to the effect that, if such excess elective contributions were not
distributed, the Participant's total elective contributions would exceed the
limit specified in Code section 402(g) for the calendar year in which such
elective contributions were made.
Income allocable to excess elective contributions
shall be determined (1) under any reasonable method used for allocating
Income to all Participants' Accounts as applied consistently to all
Participants for the Plan Year or (2) by multiplying Income allocable to
the Participant's Elective Contribution Account for the calendar year by a
fraction, the numerator of which is such Participant's excess elective
contributions for the year and the denominator is the Participant's Account
balance attributable to elective contributions as of the beginning of the
calendar year plus the Participant's elective contributions for the calendar
year.
3.3 Base Contributions.
(a) Amount. The Employer may contribute a "base
contribution" to the Trust Fund for each Plan Year. The amount of the
contribution, if any, for a Plan Year shall equal the amount determined by
the Employer.
(b) Qualifying Participants. Each Participant's Account
may be eligible for an allocation of the base contribution, if any, made to
the Trust Fund for the Plan Year provided the Participant is employed by
the Employer on the last day of the Plan Year.
The Plan refers to Participants whose Accounts are
entitled to an allocation pursuant to this section as "qualifying
Participants."
If as a result of the application of this subsection (b)
the Plan would fail to satisfy Code sections 401(a)(26) and 410(b) for the
Plan Year, the Administrator shall also consider as qualifying Participants
for the Plan Year the individuals described below in the order listed and
only to the extent necessary to satisfy Code sections 401(a)(26)
and 410(b):
(1) If the Plan requires qualifying Participants to
complete 1,000 Hours of Service in a Plan Year, Participants employed
by the Employer on the last day of the Plan Year who failed to complete
1,000 Hours of Service beginning with Participants who completed
999 Hours of Service in the Plan Year and continuing in order of
Participants with the greatest number of Hours of Service down to
501 Hours of Service;
(2) Participants who terminated Employment prior
to the last day of the Plan Year after completing 501 or more Hours of
Service beginning with Participants who completed the greatest number of
Hours of Service in the Plan Year and continuing in order of Participants
with the greatest number of Hours of Service down to 501 Hours of
Service; and
(3) Leased Employees, in order of Leased
Employees who completed the greatest number of Hours of Service
during the Plan Year.
(c) Allocation. As of the last day of each Plan Year,
and following the allocation of Income pursuant to Article 4, the
Administrator shall allocate the base contribution for the year among the
Base Contribution Accounts of qualifying Participants. The amount
allocated on behalf of each qualifying Participant shall bear the same
proportion to the total base contribution for the year as the Participant's
total Compensation for the year bears to the total Compensation of all
qualifying Participants for the year.
(d) Suspension, Reduction or Elimination of Base
Contributions. Notwithstanding any other provisions of the Plan, the
Employer may act to suspend, reduce or eliminate base contributions to be
made by the Employer. The Employer shall communicate any such
action to all Participants for the Plan Year to which the suspension,
reduction or elimination occurs and may rescind such action at any time.
3.4 Allocation of Forfeitures. As of the last day of each
Plan Year and following the allocation of Income pursuant to Article 4,
the Administrator shall allocate Forfeitures, if any, to the Base
Contribution Accounts of qualifying Participants as if such Forfeitures
were additional base contributions.
<PAGE>
3.5 Top-Heavy Contributions.
(a) Required Contribution. For each Plan Year the
Plan is top-heavy within the meaning of section 1.3 above, the Employer
shall contribute to the Trust Fund such amount, if any, necessary for the
allocation specified in paragraph (b) below.
(b) Allocation.
(1) Except as provided in paragraph (2) below and
notwithstanding allocations otherwise specified in this Article 3, as of the
last day of any Plan year during which the Plan is top-heavy, the
Administrator shall allocate a top-heavy contribution to the Elective
Contribution Account of each Participant who is not a Key Employee and
who is employed by the Employer on the last day of such Plan Year
(without regard to the number of Hours of Service he accumulated during
such Plan Year). A "top-heavy contribution" is an Employer contribution
(not including elective contributions) equaling (when combined with
Employer contributions on behalf of such Participant to this and other
defined contribution plans) the lesser of (1) 3% of the Participant's
compensation (as defined in section 5.1(c) below) for such year or (2) the
same percentage of the Participant's compensation for such year as the
highest percentage of a Key Employee's compensation that the allocation
of Employer contributions (including allocations of elective contributions)
to that Key Employee's Account totals for such year.
(2) The provisions in paragraph (1) above shall
not apply to any Participant who is covered under any other qualified
plan(s) of the Employer and the minimum allocation or benefit
requirement applicable to top-heavy plans is met in the other plan(s).
(c) Matching Contributions. If the Plan utilizes
matching contributions to satisfy the required top-heavy contributions,
such matching contributions may not be used to satisfy the
nondiscrimination tests of sections 5.3 and 5.4 and must meet the
nondiscrimination requirements of Code section 401(a)(4) without regard
to Code section 401(m).
(d) Aggregation of Plans. For purposes of this section,
the Plan shall aggregate Employer contributions allocated on behalf of a
Participant pursuant to all defined contribution plans maintained by an
Employer and qualified pursuant to Code section 401(a).
3.6 Rollovers from Other Employee Benefit Plans. Any
employee of the Employer who participated in another retirement plan and
trust qualified pursuant to Code sections 401(a) and 501(a) (a "qualified
plan") may deposit in the Trust Fund any portion of an eligible rollover
distribution paid from another qualified plan a direct rollover or which he
received personally (either directly from such plan or as a rollover from
an individual retirement account or annuity), provided that amounts not
paid in a direct rollover must be deposited in the Plan within 60 days
following his receipt of such amounts and if such amounts consist of
property other than money, the amount deposited consists of the property
distributed. Before accepting such a rollover, the Administrator may
require such documentation and information as it deems necessary. An
employee who rolled over amounts pursuant to this section, or on whose
behalf such a rollover occurred, shall always remain 100% vested in such
rolled over amounts and the Income thereon. Immediately upon receipt,
the Administrator shall allocate amounts rolled over by, or on behalf of, a
Participant to his Rollover Account.
If an individual who rolled over amounts to the Trust
Fund pursuant to this section, or on whose behalf such a rollover
occurred, does not otherwise qualify to become a Participant, he shall,
nonetheless, constitute a Participant only in relation to such rolled over
amounts and the Income thereon.
3.7 Transfers from Prior Plan. The entire amount of the
vested account balance of each employee of the Employer who is a
member of an eligible class of employees pursuant to section 2.1 above
under the Lucky Tax Savings Plan shall be transferred to the Plan
pursuant to this provision. If such a transfer would result in the
elimination of a Code section 411(d)(6) protected benefit, the
Administrator shall require that the Plan satisfy the elective transfer
requirements of Treasury regulation section 1.411(d)-4 Q&A 3. The
Administrator shall allocate such transferred amount to the Participant's
Prior Plan Account, which shall remain 100% vested and subject to any
protected benefit requirements otherwise required by this Plan or
applicable law.
If an individual who transferred amounts to the Trust
Fund pursuant to this section, or on whose behalf such a transfer
occurred, does not otherwise qualify to become a Participant, he shall,
nonetheless, constitute a Participant only in relation to such transferred
amounts and the Income thereon.
3.8 Participant After-Tax Contributions. The Plan neither
requires nor permits Participants to make after-tax contributions to it or
the Trust Fund.
3.9 Determination of Contributions. The Employer shall
determine the amount of any contribution made by it pursuant to this Plan.
The Employer's determination of such contribution shall bind all
Participants, the Trustee and the Administrator. Such determination shall
be final and conclusive and shall not be subject to change as a result of a
subsequent audit by the Internal Revenue Service or as a result of any
subsequent adjustment of the Employer's records.
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 such contribution. The Trustee shall be
accountable for only funds it actually receives.
3.10 Time of Payment of Contributions. The Employer
shall pay its contribution for each of its fiscal years to the Trustee within
the time prescribed by law, including extensions, for the filing of the
Employer's federal income tax return for such year or within such other
period as provided in Code section 404(a)(6). The Employer shall pay
elective contributions made pursuant to a salary reduction agreement to
the Trustee as of the earliest date the Employer can reasonably segregate
such contributions from its general assets but not later than the earlier of
(a) 90 days from the date on which such amounts would otherwise have
been payable to the Participant or (b) the end of the 12-month period
immediately following the Plan Year to which the elective contributions
relate.
3.11 Return of Contributions. The Trustee shall return
Employer contributions made to the Plan in the following circumstances:
(a) The Employer and the Plan hereby condition all
Employer contributions to the Plan upon the Employer obtaining a
deduction pursuant to Code section 404(a) in an equal amount for the
Employer's taxable year ending with or within the Plan Year for which
the contribution is made. If all or any portion of the Employer's
contribution is not deductible for such year pursuant to Code
section 404(a), the Trustee shall return the nondeductible amount to the
Employer, without earnings, but reduced by any losses attributable
thereto, within one year of the disallowance of the deduction by the
Internal Revenue Service.
(b) The Trustee, at the direction of the Employer, shall
return to the Employer, without earnings, but reduced by any losses
attributable thereto, any contribution made due to a mistake of fact
provided the Administrator determines that such mistake existed at the
time of the contribution. The Trustee may only return a contribution
pursuant to this subsection (b) within 12 months of the date the
contribution was made.
(c) The Employer and the Plan condition all Employer
contributions to this Plan upon the initial qualification of the Plan pursuant
to Code section 401(a). Within one year after the date the Internal
Revenue Service determines that the Plan fails to qualify pursuant to Code
section 401(a), and provided that the Plan's application for determination
to the Internal Revenue Service is made within the time prescribed by
law, the Trustee shall return to the Employer the entire assets of the Plan
attributable to all amounts contributed during the time the Plan failed to
qualify.
The Employer shall return elective contributions and
amounts rolled over into the Plan, if any, and Income thereon to the
Participant if such contributions are returned to the Employer pursuant to
this section.
ARTICLE 4
Valuation
4.1 Allocation of Income to Participant Directed Accounts.
The Administrator shall value a Participant's Account as of each
Valuation Date in accordance with the income accounting applicable to
each investment fund in which the assets of the Account are invested and
adjust the Account to reflect applicable expenses and all other transactions
since the preceding Valuation Date.
4.2 Valuation and Allocation of Participant Loans. As of
each Valuation Date, the Administrator shall value separately the principal
outstanding and interest received of Participant loans and shall allocate
such values to the appropriate subaccounts of the borrowing Participants.
4.3 Valuation of Participant's Account. The Administrator
shall determine the value of a Participant's Account for purposes of
Articles 6 and 7 as of the Valuation Date immediately preceding the date
the distribution occurs or commences as if such Valuation Date were the
last day of a Plan Year, including in that valuation (a) the allocation of
contributions or Forfeitures, if any, for such year if the Account otherwise
qualifies for such allocation and the Valuation Date is actually the last day
of a Plan Year or if the Plan otherwise requires allocation of such
amounts as of such Valuation Date, and (b) elective contributions made to
the Plan on behalf of the Participant since the Valuation Date.
If the Administrator determines that valuing the
Participant's Account as of the immediately preceding Valuation Date
would significantly jeopardize the interests of the Plan and its Participants
because, due to subsequent market fluctuations or other developments,
that valuation would inaccurately reflect the value of the Participant's
Account as of the date distribution occurs or commences, the
Administrator may, in its discretion, value the Participant's Account as of
a date closer to the date the distribution occurs or commences.
ARTICLE 5
Contribution and Allocation Restrictions
5.1 Maximum Limits on Allocations. This section 5.1 shall
limit contributions and allocations made pursuant to Article 3.
(a) The annual addition to a Participant's Account for
any limitation year shall not exceed the lesser of:
(1) The greater of $30,000 or 25% of the defined
benefit dollar limitation recited in Code section 415(b)(l)(A) for such year;
or
(2) 25% of the compensation paid or made
available (or properly accrued if elected by the Company, in writing, for
limitation years beginning before January 1, 1992) to the Participant in
such year.
(b) The "annual addition" shall mean the sum allocated
to a Participant's Account for any year of contributions or Forfeitures, if
any, pursuant to this Plan and allocated to his benefit pursuant to all other
defined contribution plans maintained by the Employer for the limitation
year, including employee contributions. Contributions allocated to any
individual accounts which are part of a pension or annuity plan under
Code sections 415(l) and 419A(d)(2) shall be treated as annual additions to
a defined contribution plan. However, section 5.1(a)(2) above shall not
apply to any amounts treated as an annual addition under the preceding
sentence. The annual addition includes elective contributions in excess of
(1) the $7,000 limit of Code section 402(g) (as adjusted annually for
increases in the cost of living as specified by the Secretary of the Treasury
or his delegate) that are not distributed by the April 15 following the close
of the Plan Year, or (2) the nondiscrimination tests recited in this
Article 5 even if corrected through distribution after the close of the Plan
Year.
The annual addition shall not include the allocation
to a Participant's Account of Income pursuant to Article 4 and rollovers,
if any, pursuant to Article 3 or the repayment of principal or interest by a
Participant on a loan, if any, extended pursuant to Article 7.
(c) "Compensation" for purposes of this Section 5.1,
unless otherwise elected by the Administrator for a limitation year, shall
mean an employee's wages from the Employer received while a
Participant and during the limitation year which is required to be reported
on the employee's IRS Form W-2 for income tax withholding purposes
(or such other amount as required to be reported under Code
sections 6041(d), 6051(a)(3) and 6052 as referenced in Treasury
regulation 1.415-2(d)(11)(i)).
(d) The "limitation year" shall be the Plan Year.
(e) The Administrator shall reallocate the excess of a
Participant's annual addition over the limits stated above, provided such
excess is not subject to refund or reversion pursuant to Article 3, in
accordance with subparagraph (1) below and any one of the other
following subparagraphs:
(1) To the extent the excess arises from the
Participant's elective contributions, such excess may be refunded to the
Participant as soon as administratively feasible.
(2) The excess amount shall be reallocated to the
Accounts of the Participants in the Plan who have not exceeded the limits
stated above. If the reallocation causes the limits stated above to be
exceeded with respect to each Participant for the limitation year, then
these amounts shall be held unallocated in a suspense account and
reallocated to Participants' Accounts in the next (or succeeding, if
necessary) limitation year before the allocation of Employer or employee
contributions.
(3) The excess amount shall be used to reduce the
Employer contributions for the next (or succeeding, if necessary)
limitation year for the Participant who incurred the excess amounts
provided the Participant is covered by the Plan at the end of such
limitation year. If the Participant is no longer covered by the Plan as of
the end of the limitation year, the excess amounts shall be held
unallocated in a suspense account and reallocated in the next limitation
year to all remaining Participants in the Plan as a reduction of such
Participants' Employer contributions. Excess amounts may not be
distributed to Participants or former Participants.
(4) The excess amount shall be held unallocated in
a suspense account for the limitation year and reallocated in the next (or
succeeding, if necessary) limitation year to all Participants in the Plan.
The excess amount must be used to reduce Employer contributions for the
next (and succeeding, if necessary) limitation years. Excess amounts may
not be distributed to Participants or former Participants.
Any excess amount held in a suspense account shall
not share in Income. If the Plan terminates before the allocation of such
excess, the excess shall revert to the Employer, to the extent that it may
not be allocated to any Participant's Account.
5.2 Limitations for Defined Benefit and Defined
Contribution Plans Covering the Same Employee.
(a) Aggregate Limit. If an employee participates in
both a defined benefit plan and a defined contribution plan maintained by
the Employer, the sum of the defined benefit plan fraction and the defined
contribution plan fraction for each limitation year may not exceed 1.0.
(b) Defined Benefit Plan Fraction. For purposes of this
section, the defined benefit plan fraction for each limitation year shall
include a numerator equaling the projected annual benefit of the employee
pursuant to the plan (determined as of the close of the year) and a
denominator equaling the lesser of (1) 125% of the dollar limitation
imposed upon such benefits by the Code for such year or (2) 140% of his
average annual compensation for the three consecutive Plan Years during
which he both participated in the Plan and received the highest
compensation from the Employer.
(c) Defined Contribution Plan Fraction. For purposes
of this section, the defined contribution plan fraction for each limitation
year shall include a numerator equaling the sum of the annual additions to
the employee's account as of the close of the year and a denominator
equaling the sum of an amount determined for each of such years as the
lesser of (1) 125% of the limit determined pursuant to section 5.1(a)(1) or
(2) 140% of the limit determined pursuant to section 5.1(a)(2).
(d) Super Top-Heavy Limit. In any year during which
the Plan is top-heavy, the Administrator shall apply clause (1) of
paragraphs (b) and (c) above by substituting "100%" for "125%" in
clause (1) of each, if the Accounts of Key Employees exceed 90% of the
total value of Plan assets and the Account of each employee who is not a
Key Employee does not receive a minimum allocation of at least 4% of
compensation pursuant to this Plan (or another defined contribution plan
or this Plan and another defined contribution plan maintained by the
Employer) or a minimum benefit accrual for each such employee of 3%
of compensation has not occurred pursuant to a defined benefit plan (or
plans) maintained by the Employer.
5.3 Actual Deferral Percentage Test.
(a) Applying the Test. The actual deferral percentage
(the "ADP") for Participants who are highly compensated may not exceed
the greater of:
(1) 1.25 times the ADP for all Participants who
are not highly compensated; or
(2) The lesser of (A) 2 times the ADP of
Participants who are not highly compensated or (B) the ADP of
Participants who are not highly compensated plus 2 percentage points.
The Administrator shall determine the Participants'
deferral percentages consistent with Code section 401(k)(3) and applicable
Treasury Regulations, which the Plan incorporates by reference. The
Employer shall maintain records sufficient to demonstrate satisfaction of
the ADP test and the amount of qualified nonelective contributions or
qualified matching contributions, if any, used in such test.
(b) ADP Defined. For each Plan Year, the
Administrator shall determine the "ADP" for the Participants who are
HCEs and all other Participants as follows:
(1) The ADP for a group of Participants shall
equal the average of the ratios, calculated separately for each Participant
in the group, of (A) the allocations of elective contributions and qualified
nonelective contributions or qualified matching contributions (to the extent
not taken into account for purposes of the actual contribution percentage
test), not including Income, which the Administrator determines for a Plan
Year to (B) the Participant's compensation for that Plan Year. The ADP
of a Participant who makes no elective contributions is zero. Excess
elective contributions of non-HCEs, determined pursuant to section 3.1,
are not taken into account for purposes of ADP testing.
(2) "Compensation" for purposes of this paragraph
shall be determined (A) by the Administrator in a manner which satisfies
Code section 414(s), (B) for the Plan Year or the calendar year ending
within the Plan Year, and (C) by limiting the period taken into account to
that portion of the Plan Year or calendar year in which the employee was
a Participant, all as applied uniformly to determine the compensation of
every Participant for that Plan Year.
(3) For purposes of determining the ADP of a
Participant who is a 5% owner pursuant to Code section 414(q) or one of
the top-ten paid HCEs, the compensation, elective contributions (and
qualified nonelective contributions or qualified matching contributions, if
any,) shall include the compensation, elective contributions (and qualified
nonelective contributions and qualified matching contributions, if any,) for
the Plan Year of family members as defined in Code section 414(q)(6).
Family members, with respect to such HCEs, shall be disregarded as
separate employees in determining the ADP both for Participants who are
non-HCEs and for Participants who are HCEs.
(4) The "ADP" for any Participant who is an
HCE and eligible to have elective contributions allocated to his account
pursuant to two or more plans or arrangements described in Code
section 401(k) and maintained by an Employer shall be determined as if
all such contributions were made pursuant to a single arrangement.
(c) Excess Contributions. If, for any Plan Year, the
aggregate amount of contributions to the Accounts of Participants who are
HCEs exceeds the maximum amount permitted in paragraph (a) above,
the Administrator may distribute such excess amount plus or minus any
Income or loss allocable to such excess amount to some or all of the
Participants who are HCEs (determined by reducing contributions made
on behalf of Participants who are HCEs in order of the ADPs beginning
with the highest of such percentages) during the period beginning on the
first day following the close of the Plan Year in which the excess
contributions arose and ending on the date that is 2-1/2 months from the
close of such Plan Year, and in all events shall distribute such Amount no
later than the close of the following Plan Year. In relation to a Participant
who is an HCE for whom the Administrator determines his ADP pursuant
to the family aggregation rules described in subsection (b)(3) above, the
Administrator shall allocate any such excess contributions--plus or minus
any Income or loss--among the family members in proportion to the
elective contributions of each family member combined to determine the
Participant's ADP. The Administrator shall calculate any excess pursuant
to this paragraph (c) after determining the amount of excess elective
contributions pursuant to Article 3.
Income allocable to excess contributions shall be
determined (1) under any reasonable method used for allocating Income to
all Participants' Accounts as applied consistently to all Participants for the
Plan Year or (2) by multiplying Income allocable to the Participant's
elective contributions (and qualified nonelective contributions and qualified
matching contributions, if any) for the Plan Year by a fraction, the
numerator of which equals the Participant's excess contributions for the
year and the denominator of which equals the Participant's Account
balance attributable to elective contributions (and qualified nonelective
contributions and qualified matching contributions, if any) as of the
beginning of the Plan Year plus the Participant's elective contributions
(and qualified nonelective contributions and qualified matching
contributions, if any) for the Plan Year. The Plan may distribute excess
contributions (and Income) without regard to consent otherwise required
for Plan distributions.
5.4 Highly Compensated Employee. For purposes of this
Article 5, highly compensated employee ("HCE") shall have the meaning
required by Code section 414(q) and applicable Treasury Regulations to
the extent such meaning is not inconsistent with the simplified
identification method set forth below. For any Plan Year, an Employer
may determine which employees are HCEs in accordance with either
subparagraph (a) or (b) below.
(a) Plan Year/Look-Back Year Determination.
(1) Active Employees. An active employee is an
HCE, if, during the Plan Year, the employee performs services for the
Employer and, during the look-back year he (A) received compensation
from the Employer exceeding $75,000 (as adjusted annually); (B) received
compensation from the Employer exceeding $50,000 (as adjusted
annually) and was a member of the top-paid group for such year; or
(C) was an officer of the Employer and received compensation during
such year greater than 50 percent of $90,000 or the dollar limitation then
in effect pursuant to Code section 415(b)(1)(A) (as adjusted annually). An
employee is in the top-paid group of employees for a year if such
employee is in the group consisting of the top 20 percent of the employees
when ranked on the basis of compensation paid during such year,
excluding employees who have not completed 6 months of service,
normally work less than 17-1/2 hours per week, normally work not more
than 6 months during any year, have not attained age 21, or are covered
by a collective bargaining agreement between employee representatives
and the Employer. An active employee will also be an HCE if the
employee (A) meets the description in clauses (A) through (C) above upon
substituting "Plan Year" for "look-back year" and is among the
100 employees who received the most compensation from the Employer
during the Plan Year, or (B) is a 5-percent owner at any time during the
look-back year or Plan Year. If no officer satisfies the compensation
requirement of (C) above during either a Plan Year or look-back year, the
highest paid officer for such year shall be an HCE. The applicable annual
compensation limit for purposes of determining the HCEs for a particular
Plan Year or look-back year is the adjusted compensation amount for the
calendar year in which such Plan Year or look-back year began. The
dollar limitations provided above are "adjusted annually" for increases in
the cost of living by the Secretary of the Treasury or his delegate pursuant
to Code section 415(d). "Compensation" for purposes of determining if
an employee is an HCE shall have the meaning of section 5.1(c) above.
(2) Former Employees. Generally, a former
employee is an HCE if that individual is an employee who separated from
service with the Employer (or was deemed to have separated) prior to the
Plan Year, performs no service for an Employer during the Plan Year and
was an active HCE for either the year in which separation occurred or
any determination year ending on or after the individual's 55th birthday.
(b) Simplified Identification Method. Under the
simplified identification method, an Employer's HCEs include HCEs only
as determined pursuant to subparagraph (a)(1) above as applied based on
the Plan Year without reference to the look-back year, or, if elected by
the Employer, as of a single day within the Plan Year (the "Snapshot
Day"). "Compensation," for purposes of simplified identification, is
compensation that reasonably approximates an employee's compensation
within the meaning of section 5.1(c) above. The following exceptions to
subparagraph (a)(1) above apply if an Employer elects to determine HCEs
based on a Snapshot Day:
(1) Compensation. If the Snapshot Day is other
than the last day of the applicable Plan Year, compensation must be
projected for the Plan Year under a reasonable method established by the
Employer.
(2) Includable HCEs. The Employer must treat as
an HCE, in addition to employees who are determined to be HCEs on the
Snapshot Day, any employee who terminated Employment prior to the
Snapshot Day or becomes employed by the Employer subsequent to the
Snapshot Day and (A) was an HCE in the prior Plan Year; (B) was, or is,
a 5-percent owner; (C) has compensation for the Plan Year greater than
or equal to the projected compensation of any employee who is treated as
an HCE on the Snapshot Day (except for employees who are HCE's
solely because they are 5-percent owners or officers); or (D) was, or is,
an officer and has compensation greater than or equal to the projected
compensation of any other officer who is an HCE on the Snapshot Day
solely because that person is an officer.
(3) Determination of Snapshot Day. The Snapshot
Day may be (A) the same Snapshot Day that the Employer is using for
substantiating compliance with nondiscrimination requirements; or (B) any
other single day during the Plan Year, provided the day is reasonably
representative of the Employer's workforce and the Plan's coverage
throughout the Plan Year. A Snapshot Day will not be treated as failing
to be reasonably representative solely because of a significant change in
the Employer's workforce caused by an extraordinary event, such as a
merger or acquisition. The Snapshot Day for the Plan generally must be
consistent from year to year.
(c) Family Members. If, during a Plan Year, an
employee is a family member of either a 5-percent owner or an HCE who
is one of the 10 most highly compensated employees ranked on the basis
of compensation paid by the Employer during such year, the Plan shall
aggregate the allocations of the family member and the 5-percent owner
or HCE. The Plan shall treat the family member and 5-percent owner or
HCE as a single employee receiving compensation and allocations or
benefits equal to the sum of such compensation and allocations or benefits
of the family member and 5-percent owner or HCE. 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. If the Employer does not elect to
determine HCEs under the simplified identification method based on a
Snapshot Day, the first sentence of this paragraph shall also be applied
based on the look-back year.
(d) Look-Back Year. The "look-back year" shall be
the twelve-month period immediately preceding the Plan Year or, if the
Employer so elects, the calendar year ending with or within the applicable
Plan Year provided (1) such election is made with respect to all qualified
plans maintained by the Employer--except for any plan for which the
Employer elects simplified identification of HCEs--and (2) the Plan Year
calculation is made on the basis of the period (if any) by which the
applicable Plan Year extends beyond such calendar year (i.e., the lag
period). If the Employer is making the Plan Year calculation based on
the lag period, the dollar amounts applicable under subsection (a)(1) above
shall be adjusted by multiplying such dollar amounts by a fraction, the
numerator of which is the number of calendar months that are included in
the lag period and the denominator of which is 12.
ARTICLE 6
Vesting
6.1 Vesting.
(a) Retirement. A Participant's interest in his Account
shall be fully vested and nonforfeitable if his Employment terminates on
or after his Normal Retirement Date.
(b) Death or Disability. A Participant's interest in his
Account shall be fully vested and nonforfeitable if his Employment
terminates due to his death or disability. "Disability" means a physical or
mental condition which, in the judgment of the Administrator (based upon
medical reports and other evidence satisfactory to the Administrator) and
pursuant to uniform principles consistently applied, presumably
permanently prevents an individual from satisfactorily performing his
duties for the Employer or the duties of such other position or job which
the Employer makes available to him and for which the individual is
qualified by reason of his training, education or experience.
(c) Termination of Employment Prior to Retirement,
Disability or Death. A Participant's interest in his Elective Contribution
Account shall be fully vested and nonforfeitable at all times. If a
Participant terminates Employment prior to his Normal Retirement
Date, disability or death, his interest in his Base Contribution Account
shall vest, and be nonforfeitable, in relation to his Years of Service as
follows:
Years of ServiceVested Percentage
Fewer than 5 0%
5 or more 100%
(d) Attainment of Normal Retirement Date.
Notwithstanding the above vesting provisions, a Participant's interest in
his Account shall be fully vested and nonforfeitable if the Participant
attains his Normal Retirement Date while employed by the Employer.
(e) Change in Vesting Schedule. In no event shall a
change in the Plan's vesting schedule reduce a Participant's vested and
nonforfeitable interest in his Account. Upon a change in the Plan's
vesting schedule, a Participant who has accumulated at least three Years
of Service may elect to determine the vested interest in his Account
pursuant to either the revised vesting schedule or the vesting schedule
without regard to such change. Such election shall be made during an
election period which shall commence with the date the amendment is
adopted or deemed to be made and shall end 60 days after the latest of the
date the amendment is adopted, become effective, or the date the
Participant is issued written notice of the amendment by the Company or
the Administrator.
6.2 Top-Heavy Plan Years. If the Plan is top-heavy for any
Plan Year, the following vesting schedule shall replace the vesting
schedule of section 6.1:
Years of Service Vested Percentage
Fewer than 3 0%
3 or more 100%
6.3 Forfeitures. The nonvested portion of a Participant's
Account shall constitute a Forfeiture (be "forfeited") as of the earlier of
the date the Participant receives a distribution from his Account following
the termination of his Employment or the date the Participant incurs five
consecutive one-year Breaks in Service. The Administrator shall
reallocate a Forfeiture pursuant to Article 3 as of the end of the Plan Year
in which the Forfeiture occurs.
6.4 Reinstatement.
(a) Five or More Consecutive One-Year Breaks in
Service. If a former Participant resumes participation in the Plan after
experiencing at least five consecutive one-year Breaks in Service, such
Participant shall retain no right to any previously forfeited portion of his
Account. Such employee's Years of Service prior to his Breaks in
Service shall affect the vesting of his Account balance accruing after
reinstatement only if his Account was at least partially vested at the time
he incurred a Break in Service or, upon his reinstatement, the number of
his Years of Service prior to the Break equals or exceeds the number of
his consecutive one-year Breaks in Service. Such Participant's Years of
Service after his Breaks in Service shall be disregarded for the purpose of
vesting his Account balance that accrued prior to such Breaks in Service.
Separate Accounts shall be maintained for the Participant's pre-break
Account balance and post-break Account balance.
(b) Before Five Consecutive One-Year Breaks in
Service. If a former Participant resumes participation in the Plan before
experiencing five consecutive one-year Breaks in Service, the
Administrator shall aggregate the Participant's Years of Service completed
prior to his Break in Service with his Years of Service completed
following his reinstatement to determine his vested interest in both
allocations made to his Account after reinstatement and any portion of his
Account originating prior to such Break in Service. The Administrator
shall restore any previously forfeited portion of such a reinstated
Participant's Account only if the Participant repays to the Plan the full
amount of the distribution. The Participant must repay the full amount of
the distribution prior to the end of the five-year period commencing on the
Participant's date of reinstatement. Any amount so restored shall not
constitute an annual addition pursuant to section 5.1.
(c) Disregarded Years of Service. For purpose of this
section, the Years of Service the Participant completed prior to his Break
in Service shall not include any Years of Service disregarded pursuant to
this subsection by reason of prior Breaks in Service.
ARTICLE 7
Distributions
7.1 Commencement of Retirement Benefits.
(a) Earliest Payment Date. As to any Participant,
distribution shall occur no earlier than the termination of his Employment,
unless specifically authorized elsewhere in the Plan.
(b) Payment Due To Termination of Employment.
(1) Before Normal Retirement Date, Death or
Disability. If a Participant's Employment terminates prior to his Normal
Retirement Date for any reason except his death or disability, the
distribution of his Account shall commence as follows:
(A) Accounts of $3,500 or Less. The
Administrator shall mandate distribution in a single lump sum of any
Participant's vested Account that equals $3,500 or less prior to the
commencement of distributions or at the time of any prior distribution. If
a Participant's vested Account equals zero, the Participant shall be deemed
to have received a mandatory distribution of such vested Account.
Mandatory distributions shall commence as soon as administratively
feasible following termination of a Participant's Employment.
(B) Accounts of More Than $3,500. If a
Participant's vested account balance exceeds $3,500 prior to the
commencement of distributions or at the time of any prior distribution, the
Administrator shall notify the Participant in writing of his right to defer
distribution of his Account to at least his Normal Retirement Date. The
Administrator shall provide such notice not less than 30 days and not
more than 90 days prior to the date a Participant's Account becomes
payable. The Participant may consent, in writing, on a form approved
by, and filed with, the Administrator, to the distribution of his vested
Account as soon as administratively feasible following the date the
Participant elects in writing to commence distribution but no later than the
60th day after the close of the Plan Year (1) in which the Participant
attains his Normal Retirement Date or, if later, (2) in which occurs the
10th anniversary of his commencement of participation in the Plan.
Notwithstanding the above, distribution
may commence less than 30 days after such notice is provided if (1) the
notice clearly informs the Participant that the Participant has a right to a
period of at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution, and (2) the Participant,
after receiving such notice, affirmatively elects a distribution.
Notwithstanding the above, a Participant
may elect to further defer the distribution of his Account to a date no later
than the April 1 following the calendar year in which he attains age 70-
1/2 (or later required beginning date as defined in Article 7.4 below).
(2) On or After Normal Retirement Date, Death
or Disability. The distribution of the Account of a Participant who
terminates Employment on or after the Participant's Normal Retirement
Date and before attainment of age 70-1/2, or due to his death or
disability, shall commence as soon as administratively feasible following
the date the Participant elects in writing to commence distribution but no
later than 60 days after the close of the Plan Year in which the Participant
terminates Employment.
Notwithstanding the above, a Participant may
elect to further defer the distribution of his Account to a date no later than
the April 1 following the calendar year in which he attains age 70-1/2 (or
later required beginning date as defined in Article 7.4 below).
(c) Latest Payment Date. Even if a Participant's
Employment has not terminated, distribution shall commence no later than
the April 1 following the calendar year in which the Participant attains
age 70-1/2 (or later required beginning date as defined in Article 7.4
below).
7.2 Method of Payment.
(a) Form of Benefit. Distribution of a Participant's
Account shall occur in a single lump sum.
(b) Direct Rollovers.
(1) 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 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; provided, however, that if a Participant
elects a direct rollover as to only a portion of the Participant's
distributable Account, the amount to be paid in a direct rollover must
equal at least $500.
(2) 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 payment (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).
(3) 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 individual retirement annuity described in section
403(a) of the Code, or a qualified trust described in section 401(a) of the
Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
(4) 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 relation order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse.
(5) Direct rollover: A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the distributee.
(c) Mandatory Payments. The Administrator shall
direct distribution in a single lump sum of any Participant's vested
Account that does not exceed $3,500 prior to the commencement of
distribution if such Participant fails to direct a rollover within 30 days of
being notified of his right to direct a rollover.
<PAGE>
7.3 Death Benefits.
(a) Distribution to a Beneficiary. The Plan shall
distribute the Account of a deceased Participant to the beneficiary
identified in the beneficiary designation in effect at the time of his death
or, if no such designation exists, to the Participant's to his estate within a
reasonable time after the Participant's death. Each Participant may
designate, in writing, on forms approved by and filed with the
Administrator, one or more beneficiaries to receive payment of his
Account and may, in addition, name a contingent beneficiary.
The beneficiary as to 100% of the Account of a
Participant married at the time of his death shall be his surviving spouse,
unless his spouse consents to the designation of an alternative beneficiary
or the spouse cannot be located. Spousal consent shall be in writing,
acknowledging the effect of such election and witnessed by a Plan
representative or notary public. Any change in, or revocation of, a
Participant's designated beneficiary shall again require spousal consent
unless the earlier consent of the spouse expressly permitted subsequent
designations by the Participant without further spousal consent. The death
benefit shall be made available to the surviving spouse within a reasonable
time after the Participant's death and in no event later than the earliest
date benefits would be payable to the Participant if his Employment
terminated on the date of his death for a reason other than death.
(b) Form of Benefit. A Participant's beneficiary may
request, in writing, on forms approved by, and filed with, the
Administrator, payment in any optional benefit form available under the
Plan.
(c) Death On or Before Required Beginning Date. The
Plan shall distribute as follows the Account of a Participant who dies on
or before his required beginning date:
(1) General. Distribution shall occur by the end
of the calendar year that contains the fifth anniversary of the Participant's
death.
(2) Spouse as Beneficiary. Distribution to the
surviving spouse of the Participant shall occur no later than the
December 31 of the calendar year in which the Participant would have
attained age 70-1/2.
(d) Death After Required Beginning Date. If a
Participant dies on or after the date distributions have commenced
following his required beginning date pursuant to section 7.5, any
remaining portion of his vested Account shall be distributed at least as
rapidly as required by the method of distribution in effect on his date of
death.
7.4 Required Lifetime Distributions. Notwithstanding the
other provisions of this Article 7, the Plan shall distribute each
Participant's entire Account consistent with Code section 401(a)(9) and
applicable Regulations, which the Plan hereby incorporates by reference.
Distribution of a Participant's Account shall commence no later than his
"required beginning date," determined as follows:
(a) General Rule. Unless specifically defined
otherwise below, a Participant's required beginning date is the April 1
following the calendar year in which he attains age 70-1/2. The required
beginning date of a Participant who is not a 5-percent owner who attains
age 70-1/2 during 1988 and whose Employment did not terminate before
January 1, 1989 is April 1, 1990.
(b) Transitional Rules. The required beginning
date of a Participant who attained age 70-1/2 before 1988 is determined in
accordance with (1) or (2) below:
(1) Non-Five Percent Owner. The required
beginning date of a Participant who is not a 5-percent owner is the April 1
following the calendar year in which the later of the termination of his
Employment or attainment of age 70-1/2 occurs.
(2) Five Percent Owner. The required
beginning date of a Participant who is a 5-percent owner during any year
beginning after December 31, 1979 is the April 1 following the later of
(A) the calendar year in which the Participant attains age 70-1/2 or (B) the
earlier of [i] the calendar year with or within which ends the Plan Year
during which the Participant becomes a 5-percent owner or [ii] the
calendar year in which the Participant's Employment terminates.
For purposes of this section, a Participant is a "5-percent
owner," within the meaning of Code section 416(i), if the Participant is a
5-percent owner at any time during the Plan Year ending with or within
the calendar year in which he attains age 66-1/2 or any subsequent Plan
Year. Once distributions for the Plan have begun to a 5-percent owner,
such distributions shall continue, even if the Participant ceases to be a 5-
percent owner in a subsequent year.
(c) Amount Required to be Distributed. The required
distribution paid each calendar year beginning with the first distribution
calendar year shall not equal less than the quotient obtained upon dividing
the Participant's Account by the lesser of (1) the applicable life
expectancy, or (2) if the beneficiary is not the Participant's spouse, the
applicable minimum distribution incidental benefit divisor determined
from the table recited in Q&A-4 of proposed regulation
section 1.401(a)(9)-2. The "applicable life expectancy" is the life
expectancy (or joint and last survivor expectancy) calculated using the
attained age of the Participant (or designated beneficiary) as of the
Participant's (or designated beneficiary's) birthday in the first distribution
calendar year reduced by one in each year thereafter. The Participant
may elect to recalculate his life expectancy and/or that of his spouse,
provided such election is irrevocable and is made prior to the Participant's
required distribution date.
A Participant's Account is determined as of the last
Valuation Date in the calendar year immediately preceding the calendar
year for which a distribution is required, adjusted as follows: Increased
by the amount of any contributions or Forfeitures, if any, allocated to the
Account as of dates in such calendar year after the Valuation Date and
decreased by distributions made in such calendar year after the Valuation
Date.
7.5 Qualified Domestic Relations Orders. Upon receipt of a
domestic relations order issued by a court of competent jurisdiction with
respect to a Participant's interest in the Plan, the Administrator shall
determine whether such domestic relations order constitutes a qualified
domestic relations order (as defined in Code section 414(p)(1), a
"QDRO"). The Administrator shall establish reasonable procedures to
determine the qualified status of a domestic relations order and to
administer distributions mandated by a QDRO.
If the Administrator determines that the domestic
relations order is a QDRO, an alternate payee as defined in Code
section 414(p)(8) may receive distributions in a single lump sum, or direct
rollover if the alternate payee is the Participant's former spouse,
commencing as if the Participant experienced a termination of
Employment as of the date of the order as described in section 7.1.
Distributions made pursuant to this section may occur without regard to
the age or the employment status of the Participant. Except as provided
by this section, a distribution pursuant to a QDRO shall not include any
type of benefit or payment option not otherwise payable by the Plan. If
the Administrator has notice that a QDRO is being or may be sought but
has not received the QDRO, the Administrator shall not, unless requested
in writing by the Participant, delay payment of a benefit to a Participant
which would otherwise be due. If the Administrator has determined that
an order is not a QDRO and all comment and appeal periods have
expired, the Administrator shall not, unless requested in writing by the
Participant, delay payment to a Participant which otherwise would be due
even if the Administrator has notice that the party claiming to be an
alternate payee or the Participant is attempting to correct any deficiencies
in the order.
7.6 Loans. The Plan shall, pursuant to the provisions of this
section and a uniform nondiscriminatory policy applied by the
Administrator, extend loans to Participants secured by the borrowing
Participants' Account.
(a) Eligible Participants. The term "Participant," for
purposes of this section, includes a former Participant who is a party-in-
interest as defined in section 3(14) of the Employee Retirement Income
Security Act of 1974. If the Employer is an S-Corporation within the
meaning of Code section 1361, no individual holding a 5-percent or
greater interest in the outstanding stock of the Employer may borrow
pursuant to this Article 7. No owner-employee or a member of the family
of the owner-employee may borrow pursuant to this Article 7. An
"owner-employee" means an employee who (1) owns the entire interest in
an unincorporated trade or business or (2) in the case of a partnership, a
partner who owns more than 10% of either the capital interest or profits
interest in such partnership.
(b) Loan Privilege. To obtain a loan, a Participant
must apply in writing on forms approved by the Administrator. The
Administrator shall direct the Trustee to extend a loan from the Trust
Fund upon a Participant satisfying the requirements of this section.
Processing the loan application, after receipt of all necessary material
from the Participant, shall extend no more than 45 days. A promissory
note signed by a Participant and secured by no more than 50-percent of
the vested Account balance of the Participant determined at any time
during the term of the loan or, if greater, as of the date of the loan (plus,
possibly, other collateral) must evidence the loan. Loans shall be
available only if needed for one or more purposes that are deemed to be a
hardship as determined pursuant to section 7.7 below.
(c) Amount. The Administrator shall not approve a
loan to a Participant for a principal amount less than $1,000 or for a
principal amount which exceeds the lesser of: (1) $50,000 reduced by the
highest unpaid balance of all the Participant's loans from the Plan, if any,
(principal and accrued interest) during the period beginning on the date
that is one year prior to the day before the loan was made and ending on
the date of the new loan; or (2) 50% of the vested portion of the
Participant's Account reduced by any unpaid balance (principal and
accrued interest) of any Participant loans from the Plan on the date of the
new loan. The limitations recited in this paragraph apply to the aggregate
of all loans from all plans of the Employer or other members of the
controlled group of which the Employer is a member, pursuant to Code
sections 414(b), (c), (m) and (o).
(d) Interest Rate. Interest on the loan shall equal
two-percent (200 basis points) greater than the prime rate in effect at the
time of extending the loan by the Trustee, if a bank or, if not, by the bank
affiliated with the Trustee or, if none, by the Employer's principal bank
as published in the Wall Street Journal as of the first business day of the
month.
(e) Repayment. Repayment of the loan shall occur in
at least substantially level quarterly payments of principal and interest.
The period of repayment for the principal balance
and interest on any loan shall extend for five years from the date of the
loan or, if the loan is made to acquire any dwelling unit which is, or
within a reasonable time is to be, used as the principal residence of the
Participant, 10 years from the date of the loan. A Participant may request
a shorter repayment period provided such request does not, in the
judgment of the Administrator, place an unreasonable administrative
burden upon the Plan, the Administrator or the Trustee.
If any payment on a loan does not occur within
ninety (90) days of its due date, the Administrator may declare such loan
in default. In addition to any legal remedies available, the unpaid amount
of such loan (including interest accrued thereon) will reduce the
Participant's Account at such time as benefits would otherwise become
distributable hereunder. The unpaid amount of any loan (including
interest accrued thereon) shall be deducted from any distribution to the
Participant under the Plan.
A loan shall constitute a Participant directed
subaccount. Only the borrowing Participant's subaccount shall share in
the interest paid on the loan or bear any expense or loss incurred because
of the loan.
7.7 Hardship Withdrawals - Elective Contributions. A
Participant may withdraw up to 80% of his Elective Contributions
Account (excluding earnings) upon appropriate notice to the Administrator
if the withdrawal results from a "hardship." A withdrawal will be
deemed to result from a "hardship" if the distribution:
(a) Is for the purpose of:
(1) The payment of medical expenses described in
Code section 213(d) incurred by the Participant, his spouse or dependents
or necessary for these persons to obtain medical care described in Code
section 213(d);
(2) Costs directly related to the purchase
(excluding mortgage payments) of a principal residence for the
Participant;
(3) The payment of tuition and related educational
fees for the next 12 months of post-secondary education for the
Participant, his spouse or dependents;
(4) The need to prevent the eviction from, or
mortgage foreclosure of, the Participant's principal residence; or
(5) Any other purpose specified by the Internal
Revenue Service as a deemed immediate and heavy financial need.
(b) Satisfies all of the following:
(1) The distribution does not exceed the amount of
the financial need, including any amount necessary to pay taxes or
penalties reasonably anticipated to result from the distribution;
(2) The Participant has obtained all distributions
(other than hardship withdrawals) and all nontaxable loans currently
available pursuant to this Plan or any other plan maintained by the
Employer;
(3) The Participant cannot make elective
contributions pursuant to this Plan or any other qualified or nonqualified
plan of deferred compensation (excluding health or welfare plans)
maintained by the Employer for at least 12 months after receipt of the
withdrawn amount; and
(4) The Participant's elective contributions made
in the calendar year immediately following the calendar year in which the
withdrawal is received do not exceed the $7,000 limit of Code
section 402(g) (as adjusted) in effect for such calendar year, less the
Participant's elective contributions made in the calendar year in which the
withdrawal was received.
In addition to the above requirements, the
Administrator shall obtain a representation from the Participant stating that
the Participant has made a reasonable attempt to secure a loan for the
amount of the financial need from commercial sources and understands
that the amount to be distributed on account of hardship may be subject to
10-percent excise tax for early distribution.
7.8 Withdrawals On or After Age 59-1/2. On or after
attaining age 59-1/2, a Participant may withdraw, not more than once in a
Plan Year, all or any portion of his vested Account upon written notice to
the Administrator.
ARTICLE 8
Administration of the Plan
8.1 Appointment of Separate Administrator. The Company
may appoint a separate Administrator. Any person, including, but not
limited to, employees of the Employer, shall be eligible to serve as
Administrator. Two or more persons may form a committee to serve as
Administrator. Persons serving as Administrator may resign by written
notice to the Company and the Company may appoint or remove such
persons. An Administrator consisting of more than one person shall act
by a majority of its members at the time in office, either by vote at a
meeting or in writing without a meeting. Effective June 15, 1994, the
members of the Committee shall be the Company President, Secretary,
Senior Vice President, Employee Benefits Manager and Vice President of
Labor Relations. A majority of the Committee shall constitute a quorum
and a majority of the quorum shall be necessary for Committee action.
The Administrator may act by unanimous consent in writing without a
meeting. An Administrator consisting of more than one person may
authorize any one or more of its members to execute any document or
documents on behalf of the Administrator, in which event the
Administrator shall notify the Trustee of the member or members so
designated. The Trustee shall accept and rely upon any document
executed by such member or members as representing action by the
Administrator until the Administrator shall file with the Trustee a written
revocation of such designation. No person serving as Administrator shall
vote or decide upon any matter relating solely to himself or solely to any
of his rights or benefits pursuant to the Plan. If the Company fails to
name such person or persons, the Company shall be the Administrator.
8.2 Powers and Duties. The Administrator shall administer
the Plan in accordance with its terms and shall discharge its duties with
the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character
and with like aims. The Administrator shall have full and complete
authority and control with respect to Plan operations and administration
unless the Administrator allocates and delegates such authority or control
pursuant to the procedures stated in subsection (b) or (c) below. Any
decisions of the Administrator or its delegate shall be final and binding
upon all persons dealing with the Plan or claiming any benefit under the
Plan. The Administrator shall have all powers which are necessary to
manage and control Plan operations and administration including, but not
limited to, the following:
(a) To employ such accountants, counsel or other
persons as it deems necessary or desirable in connection with Plan
administration. The Trust Fund shall bear the costs of such services and
other administrative expenses, unless paid by the Company or Employer.
(b) To designate in writing persons other than the
Administrator to perform any of its powers and duties hereunder
including, but not limited to, Plan fiduciary responsibilities (other than any
responsibility to manage or control the Plan assets).
(c) To allocate in writing any of its powers and duties
hereunder, including but not limited to fiduciary responsibilities (other
than any responsibility to manage or control the plan assets) to those
persons who have been designated to perform Plan fiduciary
responsibilities.
(d) To construe and interpret the Plan in a discretionary
manner, including the power to construe disputed provisions.
(e) Subject to Article 10, to resolve all questions
arising in the administration, interpretation and application of the Plan,
including, but not limited to, questions as to the eligibility or the right of
any person to a benefit.
(f) To adopt such by-laws, rules, regulations, forms
and procedures from time to time as it deems advisable and appropriate in
the proper administration of the Plan.
(g) To receive from the Company or from Participants
such information as shall be necessary for the proper administration of the
Plan.
(h) To furnish, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and appropriate.
(i) To receive from the Trustee and review reports of
the financial condition and receipts and disbursements of the Trust Fund.
(j) To prescribe procedures to be followed by any
person in applying for distributions pursuant to the Plan and to designate
the forms or documents, evidence and such other information as the
Administrator may reasonably deem necessary, desirable or convenient to
support an application for such distribution.
(k) To issue directions to the Trustee, and thereby bind
the Trustee, concerning all benefits to be paid pursuant to the Plan.
(l) To apply consistently and uniformly the Committee
rules, regulations and determinations to all Participants and beneficiaries
in similar circumstances.
(m) As authorized by the Board, to amend the Plan to
maintain its qualified status.
8.3 Records and Notices. The Administrator shall keep a
record of all its proceedings and acts and shall maintain all such books of
accounts, records and other data as may be necessary for proper plan
administration. The Administrator shall notify the Trustee of any action
taken by the Administrator which affects the Trustee's Plan obligations or
rights and, when required, shall notify any other interested parties.
8.4 Compensation and Expenses. The expenses incurred by
the Administrator in the proper administration of the Plan shall be paid
from the Trust Fund. The Employer may elect to pay such expenses
directly. An Administrator who is an employee of the Employer shall not
receive any fee or compensation for services rendered.
8.5 Limitation of Authority. Except as authorized by the
Board, the Administrator shall not add to, subtract from or modify any of
the terms of the Plan, change or add to any benefits prescribed by the
Plan, or waive or fail to apply any Plan requirement for benefit eligibility.
ARTICLE 9
Administration of the Trust
9.1 Appointment of Trustee. The Company shall appoint
one or more Trustees to receive and hold in trust all contributions, and
Income, paid into the Trust Fund. The Company may remove the
Trustee or the Trustee may resign and a successor trustee shall be
appointed all pursuant to the requirements and procedure recited in the
Trust Agreement.
9.2 Authorization for Trust Agreement. The Company shall
enter into an agreement with the Trustee to provide for the administration
of the Trust Fund. In accordance with the provisions of the agreement,
the Company shall have the right at any time, and from time to time, to
amend the agreement.
9.3 Participant Direction of Investment of Account.
(a) Investment of funds. The Company, upon written
request of a Participant and in accordance with its uniform and
nondiscriminatory rules, may authorize Participants to direct the
investment of all or part of their Account in such funds as the Company
may select. The Participants' directions shall bind the Trustee unless and
until the Company amends or revokes the authorization for investment
direction by Participants. If the Trustee acts at the direction of a
Participant, the Employer, its board of directors, officers and employees,
the Administrator and the Trustee shall not be liable or responsible for
any loss resulting to the Trust Fund or to any Account or for any breach
of fiduciary responsibility by reason of any act done pursuant to the
direction of the Participant
(b) Investment Elections.
(1) Participants may choose to invest their Account
among the available subfunds in any whole percentage or dollar amount.
Elections shall be made in a manner prescribed by the Administrator and
verified in writing or as otherwise approved by the Administrator. Once
filed, a Participant's verified election will remain in effect until amended
or discontinued pursuant to this paragraph. If a Participant fails to direct
the investment of all or any portion of his Account, such amount shall be
invested in the fund uniformly designated by the Administrator on behalf
of the Participant.
(2) A Participant may change his investment election as
to further contributions and Income therein as of every January 1 or
July 1 or pursuant to rules prescribed by the Administrator. A Participant
may change his investment election as to his existing Account as of every
January 1 or July 1 or pursuant to rules prescribed by the Administrator.
Effective January 1, 1994, a Participant may
change his investment election as to further contributions and Income
therein as of every January 1, April 1, July 1 or October 1 or pursuant to
rules prescribed by the Administrator. A Participant may change his
investment election as to his existing Account as of every January 1, April
1, July 1 or October 1 or pursuant to rules prescribed by the
Administrator.
9.4 Funding Policy. The funding policy for the Plan hereby
requires the Trustee to invest and reinvest the Trust Fund for the
exclusive benefit of Plan participants and their beneficiaries in any
combination of corporate stocks, including stock of the Company (if
otherwise allowed), bonds, instruments of indebtedness, insurance
contracts (if otherwise allowed), government securities, loans to
Participants (if otherwise allowed), bank deposits and the Trustee's
common trust funds or pooled investment funds, if any, as the Trustee
deems appropriate for the Plan and consistent with applicable law.
<PAGE>
ARTICLE 10
Claims Procedure
10.1 Application for Benefits. Any person entitled to
benefits must file a written claim with the Administrator on forms
provided by the Administrator. Such application shall include all
information and evidence the Administrator deems necessary to properly
evaluate the merit of and to make any necessary determinations on a claim
for benefits. Unless special circumstances exist, a Participant shall be
informed of the decision on his claim within 90 days of the date all the
information and evidence necessary to process the claim is received.
Within such 90-day period, he shall receive a notice of the decision or a
notice that explains the special circumstances requiring a delay in the
decision and sets a date, no later than 180 days after all the information
and evidence necessary to process his claim have been received, by which
he can expect to receive a decision.
The claimant may assume that the claim has been denied
and may proceed to appeal the denial if the claimant does not receive any
notice from the Administrator within the 90-day period, or a notice of a
delayed decision within such 90 day period.
10.2 Notice of Denied Claim for Benefits. If a claim for
benefits is partially or wholly denied, the claimant will receive a notice
that: states the specific reason or reasons for denial; refers to provisions
of the Plan documents on which the denial is based; describes and
explains the need for any additional material or information that the
claimant must supply in order to make his claim valid; and explains the
steps that must be taken to submit his claim for review.
10.3 Review of Denied Claim. A claimant may file a
written appeal of a denied claim with the Administrator within 60 days
after receiving notice that his claim has been denied, including any
comments, statements or documents he may wish to provide. The
claimant may review all pertinent Plan documents upon reasonable request
to the Administrator. Within 60 days after the submission of the written
appeal, the Administrator shall render a determination on the appeal of the
claim in a written statement. The written decision shall contain the reason
or reasons for the decision and refer to specific Plan provisions on which
the decision is based. If special circumstances require a delay in the
decision, the Administrator shall notify the claimant of the reasons for the
delay within the 60-day period. A delayed decision shall be issued no
later than 120 days after the date the Administrator receives a request for
review. The determination rendered by the Administrator shall be binding
upon all parties.
ARTICLE 11
Amendment and Termination
11.1 Amendment or Restatement. The Company may
amend or restate the Plan at any time and from time to time and may
delegate Plan amendment responsibilities to the Administrator. No
amendment or restatement shall authorize any part of the Trust Fund,
other than amounts which are necessary 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
amendment or restatement shall be construed to: (1) Reduce a
Participant's Account balance determined as of the date immediately
preceding the effective date of the amendment or restatement; (2) Reduce
or eliminate any benefit protected by Code section 411(d)(6); or (3) Cause
or permit any portion of the Trust Fund to revert to, or become property
of, the Company. No amendment which affects the rights, duties or
responsibilities of the Trustee shall be effective without the Trustee's
written consent. The provisions of the Plan as in effect at the time of a
Participant's termination of Employment shall control as to that
Participant, unless otherwise specified in the Plan. If the Company
amends the Plan to no longer reflect the provisions of the volume
submitter master document, the Plan may be considered an individually
designed plan.
11.2 Termination and Discontinuance of Contributions.
The Company reserves the right to terminate the Plan at any time with
respect to any or all Participants. Any participating Employer shall be
permitted to discontinue or revoke its participation in the Plan. Upon
discontinuance of Plan contributions or full or partial termination of the
Plan, the Account of each affected Participant who has not received a
distribution of the vested portion of his Account or incurred five
consecutive one-year Breaks in Service shall become fully vested and
nonforfeitable. The Company shall provide the Trustee with written
notification of the full or partial termination of the Plan. In the event of
full or partial termination, the Employer's liability to pay plan benefits
shall be strictly limited to assets of the Trust Fund. No one shall have
any claim against the Company to provide any or all of the plan benefits
regardless of the sufficiency of the Trust Fund, except as otherwise
required by law. The termination of the Plan shall not result in the
reduction of any benefit protected by Code section 411(d)(6), except to
the extent permitted by applicable Treasury regulations.
11.3 Distribution Upon Termination. If the Plan
terminates pursuant to section 11.2 and the Company does not merge the
assets of the Plan with another qualified plan or continue the Plan as a
"wasting trust" by satisfying all ongoing plan qualification rules, the
Company shall distribute each Participant's Account in a lump sum;
however, if the Employer (or any member of a controlled group within
the meaning of Code sections 414(b), (c), (m) and (o) of which the
Employer is a member) establishes or maintains at any time within the
24-month period beginning 12 months before the time of termination
another defined contribution plan, other than an employee stock ownership
plan or simplified employee pension (as defined in Code section 408(k))
which covers 2% or more of the employees covered under the Plan at the
time of termination, each Participant's Account shall be transferred to
such other defined contribution plan. Participant consent to such a
transfer shall be required only if transfer of the Participant's Account
results in an elimination or reduction of Code section 411(d)(6) protected
benefits. Participant consent shall not be required if Participants'
Accounts are to be paid in a lump sum.
11.4 Merger, Consolidation or Transfer of Assets and
Liabilities. Upon any merger or consolidation with, or a transfer of assets
or liabilities to another plan, each Participant is entitled to receive a
benefit immediately after such event which is equal to or greater than the
benefit he would have been entitled to receive if the Plan had terminated
immediately prior to such event. Any such transfer, merger or
consolidation must not otherwise result in the elimination or reduction of
any benefit protected by Code section 411(d)(6).
11.5 Distribution Upon Disposition of Assets or
Subsidiary. Notwithstanding the distribution rules of Article 7, a
Participant's Account may be distributed in a lump sum in the event of the
disposition of at least 85% of the assets of the Employer (within the
meaning of Code section 409(d)(2)), or, if the Employer is a subsidiary of
the Company, the disposition by the Company of its interests in the
Employer (within the meaning of Code section 409(d)(3)) to an unrelated
entity provided (1) the Company or Employer continues to maintain the
Plan, and (2) the Participant continues employment with the corporation
acquiring such assets or such subsidiary.
11.6 Successor Employer. Any successor to the business
of the Employer may, with the written consent of the Company, continue
the Plan and Trust. Such successor shall succeed to all the rights, powers
and duties of the Employer. The Employment of any employee of the
Employer who continues in the employ of the successor shall not be
deemed to have been terminated or severed for any purpose of the Plan.
ARTICLE 12
General Provisions
12.1 Limitation on Liability. In no event shall the
Company, Employer, Administrator or any employee, officer or director
of the Company or Employer incur any liability for any act or failure to
act unless such act or failure to act constitutes a lack of good faith,
willful misconduct or gross negligence with respect to the Plan or Trust Fund.
12.2 Indemnification. The Trust Fund shall indemnify
the Administrator and any employee, officer or director of the Employer
against all liabilities arising by reason of any act or failure to act unless
such act or failure to act is due to such person's own gross negligence or
willful misconduct or lack of good faith in the performance of his duties
to the Plan or Trust Fund. Such indemnification shall include, but not be
limited to, expenses reasonably incurred in the defense of any claim,
including attorney and legal fees, and amounts paid in any settlement or
compromise; provided, however, that indemnification shall not occur to
the extent that it is not permitted by applicable law. If Trust Fund assets
are insufficient or indemnification is not permitted by applicable law, the
Employer shall indemnify such person. Indemnification shall not be
deemed the exclusive remedy of any person entitled to indemnification
pursuant to this section. The indemnification provided hereunder shall
continue as to a person who has ceased acting as a director, officer,
member, agent or employee of the Administrator or as an officer, director
or employee of the Employer, and such person's rights shall inure to the
benefit of his heirs and representatives.
12.3 Compliance with Employee Retirement Income
Security Act of 1974. Notwithstanding any other provisions of this Plan,
a fiduciary or other person shall not be relieved of any responsibility or
liability for any responsibility, obligation or duty imposed upon such
person pursuant to the Employee Retirement Income Security Act of
1974, as amended from time to time.
12.4 Nonalienation of Benefits. Except with respect to
any indebtedness owing to the Trust Fund or payments required pursuant
to a qualified domestic relations order as defined by the Code, or as
otherwise permitted by law, benefits payable by the Plan shall not be
subject to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy, either voluntary or
involuntary. Any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, charge or otherwise dispose of any right to Plan
benefits shall be void.
12.5 Employment Not Guaranteed by Plan. The
establishment of this Plan, its amendments and the granting of a benefit
pursuant to the Plan shall not give any Participant the right to continued
Employment with the Employer, or limit the right of the Employer to
dismiss or impose penalties upon the Participant or modify the terms of
Employment of any Participant.
12.6 Form of Communication. Any election,
application, claim, notice or other communication required or permitted to
be made by or to a Participant, the Administrator or Company shall be
made in writing and in such form as the Administrator or Company shall
prescribe. A communication shall be effective upon mailing if sent first
class, postage prepaid and addressed to the Administrator or Company at
the principal office of the Administrator or Company or to the Participant
at his last known address.
12.7 Facility of Payment. If a Participant's duly
qualified guardian or legal representative makes claim for any amount
owing to the Participant, the Trustee shall pay the amount to which the
Participant is entitled to such guardian or legal representative. In the
event a distribution is to be made to a minor, the Administrator may
direct that such distribution be paid to the legal guardian, or if none, to a
parent of such minor or an adult with whom the beneficiary maintains his
residence, or to the custodian for such beneficiary under the Uniform Gift
to Minors Act if permitted by the laws of the state in which the
beneficiary resides. Any payment made pursuant to this section in good
faith shall be a payment for the Account of the Participant and shall be a
complete discharge from any liability of the Fund or the Trustee.
12.8 Location of Participant or Beneficiary Unknown. If
the Administrator is unable to pay benefits from the Plan to any
Participant or beneficiary due to the Administrator's inability to locate
such Participant or beneficiary, after forwarding a registered letter, return
receipt requested, to the last known address of such Participant or
beneficiary and after further diligent effort, the amount to be distributed
shall be treated as a Forfeiture. If the Participant or beneficiary is
located subsequent to the allocation of the Forfeiture, the forfeited amount
should be restored, first from Forfeitures, if any, then Income and, last, as
an additional Employer contribution. In the event a Participant or
beneficiary cannot be located upon termination of the Plan, any amount
payable to such Participant or beneficiary shall be transferred at the
earliest possible date to the state of the Participant's or beneficiary's last
known address pursuant to the terms of that State's abandoned property
law. Upon such transfer, the Employer, Administrator and Trustee shall
have no further liability for the amount so transferred.
12.9 Service in More Than One Fiduciary Capacity.
Any individual, entity or group of persons may serve in more than one
fiduciary capacity with respect to the Plan and Trust Fund.
12.10 Offset. In the event any payment is made by the
Trustee to any individual who is not entitled to such payment, the Trustee
shall have the right to reduce future payments due to such individual by
the amount of any such erroneous payment. This right of offset,
however, shall not limit the rights of the Trustee to recover such
overpayments in any other manner.
<PAGE>
RECORD OF ACTION TAKEN BY
THE RETIREMENT PLAN COMMITTEE
OF EAGLE FOOD CENTERS, INC.
By written action of the Retirement Plan Committee of Eagle Food
Centers, Inc., an Illinois Corporation (the "Company"), the following
recitals and resolutions are effective as of October 1, 1996:
RECITALS
A. The Company maintains the Eagle Food Centers, Inc. 401(k)
Plan (the "Plan").
B. The Company desires to amend the Plan to permit investment
in Company stock.
C. The Board of Directors of the Company has authorized the
Retirement Plan Committee (the "Committee") to act on the Company's
behalf with respect to the Plan.
RESOLUTIONS
1. The first paragraph of section 4.3 of the Plan is replaced with
the following:
The Administrator shall determine the value of a
Participant's Account for purposes of Articles 6 and 7 as of
the Valuation Date immediately preceding the date the
distribution occurs or commences as if such Valuation Date
were the last day of a Plan Year (except for Company
stock which shall be valued as of the most recent business
day for which a valuation is available), including in that
valuation (a) the allocation of contributions or Forfeitures,
if any, for such year if the Account otherwise qualifies for
such allocation and the Valuation Date is actually the last
day of a Plan Year or if the Plan otherwise requires
allocation of such amount as of such Valuation Date, and
(b) elective contributions made to the Plan on behalf of the
Participant since the Valuation Date.
2. A new section 4.4 is added as follows:
4.4 Valuation of Company Stock. For purposes of this
Article 4, the value of Company stock held by the Plan
shall be the closing price of such stock as reported on the
NASDAQ-NMS as of the applicable Valuation Date or the
last day Company stock was traded if Company stock is
not traded on the Valuation Date.
3. A new subsection 7.2(d) is added as follows:
(d) Payments in Company Stock. Distribution of a
Participant's Account, to the extent invested in Eagle Food
Centers, Inc. stock, may be made, pursuant to the
Participant's written election, in whole shares of Company
stock with cash paid for fractional shares.
4. Section 7.8 of the Plan is amended by adding the following as
the last sentence:
If a withdrawal is made pursuant to this section 7.8, the
Participant may, to the extent the Account is invested in
Company stock, elect to receive whole shares of Company
stock with cash for fractional shares.
5. A new section 8.6 is added as follows:
8.6 Voting of Company Shares. The Administrator shall
furnish to each Participant who has Company stock
allocated to his Account, notice of the date and purpose of
each meeting of the stockholders of the Company at which
Company stock are entitled to be voted. The
Administrator shall request from each such Participant
instructions as to the voting at that meeting of Company
stock allocated to his Account. If the Participant furnishes
such instructions within the time specified in the
notification given to him, the Trustee shall vote such
Company stock in accordance with the Participant's
instructions, provided such Participant has not been
improperly influenced so as to affect his instructions. All
Company stock allocated to Accounts as to which the
Trustee does not receive voting instructions as specified
above and all unallocated Company shares held by the
Trustee shall be voted by the Trustee in its discretion and
in accordance with its fiduciary duties under ERISA;
however, the Trustee, in the exercise of its fiduciary duties
under ERISA, may determine that is should vote the
Company stock in some other manner.
Similarly, the Administrator shall furnish to each
Participant who has Company stock allocated to his
Account notice of any tender offer for, or a request or
invitation for tenders of, Company stock made to the
Trustee. The Administrator shall request from each such
Participant instructions as to the tendering of Company
stock allocated to his Account, and for this purpose, the
Participants shall be provided with a reasonable period of
time in which they may consider any such tender offer for,
or request or invitation for tenders of, Company stock. The
Trustee shall tender the Company stock as to which the
Trustee has received instructions to tender from
Participants within the time specified, provided such
Participants have not been improperly influenced so as to
affect their instructions. As to all Company stock allocated
to Accounts as to which the Trustee has not received
instructions from Participants and as to all unallocated
Company shares held by the Trustee, the Trustee may
tender the same proportion thereof as the Company stock
as to which the Trustee has received instructions from
Participants to tender bear to all Company stock with
respect to which the Trustee has received instructions from
Participants to tender and not to tender, however the
Trustee in the exercise of its fiduciary duties under ERISA,
may determine it must act otherwise.
The Administrator shall, along with each notice of the
date and purpose of each meeting and each notice of any
tender offer for, or a request or invitation for tenders of,
Company stock made to the Trustee, cause to be furnished
to each Participant a copy of the proxy solicitation
material, copies of all materials distributed to stockholders
of the Company in connection with any tender or exchange
offer, and any other information which would reasonably
be necessary to enable each Participant to make an
informed voting or tender decision.
Exhibit 23.a
INDEPENDENT AUDITORS CONSENT
We consent to the incorporation by reference in this Registration
Statement of Eagle Food Centers, Inc. on Form S-8, relating to 1,000,000
shares of Common Stock issuable under the Eagle Food Centers, Inc. 401(k)
Plan, of our report dated March 22, 1996, appearing in the Annual Report on
Form 10-K of Eagle Food Centers, Inc. for the year ended February 3,
1996.
Davenport, Iowa
June 11, 1996
