<PAGE> Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
The Advest Group, Inc.
Exact name of registrant as specified in its charter)
Delaware 06-095044
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
1 Commercial Plaza-280 Trumbull Street, Hartford, Connecticut 06103
(Address of Principal Executive Offices)
The Advest Group, Inc. Thrift Plan
(Full title of the plan)
Lee G. Kuckro, Esq.
Secretary and General Counsel
The Advest Group, Inc.
1 Commercial Plaza-280 Trumbull Street
Hartford, Connecticut 06103
(Name and address of agent for service)
(203) 525-1421
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered per share price fee
- ------------------------------------------------------------------------
Common Stock, 300,000 shs.(1) $7.0625(2) $2,118,750 $662.11
$.01 par value
9% Convertible
Subordinated
Debentures due
2008 $1,000,000(1) 100% $1,000,000 $312.50
Common Stock,
$.01 par value 73,692 shs.(3) $7.0625(2) $520,449.75 $162.64
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 Advest Group, Inc. Thrift Plan (the "Plan").
(1) Estimated pursuant to Rule 457(c) and Rule 457(h) as the number of shares
of Common Stock, 9% Convertible Subordinated Debentures ("Debentures") of The
Advest Group, Inc. to be purchased by the Plan with employer and employee
contributions, which securities may be acquired by participants in the Plan.
(2) Based on the average of the high and low prices of a share of Common Stock
as reported in the consolidated reporting system on November 12, 1993.
(3) Estimated as the number of shares into which the Debentures are
convertible.
Total of sequentially numbered pages 52.
Exhibit index sequential page number page 8.
<PAGE>
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
This Registration Statement relates to shares of Common Stock, par value
$.01 per share ("Common Stock") and 9% Convertible Subordinated Debentures due
2008 ("Debentures"), which may be purchased with employer and employee
contributions under The Advest Group, Inc. Thrift Plan (the "Plan"). This
Registration Statement also relates to shares of Common Stock into which the
Debentures are convertible.
Item 3. Incorporation of Documents by Reference.
The following documents filed by The Advest Group, Inc. (the "Company")
with the Securities and Exchange Commission are incorporated herein by
reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1992, filed pursuant to Section 13(a) of the Securities Exchange
Act of 1934, as amended (the "1934 Act");
(b) The Company's quarterly reports on Form 10-Q for the quarters ended
December 31, 1992, March 31, 1993 and June 30, 1993;
(c) The description of the Company's Common Stock which is contained in its
registration statement on Form 10 filed under the 1934 Act, and any amendment or
report filed under the 1934 Act for the purpose of updating such description;
and
(d) The description of the Debentures contained in the Company's Registration
Statement on Form 8-A filed under the 1934 Act and any amendment or report filed
under the 1934 Act for the purpose of updating such description.
All documents subsequently filed by the Company or the Plan pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities remaining unsold shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The consolidated balance sheet as of September 30, 1992, and the
consolidated statements of operations, changes in shareholders' equity and cash
flows for the year then ended, incorporated by reference in this registration
statement, have been incorporated herein in reliance on the report of Coopers &
Lybrand, independent accountants, given on the authority of that firm as experts
in auditing and accounting.
With respect to the unaudited interim financial information incorporated by
reference in this registration statement, the independent accountants have
reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their
separate reports included in the Company's quarterly reports on Form 10-Q for
the quarters ended December 31, 1992, March 31, 1993 and June 30, 1993, and
incorporated by reference herein, state that they did not audit and they do not
<PAGE> - 2 -
express an opinion on such interim financial information. Accordingly, the
degree of reliance on their reports on such information should be restricted in
light of the limited nature of the review procedures applied. The accountants
are not subject to the liability provisions of Section 11 of the Securities Act
of 1933 for their reports on the unaudited interim financial information because
each report is not a "report" or a "part" of the registration statement prepared
or certified by the accountants within the meaning of Sections 7 and 11 of the
Act.
The financial statements and schedules included in or incorporated by
reference into this Form S-8 registration statement, to the extent and for the
periods indicated in their reports, have been audited by Arthur Andersen & Co.,
independent public accountants, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
Item 6. Indemnification of Directors and Officers.
Under Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL"), directors and officers as well as other employees and individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement in connection with specified actions, suits
or proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of a corporation--a "derivative action") if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interest of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard of care is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense of settlement of
such an action and the DGCL requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. Additionally, a corporation is required to indemnify its
directors and officers against expenses to the extent that such directors or
officers have been successful on the merits or otherwise in any action, suit or
proceeding or in defense of any claim, issue or matter therein.
Unless ordered by a court, an indemnification can be made by a corporation
only upon a determination that indemnification is proper in the circumstances
because the party seeking indemnification has met the applicable standard of
conduct as set forth in Delaware law. The indemnification provided by Section
145 of the DGCL includes the right to be paid by the corporation the expenses
incurred in defending proceedings in advance of their final disposition. Such
advance payment of expenses, however, may be made only upon delivery to the
corporation by the indemnified party of an undertaking to repay all amounts so
advanced if it shall ultimately be determined that the person receiving such
payments is not entitled to be indemnified.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred by Section
145 of the DGCL is not exclusive of any other right which any person may have or
acquire under any statute, provision of the certificate of incorporation or
bylaws, or otherwise. In addition, Section 145 of the DGCL authorizes a
corporation to maintain insurance, at its expense, to protect itself and any of
its directors, officers, employees or agents against any expense, liability or
loss, whether or not the corporation would have the power to indemnify such
person against such expense, liability or loss under the DGCL.
<PAGE> - 3 -
The Company's Certificate of Incorporation permits indemnification of
directors and officers to the full extent permitted by the DGCL. In addition,
the Company currently maintains an insurance policy insuring its officers and
directors against certain liabilities incident to their position with the
Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed herewith:
Exhibit No. Description
4.1 The Advest Group, Inc. Thrift Plan
4.2 Indenture pertaining to Debentures (Incorporated by reference to Exhibit
4(e) to the Company's Registration Statement on Form S-1 (No. 2-81997))
5 Internal Revenue Service determination letter with respect to the Plan
(The Company undertakes to submit the Plan to the Internal Revenue Service
("IRS") and to make all changes required by the IRS in order to qualify the
Plan.)
15 Letter re unaudited interim financial information
23.1 Consent of Coopers & Lybrand
23.2 Consent of Arthur Andersen & Co.
24 Power of attorney (See Signature pages.)
Item 9. Undertakings.
A. Undertaking to Update Annually
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
(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;
<PAGE> - 4 -
provided, however, that paragraph (A)(1)(i) and (A)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. Undertaking With Respect to Incorporating Subsequent Exchange Act
Documents By Reference
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.
C. Undertaking With Respect to Indemnification of Directors, Officers or
Controlling Persons
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> - 5 -
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 Hartford, State of Connecticut on October 28, 1993.
The Advest Group, Inc.
By Allen Weintraub
Name: (Allen Weintraub)
Title: Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby constitutes Allen Weintraub and Lee G. Kuckro and each of them
singly, such person's true and lawful attorneys, with full power to them and
each of them to sign for such person and in such person's name and capacity
indicated below, any and all amendments to this Registration Statement, hereby
ratifying and confirming such person's signature as it may be signed by said
attorneys to any and all amendments.
Signature Title Date
Allen Weintraub Chief Executive Officer October 28, 1993
(Allen Weintraub) and Director (Principal
Executive Officer)
Martin M. Lilienthal Senior Vice President October 28, 1993
(Martin M. Lilienthal) and Treasurer (Chief
Financial and Principal
Accounting Officer)
George A. Boujoukos Director October 28, 1993
(George A. Boujoukos)
Anthony E. Cascino Director October 28, 1993
(Anthony E. Cascino)
Richard G. Dooley Director October 28, 1993
(Richard G. Dooley)
<PAGE> - 6 -
Grant Kurtz Director October 28, 1993
(Grant Kurtz)
Anthony A. LaCroix Chairman of the Board October 28, 1993
(Anthony A. LaCroix) and Director
Charles T. Larus Director October 28, 1993
(Charles T. Larus)
Corine T. Norgaard Director October 28, 1993
(Corine T. Norgaard)
John A. Powers Director October 28, 1993
(John A. Powers)
Robert L. Thomas Director October 28, 1993
(Robert L. Thomas)
<PAGE> - 7 -
Pursuant to the requirements of the Securities Act of 1933, the trustees
(or other persons who administer the Plan) have duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut on October 28, 1993.
The Advest Group, Inc. Thrift Plan
By: Robert W. Rulevich
Name: (Robert W. Rulevich)
Title: Plan Administrator
<PAGE> - 8 -
EXHIBIT INDEX
Exhibit No. Description Page
4 The Advest Group, Inc. Thrift Plan 9
15 Letter re unaudited interim financial
information 50
23.1 Consent of Coopers & Lybrand 51
23.2 Consent of Arthur Andersen & Co. 52
24 Power of Attorney (See Signature pages.)
<PAGE> - 9 -
Exhibit 4
ADVEST THRIFT PLAN
Amended and Restated
Effective as of December 31, 1992
<PAGE> - 10 -
TABLE OF CONTENTS
ARTICLE I -- Establishment of the Plan . . . . . . . . . . . . . 1
1.1 Establishment of the Plan . . . . . . . . . . . . . . . . . 1
1.2 Applicability of the Plan . . . . . . . . . . . . . . . . . 1
ARTICLE II -- Definitions . . . . . . . . . . . . . . . . . . . 1
ARTICLE III -- Administration . . . . . . . . . . . . . . . . . 7
3.1 Committee . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Named Fiduciary . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Powers of the Committee . . . . . . . . . . . . . . . . . . 7
3.4 Delegation of Duties. . . . . . . . . . . . . . . . . . . . 7
3.5 Administrator . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Agent for Service . . . . . . . . . . . . . . . . . . . . . 8
3.7 Action by Majority. . . . . . . . . . . . . . . . . . . . . 8
3.8 Secretary; Action by Single Member. . . . . . . . . . . . . 8
3.9 Member's Own Participation. . . . . . . . . . . . . . . . . 8
3.10 Records. . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.11 Compensation; Agents . . . . . . . . . . . . . . . . . . . 8
3.12 Bonding; Liability of Committee. . . . . . . . . . . . . . 8
3.13 Fiduciary Responsibility . . . . . . . . . . . . . . . . . 8
ARTICLE IV -- Participation and Enrollment . . . . . . . . . . 9
4.1 Service Requirement . . . . . . . . . . . . . . . . . . . . 9
4.2 Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Termination of Active Participation . . . . . . . . . . . . 9
4.4 Re-entry After Ceasing to be an Active Participant. . . . . 9
ARTICLE V -- Contributions . . . . . . . . . . . . . . . . . . 9
5.1 Employer Contributions. . . . . . . . . . . . . . . . . . . 9
5.2 Employee Contributions. . . . . . . . . . . . . . . . . . . 10
5.3 Actual Deferral Percentage Test . . . . . . . . . . . . . . 11
5.4 Adjustment to Actual Deferral Percentage Tests. . . . . . . 12
5.5 Actual Contribution Percentage Tests. . . . . . . . . . . . 14
5.6 Adjustment to Actual Contribution Percentage Tests. . . . . 15
5.7 Crediting of 401(k) Account Contributions to
Participants. . . . . . . . . . . . . . . . . . . . . . . 16
5.8 Allocations of ESOP Contributions . . . . . . . . . . . . . 16
5.9 Release of Shares for Allocation. . . . . . . . . . . . . . 17
5.10 Allocation of Dividends. . . . . . . . . . . . . . . . . . 17
5.11 Pass-Through of Dividends. . . . . . . . . . . . . . . . . 18
5.12 Rollovers and Transfers. . . . . . . . . . . . . . . . . . 18
5.13 Allocation of Forfeitures. . . . . . . . . . . . . . . . . 18
5.14 Limitation . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI -- Vesting . . . . . . . . . . . . . . . . . . . . . 19
6.1 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII -- Investment Elections . . . . . . . . . . . . . . 19
7.1 Investment of Contributions . . . . . . . . . . . . . . . . 19
ARTICLE VIII -- Withdrawals . . . . . . . . . . . . . . . . . . 20
8.1 Hardship Withdrawals. . . . . . . . . . . . . . . . . . . . 20
ARTICLE IX -- Loans . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.2 Rate of Interest. . . . . . . . . . . . . . . . . . . . . . 22
<PAGE> - 11 -
9.3 Committee Approval. . . . . . . . . . . . . . . . . . . . . 22
9.4 Loan Collateral . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE X -- Payment of Benefits . . . . . . . . . . . . . . . 23
10.1 Payment Options. . . . . . . . . . . . . . . . . . . . . . 23
10.2 Commencement of Benefit Payments . . . . . . . . . . . . . 23
10.3 Form of Payment to Participants. . . . . . . . . . . . . . 23
10.4 Put Option . . . . . . . . . . . . . . . . . . . . . . . . 24
10.5 Protections and Rights . . . . . . . . . . . . . . . . . . 24
10.6 Protections and Rights Nonterminable . . . . . . . . . . . 24
10.7 Fair Market Value. . . . . . . . . . . . . . . . . . . . . 24
10.8 Special Distribution and Payment Requirements. . . . . . . 25
10.9 Special Distributions to Qualified Participants. . . . . . 25
10.10 Change of Payment Method. . . . . . . . . . . . . . . . . 26
10.11 Consent to Distributions. . . . . . . . . . . . . . . . . 26
10.12 Direct Transfers. . . . . . . . . . . . . . . . . . . . . 26
10.13 Forfeitures . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XI -- Death Benefits . . . . . . . . . . . . . . . . . 27
11.1 Distribution Upon Death. . . . . . . . . . . . . . . . . . 27
11.2 Designation of Beneficiary . . . . . . . . . . . . . . . . 27
ARTICLE XII -- Stock Rights of Participants. . . . . . . . . . . 28
12.1 Voting Rights. . . . . . . . . . . . . . . . . . . . . . . 28
12.2 Rights on Tender or Exchange Offer . . . . . . . . . . . . 28
12.3 Rights in Event of Default . . . . . . . . . . . . . . . . 29
ARTICLE XIII -- Termination of Plan . . . . . . . . . . . . . . 29
13.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . 29
13.2 Distribution . . . . . . . . . . . . . . . . . . . . . . . 29
13.3 Final Expenses . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XIV -- Amendment of Plan . . . . . . . . . . . . . . . 29
14.1 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . 29
14.2 Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . 30
14.3 Change in Vesting. . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XV -- Claims Procedure. . . . . . . . . . . . . . . . . 30
15.1 Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 30
15.2 Notice of Denial . . . . . . . . . . . . . . . . . . . . . 30
15.3 Review . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XVI -- The Trustee . . . . . . . . . . . . . . . . . . 31
ARTICLE XVII -- Miscellaneous Provisions. . . . . . . . . . . . 31
ARTICLE XVIII -- Top-Heavy Plan Provisions . . . . . . . . . . 32
18.1 Compensation . . . . . . . . . . . . . . . . . . . . . . . 32
18.2 Key Employee . . . . . . . . . . . . . . . . . . . . . . . 32
18.3 Top-Heavy Plan . . . . . . . . . . . . . . . . . . . . . . 33
18.4 Top-Heavy Ratio. . . . . . . . . . . . . . . . . . . . . . 33
18.5 Permissive Aggregation Group . . . . . . . . . . . . . . . 33
18.6 Required Aggregation Group . . . . . . . . . . . . . . . . 33
18.7 Determination Date . . . . . . . . . . . . . . . . . . . . 33
18.8 Determination Period . . . . . . . . . . . . . . . . . . . 34
18.9 Valuation Date . . . . . . . . . . . . . . . . . . . . . . 34
18.10 Special Provisions. . . . . . . . . . . . . . . . . . . . 34
<PAGE> - 12 -
[page 1]
THE ADVEST THRIFT PLAN
ARTICLE I
Establishment of the Plan
1.1 Establishment of the Plan. The Advest Group, Inc. hereby amends and
restates an employee stock ownership plan for the benefit of its eligible
Employees to reflect the merger into this plan of The Advest Group, Inc.
Incentive Savings Plan and The Advest Group, Inc. Employees' Retirement Plan,
effective as of December 31, 1992, which plan shall hereafter be known as "The
Advest Thrift Plan" (hereinafter referred to as the "Plan").
1.2 Applicability of the Plan. The provisions set forth herein are
applicable only to Employees in the employ of the Company on or after the
Effective Date (except as otherwise indicated).
ARTICLE II
Definitions
When used herein, each of the following terms shall have the corresponding
meaning set forth below unless a different meaning is plainly required by the
context in which a term is used:
2.1 "Account" shall mean the 401(k) Account and ESOP Account of a
Participant whether or not such accounts have actually been combined into one
account.
2.2 "Accrued Benefit" shall mean the balance of a Participant's Account.
2.3 "Act" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all regulations issued pursuant thereto.
2.4 "Active Participant" shall mean an Employee who is eligible to
participate in the Plan and has become and continues to be an Active Participant
in the Plan under the terms of Article IV hereof.
2.5 "Administrator" shall mean the person or persons designated by the
Committee, pursuant to Section 3.5 hereof, as the Administrator of the Plan,
within the meaning of Section 3 (16)(a) of the Act.
2.6 "Affiliate" shall mean (i) a member of a controlled group of
corporations, as defined in Section 1563(a) of the Code, determined without
regard to Sections 1563(a)(4) and 1563(e)(3)(C), of which the Company is a
member or (ii) an unincorporated trade or business which is under common control
with the Company as determined in accordance with Section 414(c) of the Code.
Notwithstanding the foregoing, for purposes of applying the contribution
limitation set forth in Section 5.14 hereof, any determination under Section
1563 of the Code shall be made assuming the phrase "more than 50 percent" was
substituted for the phrase "at least 80 percent" each place it appears in
Section 1563(a)(1) of the Code.
2.7 "Beneficiary" shall mean a Participant's surviving spouse, if any, or
any other person designated by a Participant who is entitled to receive any
benefits payable hereunder upon the Participant's death pursuant to Section 11.2
<PAGE> - 13 -
hereof, or the executor or administrator of the Participant's estate if there is
no surviving spouse and if no other Beneficiary shall have been effectively
designated by the Participant.
2.8 "Board" shall mean the Board of Directors of the Company or its
Executive Committee.
[page 2]
2.9 "1-Year Break in Service" shall mean the failure of an individual to
complete more than 500 Hours of Service in a Plan Year; provided, however, that
for the short Plan Year beginning October 1, 1992 and ending December 31, 1992,
a 1-Year Break in Service shall mean the period from January 1, 1992 to December
31, 1992 during which an Employee fails to complete more than 500 Hours of
Service. For purposes of this Section 2.9 only, an Employee who is absent from
work will be credited with an Hour of Service either during the Plan Year in
which such absence commences, or, if the Employee would not have incurred a 1-
Year Break in Service in such Plan Year without regard to this sentence, during
the following Plan Year, for each hour, based on the Employer's standard work
week and work day as in effect from time to time, during which such Employee is
absent from work by reason of (i) the pregnancy of the Employee, (ii) the birth
of a child of the Employee, (iii) the placement of a child with the Employee in
connection with the Employee's adoption of such child, or (iv) the need for
caring for a child referred to in clause (ii) or (iii) immediately following
such birth or placement, but only if the Participant has furnished to the
Administrator such timely information as may be reasonably required to establish
that the absence from work is for one or more of the reasons described in
clauses (i) through (iv).
2.10 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and all regulations issued pursuant thereto.
2.11 "Code Section 415 Compensation" shall mean the Participant's wages
and salaries for personal services actually rendered in the course of employment
with the Employer maintaining the Plan paid or accrued during the Plan Year.
Code Section 415 Compensation shall exclude (a)(1) contributions made by the
Employer to a plan of deferred compensation to the extent that, before the
application of the Code Section 415 limitations to the Plan, the contributions
are not includable in the gross income of the Employee for the taxable year in
which contributed, (2) Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, and (3) any
distributions from a plan of deferred compensation regardless of whether such
amounts are includable in the gross income of the Employee when distributed
except any amounts received by an Employee pursuant to an unfunded non-qualified
plan to the extent such amounts are includable in the gross income of the
Employee; (b) amounts realized from the exercise of a non-qualified stock option
or when restricted stock (or property) held by an Employee either becomes freely
transferable or is no longer subject to a substantial risk of forfeiture; (c)
amounts realized from the sale, exchange or other disposition of stock acquired
under a qualified stock option; and (d) other accounts which receive special tax
benefits, such as premiums for group term life insurance (but only to the extent
that the premiums are not includable in the gross income of the Employee), or
contributions made by the Employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are excludable from the gross
income of the Employee).
<PAGE> - 14 -
2.12 "Committee" shall mean the Administrative Committee established
pursuant to Section 3.1 hereof.
2.13 "Company" shall mean The Advest Group, Inc. or any successor
corporation or business organization that assumes the obligations of the Plan
with respect to its employees.
2.14 "Compensation" shall mean the base pay, plus any premiums for
overtime or night work, plus any additional compensation under any bonus or
incentive plans paid to an Employee during the Plan Year, including any salary
deferrals under a plan intended to meet the requirements of either Section
401(k) or Section 125 of the Code. Compensation in excess of $200,000 shall be
disregarded; provided, however, that such limit shall be adjusted as permitted
under Section 401(a)(17) of the Code.
2.15 "Effective Date" shall mean December 31, 1992.
[page 3]
2.16 "Employee" shall mean any person employed by the Employer, excluding
any person hired or retained on a contract basis.
2.17 "Employer" shall mean the Company and each Affiliate that has adopted
the Plan or otherwise agreed to participate in the Plan, provided that the Board
has approved the participation of such Affiliate under the Plan.
2.18 "Entry Date" shall mean January 1, April 1, July 1 and October 1 of
each calendar year.
2.19 "ESOP Account" shall mean the account kept for a Participant,
which reflects amounts attributable to contributions made to the Plan prior to
the Effective Date, amounts transferred to the Plan from The Advest Group, Inc.
Employees' Retirement Plan attributable to amounts transferred to such plan from
The Advest Group, Inc. Employee Stock Ownership Plan which was in effect on
September 30, 1984, any amounts contributed to the Plan on or after the
Effective Date pursuant to Section 5.1(a), and any forfeitures of any such
amounts allocated pursuant to Section 5.13.
2.20 "ESOP Compensation" shall mean the total payments received by a
Participant from the Employer during the Plan Year and reportable on his
Internal Revenue Service Form W-2, including any amounts deferred by a
Participant under a qualified cash or deferred arrangement maintained by the
Employer pursuant to Section 401(k) of the Code and the amount of any reduction
in a Participant's compensation under a cafeteria plan maintained by the
Employer pursuant to Section 125 of the Code, and excluding amounts in excess of
$60,000, multiplied by the sum of one (1) plus a fraction, the numerator of
which is the Participant's Years of Service (not to exceed twenty (20)) and the
denominator of which is forty (40).
2.21 "Family Member" shall mean, with respect to an affected Participant,
such Participant's spouse and such Participant's lineal descendants and
ascendants and their spouses, all as described in Section 414(q)(6)(B) of the
Code.
2.22 "Fiduciary" shall mean any person (i) who exercises any discretionary
authority or discretionary control respecting management of the Plan or any
authority or control respecting management or disposition of assets held under
<PAGE> - 15 -
the Plan but shall not include a Participant exercising such authority or
control solely by reason of investment of his own Account under Article VII of
this Plan; (ii) who renders investment advice, direct or indirect, as to assets
held under the Plan or has any authority or responsibility to do so; or (iii)
who has any discretionary authority or discretionary responsibility in the
administration of the Plan, within the meaning of Section 4975(e)(3) of the
Code.
2.23 "401(k) Account" shall mean the account kept for a Participant, which
reflects the Participant's Account excluding the Participant's ESOP Account.
2.24 "414(s) Compensation" shall mean, with respect to any Employee, his
deferred compensation plus Code Section 415 Compensation paid during a Plan
Year. The amount of 414(s) Compensation with respect to any Employee shall
include 414(s) Compensation during the twelve (12) month period ending on the
last day of the Plan Year, except that for Plan Years beginning prior to January
1, 1990, 414(s) Compensation shall only be recognized as of an Employee's
effective date of participation in the Plan. 414(s) Compensation in excess of
$200,000 shall be disregarded; provided, however, that such limit shall be
adjusted at the same time and in the same manner as provided under Section
415(d) of the Code.
2.25 "Highly Compensated Employee" shall mean an Employee who performed
services for the Employer during the determination year and is in one or more of
the following groups:
[page 4]
(a) Employees who at any time during the determination year or look-
back year were five-percent owners of the Employer. Five-percent owner means
any person who owns (or is considered as owning within the meaning of Section
318 of the Code) more than five percent of the outstanding stock of the Employer
or stock possessing more than five percent of the total combined voting power of
all stock of the Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under Sections 414(b), (c), (m) or
(o) of the Code shall be treated as separate employers.
(b) Employees who received Code Section 415 Compensation during the
look-back year from the Employer in excess of $75,000 (as adjusted at the same
time and in the same manner as provided under Section 415(d) of the Code).
(c) Employees who received Code Section 415 Compensation during the
look-back year from the Employer in excess of $50,000 (as adjusted at the same
time and in the same manner as provided under Section 415(d) of the Code) and
were in the top paid group of Employees for the Plan Year.
(d) Employees who during the look-back year were officers of the
Employer (as that term is defined within the meaning of the Treasury Regulations
under Section 416 of the Code) and received Code Section 415 Compensation during
the look-back year from the Employer greater than 50 percent of the limit in
effect for any such Plan Year under Section 415(b)(1)(A) of the Code. The
number of officers shall be limited to the lesser of (i) 50 Employees; or (ii)
the greater of three Employees or ten percent of all Employees. If the Employer
does not have at least one officer whose annual Compensation is in excess of 50
percent of the Code Section 415(b)(1)(A) limit, then the highest paid officer of
the Employer will be treated as a Highly Compensated Employee.
<PAGE> - 16 -
(e) Employees who are in the group consisting of the 100 Employees paid
the greatest Compensation during the determination year and are also described
in (b), (c) or (d) above when these paragraphs are modified to substitute
"determination year" for "look-back year."
The "determination year" shall be the Plan Year for which testing is being
performed, and the "look-back year" shall be the immediately preceding twelve-
month period. The "top paid group" of Employees shall mean the top 20 percent
of Employees who performed services for the Employer during the applicable year,
ranked according to the amount of Code Section 415 Compensation received from
the Employer during such year.
For purposes of this Section, the determination of Code Section 415
Compensation shall be based only on Code Section 415 Compensation which is
actually paid and shall be made without regard to Code Sections 125, 402(a)(8),
402(h)(1)(B) and 403(b).
In determining who is a Highly-Compensated Employee, all Affiliates shall
be taken into account as a single employer, and leased employees within the
meaning of Sections 414(n)(2) and 414(o)(2) of the Code shall be considered
Employees unless such leased employees are covered by a plan described in
Section 414(n)(5) of the Code and are not covered in any qualified plan
maintained by the Employer. In addition, highly compensated former employees
shall be treated as Highly Compensated Employees without regard to whether they
performed services during the determination year.
2.26 "Highly Compensated Participant" shall mean any Highly Compensated
Employee who is eligible to participate in the Plan.
2.27 "Hour of Service" shall mean (i) each hour for which an individual is
directly or indirectly paid, or entitled to payment, by the Company or an
Affiliate, for the performance of duties, such hours
[page 5]
to be credited to the individual for the Plan Year in which the duties were
performed, the foregoing not to include holiday, vacation, sickness or
disability time; (ii) each hour for which an individual is directly or
indirectly paid, or entitled to payment, by the Company or an Affiliate for
reasons (such as holidays, vacation, sickness or disability) other than the
performance of duties (to be credited in accordance with Labor Department
Regulation Section 2530.200b-2(c) or any successor regulation); (iii) each
hour, for which the individual is not otherwise credited, for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to by
the Company or an Affiliate, such hours to be credited to the individual for
the Plan Year to which the award or agreement pertains rather than the Plan
Year in which the award, agreement or payment is made, and (iv) each hour,
based on the Company's or an Affiliate's standard work week and work day as in
effect from time to time, during which the individual is absent from work on
account of:
(a) a leave of absence granted by the Company or an Affiliate for
sickness or disability, provided the individual returns to work with the Company
or an Affiliate within one week after the expiration of such leave of absence;
and
(b) a leave of absence granted by the Company or an Affiliate for
service in the Armed Forces, provided the individual returns to work with the
Company or an Affiliate, under circumstances in which his rights to return are
<PAGE> - 17 -
protected under the terms of applicable Federal law, within 90 days, either:
(1) after having become entitled to release from active service in the
Armed Forces; or
(2) after release from hospitalization continuing for a period of not
more than one year after discharge from active service in the Armed Forces.
such hours to be credited to the individual for the Plan Year in which the
absence occurred. In determining Hours of Service for the purpose of clause
(ii) above, the provisions of Labor Department Regulation Section 2530.200b-
2(b) or any successor regulation shall be applicable.
2.28 "Investment Date" shall mean the scheduled purchase dates determined
by the Committee, occurring not less frequently than once per calendar quarter.
2.29 "Investment Vehicle" shall mean one or more of the following:
(a) "Equity Funds" which shall be invested in common stock and other
equity securities. Equity funds can include funds generally viewed as
conservative, growth oriented or aggressive.
(b) "Balanced Funds" which shall be invested in a balanced mixture of
equity and fixed income securities. Balanced Funds can include funds generally
viewed as conservative or growth oriented.
(c) "Fixed Funds" which shall be invested in fixed income securities.
Fixed Funds can include funds generally viewed as conservative.
(d) "Cash Funds" shall include money market funds and interest bearing
accounts.
(e) "GIC Funds" which shall be invested in guaranteed investment
contracts (GICs) issued by insurance companies.
[page 6]
(f) Any securities which the Committee may determine to be a
permissible investment, but excluding any securities of the Employer or an
Affiliate thereof, subject to the conditions set forth in Section 7.1 hereof;
provided, that until the Committee otherwise determines, the following shall be
permissible investments: any investment in U.S. Treasury bills, notes and
other obligations; certificates of deposit; and zero coupon instruments.
2.30 "Non-Highly Compensated Participant" shall mean any Participant who
is neither a Highly Compensated Employee nor a Family Member of a Highly
Compensated Employee.
2.31 "Normal Retirement Date" shall mean the date of a Participant's
sixty-fifth (65th) birthday.
2.32 "Participant" shall mean an individual (i) who is an Active
Participant or (ii) is a former Active Participant with an interest under the
Plan.
<PAGE> - 18 -
2.33 "Plan Year" shall mean each twelve-month period ending on December
31; provided, however, that there shall be a short Plan Year for the period from
October 1, 1992 to December 31, 1992.
2.34 "Shares" shall mean shares of common stock of the Company, which are
"qualifying employer securities" within the meaning of Sections 409(l) and
4975(e)(8) of the Code, or any successor sections.
2.35 "Stock Obligation" shall mean indebtedness arising from any extension
of credit to the Plan or the Trust obtained for the purpose of buying Shares.
2.36 "Total Disability" shall mean that disability which qualifies an
Employee to be considered a total and permanently disabled Employee as
determined by the Social Security Administration to be eligible to receive
disability income benefits under Title II of the Social Security Act, as amended
from time to time.
2.37 "Trust" shall mean the trust created by the trust agreement, as
amended from time to time, entered into by the Company and the Trustee for the
purpose of holding the Trust Fund.
2.38 "Trustee" shall mean the person or persons who may at any time be
acting as trustee or trustees of the Trust.
2.39 "Trust Fund" shall mean all funds received by the Trustee from the
Employer or any Participant or as a rollover amount as defined in Section
402(a)(5), 403(a)(4), 408(d)(3) or 409(b)(3)(C) of the Code, pursuant to the
terms hereof, together with all income, profits and increments thereon, and less
any expenses, losses and payments therefrom.
2.40 "Unallocated Stock Account" shall mean the account maintained
pursuant to Section 5.9 hereof.
2.41 "Valuation Date" shall mean the close of business on the last
business day of each month, and such other date or dates determined by the
Committee, in its discretion.
2.42 "Year of Service" shall mean each Plan Year during which the Employee
has completed not less than one thousand (1,000) Hours of Service, including any
such Plan Year prior to the Effective Date. For the short Plan Year which com-
menced October 1, 1992, an individual shall be credited with a Year of Service
upon completion of 1,000 Hours of Service during the 12-month period that began
January 1, 1992 and ended December 31, 1992.
[page 7]
Except when otherwise indicated by the context, any masculine terminology
herein shall also include the feminine, and the definition of any term herein in
the singular shall also include the plural.
ARTICLE III
Administration
3.1 Committee. The Board shall appoint the members of a Committee to be
known as the Administrative Committee, which members shall hold office at the
pleasure of the Board. Said Committee shall consist of not less than three (3)
nor more than eight (8) members, any one or more of whom may, but need not, be
<PAGE> - 19 -
an officer of the Company or any Affiliate. If there is at any time a vacancy
on the Committee for any reason, the Board or Chief Executive Officer of the
Company shall fill such vacancy, but the Committee may act notwithstanding the
existence of vacancies as long as there shall continue to be at least three
members of the Committee. The Secretary or any Assistant Secretary of the
Company shall, upon the initial appointment of the members of the Committee and
from time to time as changes occur in the membership thereof, certify to the
Trustee the name and specimen signatures of the members of the Committee. The
Committee shall select a Chairman from among its members.
3.2 Named Fiduciary. The Committee is hereby designated the Named
Fiduciary of the Plan, within the meaning of Section 402(a) of the Act, and
subject to the provisions hereof, shall have the authority to control and manage
the operation and administration of the Plan.
3.3 Powers of the Committee. The Committee shall have all powers
necessary to determine in its sole discretion all questions concerning the
administration of the Plan, including without limitation questions of
eligibility of Employees, funding policy and the amount of any benefits payable
hereunder. In addition, the Committee shall have full authority to interpret
and apply the provisions hereof, including without limitation authority to
correct any defects or omissions or reconcile any inconsistencies herein, in
such a manner and to such an extent as it shall deem necessary or desirable to
effectuate the Plan. The Committee may make such rules and regulations for the
administration of the Plan and the interpretation and application of the
provisions hereof, as it deems necessary or desirable. Subject to the
provisions of Article XIV hereof, any determination by the Committee within the
scope of its authority and any action taken thereon in good faith shall be
conclusive and binding on all persons.
3.4 Delegation of Duties. The Committee shall have authority in its sole
discretion to designate or appoint, from time to time, in writing (i) persons to
render advice to it with regard to any responsibility it has under the Plan, and
(ii) persons to carry out specified fiduciary responsibilities for the operation
and administration of the Plan, other than any responsibility concerning the
assets of the Plan provided for in the trust agreement creating the Trust. Any
such person shall serve at the pleasure of the Committee and may delegate any of
its powers and duties to any person referred to in clause (ii) above, subject to
the limitation contained therein. Any such delegation of powers and duties
shall be made and acknowledged in writing.
3.5 Administrator. The Committee shall designate an Administrator of the
Plan who may, but need not be, an officer of the Company or any Affiliate. In
addition to carrying out any duties required of the Administrator by applicable
provisions of the Act, the Administrator shall prepare and file, or cause to be
prepared and filed, such reports, descriptions, summaries and statements (which
may consist of copies of regularly issued broker-dealer statements with respect
to the accounts) to Participants and Beneficiaries as may be necessary or
desirable, within the time specified thereof. Any delegation of duties to the
Administrator by the Committee shall be made and acknowledged in writing. The
Administrator shall serve at the pleasure of the Committee and may resign by
delivering written notice to the Committee. If at any time there shall be a
vacancy in the position of the Administrator, the Chairman of the Committee
shall serve as Administrator until said position has been filled as herein
provided.
<PAGE> - 20 -
[page 8]
3.6 Agent for Service. The Administrator shall be the agent for service
of legal process in connection with any claim or proceeding relating to the
Plan.
3.7 Action by Majority. Any action which the Committee is authorized or
required to take may be taken by a majority of the members of the Committee then
holding office. The action of such majority of the members of the Committee,
expressed by a vote at a meeting, or in writing without a meeting, shall
constitute the action of the Committee, and shall have the same effect for all
purpose as if assented to by all the members of the Committee then holding
office.
3.8 Secretary; Action by Single Member. The Committee may from time to
time appoint a Secretary, who may or may not be a member of the Committee and
who shall serve at the pleasure of the Committee and may resign by delivering
written notice to the Committee. The Committee may from time to time authorize
any one or more of its members to execute any document on behalf of the
Committee. The Committee shall certify to the Trustee the name of any such
member authorized to act for it in its relationship with the Trustee and the
extent and duration of such authorization.
3.9 Member's Own Participation. The member of the Committee who is also a
Participant shall not vote on the exercise of any rights or options or any other
matter with respect to his individual rights as a Participant; provided,
however, that this prohibition shall not be construed as preventing such member
from voting on matters which affect all Participants.
3.10 Records. The Committee shall keep such records of its proceedings
and acts as may in its discretion be necessary or desirable for the proper
administration of the Plan. The Committee shall make available to each
Participant or Beneficiary, for examination at its principal office or such
other place as the Committee may in its sole discretion decide is necessary or
desirable to make available all pertinent records to such Participant or
Beneficiary, such of its records as may pertain to such Participant or
Beneficiary, and such Participant or Beneficiary shall have the right to examine
the same during normal business hours. The Company may at any time inspect the
records of the Committee or have the same inspected by an agent or Employee and
may at any time demand an accounting from the Committee.
3.11 Compensation; Agents. Any members of the Committee may be paid such
reasonable compensation for attending meetings of the Committee as may be voted
by the Board in its sole discretion. All expenses properly attributable to the
operations and administration of the Plan, including fees paid to agents,
advisors, counsel, investment managers and other persons designated or appointed
by the Committee to assist it, shall be paid by the Employer.
3.12 Bonding; Liability of Committee. The Committee, or the
Administrator, if so directed by the Committee, shall insure that each Fiduciary
of the Plan, including each member of the Committee, is bonded in accordance
with applicable laws, rules or regulations, including without limitation Section
412 of the Act. The Employer shall indemnify and hold harmless each member of
the Committee, the Administrator, and any other Fiduciary with respect to the
Plan, if he is, or was at the time of the acts or failure to act in question, a
director, officer or Employee of the Employer, from any liability, claim,
demand, suit or action of any type, including without limitation reasonable
<PAGE> - 21 -
attorneys' fees, arising from any action or failure to act, provided that such
persons acted in good faith, in a manner he reasonably believed to be in the
best interests of the Plan and consistent with the provisions of the Plan and,
with respect to any criminal action or proceeding, that he had no reasonable
cause to believe his conduct was unlawful.
3.13 Fiduciary Responsibility. Any Fiduciary with respect to the Plan
shall discharge his duties solely in the interest of the Participants and
Beneficiaries for the exclusive purpose of providing benefits to Participants
and Beneficiaries and defraying reasonable expenses of administering the Plan.
In addition, any Fiduciary with respect to the Plan shall discharge his duties
with the care, skill, prudence
[page 9]
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
any enterprise of a like character with like aims.
ARTICLE IV
Participation and Enrollment
4.1 Service Requirement. Every Employee of the Employer shall be eligible
to participate in the Plan, as of the Entry Date coinciding with or next
following the date one year following the date the Employee first completed an
Hour of Service if he has completed 1,000 Hours of Service within that
consecutive 12-month period, or if he has not completed 1,000 Hours of Service
during that initial 12 consecutive months, the end of the first Plan Year in
which he completes at least 1,000 Hours of Service.
If an individual associated with an Affiliate that has not adopted the Plan
meets the requirements of the preceding paragraph but is not an Employee of the
Employer on the applicable Entry Date, he shall be eligible to participate in
the Plan as of the date he subsequently becomes an Employee of the Employer.
Service with Newhard, Cook & Co. Incorporated shall be counted for purposes
of this Section 4.1. The Committee may also designate any other company
acquired by the Employer, so that service with such company prior to such
acquisition shall be counted for purposes of this Section 4.1.
4.2 Entry. Every Employee on the Effective Date who met the requirement
of Section 4.1 hereof shall be eligible to participate in the Plan as of that
date. Each Employee who is eligible to participate in the Plan shall become an
Active Participant as of the first Entry Date after he becomes eligible. The
Committee shall notify each Employee of his eligibility to participate in the
Plan as of the applicable Entry Date upon meeting the requirement of Section 4.1
hereof.
4.3 Termination of Active Participation. If an Employee who is an Active
Participant in the Plan ceases to be an Employee he shall cease to be an Active
Participant.
4.4 Re-entry After Ceasing to be an Active Participant. If an Active
Participant ceases to be an Employee but thereafter again becomes an Employee,
he shall again become an Active Participant as of the date on which he again
becomes an Employee.
<PAGE> - 22 -
ARTICLE V
Contributions
5.1 Employer Contributions.
(a) The Employer shall contribute to the Plan (for allocation to
Participants' ESOP Accounts) for each Plan Year, within the time prescribed by
law for filing of the income tax return for the Company's fiscal year, including
any extensions thereof, in cash or Shares as determined by the Board, such
amount as shall be determined by the Board; provided, however, that the Employer
shall contribute in cash to the Plan hereunder amounts sufficient to pay, as
they become due, all currently maturing obligations under any Stock Obligation
and all amounts required under any contributions agreement between the Employer
and the Trustee.
(b) The Employer shall contribute to the Plan (for allocation to
Participants' 401(k) Account) for each Plan Year, within the time prescribed by
law for filing of the income tax return
[page 10]
for the Company's fiscal year, including extensions thereof, an amount on behalf
of each Active Participant, as determined by the Board, subject to the
limitations of Section 5.14 hereof, according to one or more of the following
formulas:
(1) Employer Percentage Contribution Formula. The Employer shall
contribute an amount, determined by the Board, which shall be allocated among
the 401(k) Accounts of each Active Participant in proportion to such Active
Participant's Compensation (disregarding Compensation above any amount
determined by the Board). Alternatively, the Board may allocate such
contribution among the 401(k) Accounts of Active Participants in accordance with
a formula which gives weight to the age and/or years of service with the
Employer of Active Participants, in addition to their Compensation, provided
such formula is permitted pursuant to Treasury Regulations issued under Section
401(a)(4) of the Code. Such contributions shall only be allocated to
Participants who were Active Participants as of such date during the Plan Year
as may be specified by the Board.
(2) Employer Alternate Contribution Formula. The Employer shall
contribute to the Plan such amount as may be determined by the Board, and such
amount shall be allocated to the 401(k) Accounts of either (i) Participants who
were Active Participants as of such date during the Plan Year as may be
specified by the Board or (ii) Participants who were Active Participants as of
such date during the Plan Year as may be specified by the Board and were not
Highly Compensated Employees for purposes of Section 401(k) of the Code for the
Plan Year with respect to which such contribution is made. The Board shall
prescribe the method for allocating such contribution, which may be either on a
per capita basis or as a percentage of all or a portion of an Active
Participant's Employee contributions which are collected by payroll deduction.
Under the Employer Percentage Contribution Formula, if elected by the
Board for any Plan Year, contributions will be made on behalf of each Active
Participant eligible to receive such a contribution regardless of whether such
Active Participant elects to make Employee contributions. Under the Employer
Alternate Contribution Formula, if elected by the Board for any Plan Year,
contributions will be made on behalf of each Active Participant eligible to
<PAGE> - 23 -
receive such a contribution regardless of whether such Active Participant elects
to make Employee contributions, but only if the allocation method prescribed by
the Board so provides. The Board may designate any contributions made pursuant
to this Section 5.1(b) to be treated as Employee contributions for purposes of
Articles VI and VIII of the Plan.
5.2 Employee Contributions. Each Active Participant may contribute to the
Plan in any Plan Year such amount as he may determine to be desirable; provided,
however, that such contributions may not exceed $7,000 in a calendar year (as
adjusted at the same time and in the same manner as provided under Section
415(d) of the Code in accordance with Treasury Regulations).
Notwithstanding the above, the amount of each Active Participant's
contribution for any Plan Year which is collected for the Plan by payroll
deductions shall not exceed 15% of such Active Participant's Compensation as the
Committee may from time to time determine. The minimum payroll deduction amount
shall be determined by the Committee but shall in no event be less than $20.00 a
month. Within the permissible limits, each Participant shall determine the
amount of his payroll deduction by written direction to the Committee within 30
days after becoming a Participant. Thereafter, the Active Participant may
change the amount of his payroll deduction contribution quarterly by filing
another written direction with the Committee within 30 days after the Plan's
Entry Dates, or at such other
[page 11]
times permitted by the Committee. Such contributions shall be paid by the
Employer to the Active Participant's 401(k) Account not less frequently than
once every thirty (30) days.
In addition to, or exclusive of, payroll deduction contributions, Active
Participants may make lump-sum contributions from specific payroll periods to
the Plan by written direction to the Committee at time periods as determined by
the Committee and within the time prescribed by law for filing of the income tax
return of the Company's fiscal year, including extensions.
5.3 Actual Deferral Percentage Test.
(a) For this Article V to maintain its status as a qualified cash or
deferred arrangement pursuant to Section 401(k) of the Code, the Actual Deferral
Percentage for Highly Compensated Participants (as defined below) for each Plan
Year must bear a relationship to the Actual Deferral Percentage for all other
eligible employees for such Plan Year which meets one of the following tests:
(1) The Actual Deferral Percentage of the Highly Compensated
Participant group shall not be more than the Actual Deferral Percentage of the
Non-Highly Compensated Participant group multiplied by 1.25, or
(2) The excess of the Actual Deferral Percentage of the Highly
Compensated Participant group over the Actual Deferral Percentage of the Non-
Highly Compensated Participant group shall not be more than two percentage
points. Additionally, the Actual Deferral Percentage of the Highly Compensated
Participant group shall not exceed the Actual Deferral Percentage of the Non-
Highly Compensated Participant group multiplied by 2. The provisions of Section
401(k)(3) of the Code and Treasury Regulations Section 1.401(k)-1(b) are
incorporated herein by reference. In order to prevent the multiple use of the
alternative method described in this paragraph and in Section 401(m)(9)(A) of
<PAGE> - 24 -
the Code, any Highly Compensated Participant eligible to make Employee
contributions pursuant to this Plan or to receive Employer matching
contributions under this Plan or under any other plan maintained by the Employer
or an Affiliate shall have his actual contribution ratio reduced pursuant to
Treasury Regulations Section 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purpose of this Section 5.3, "Actual Deferral Percentage"
for a Plan Year means, with respect to the Highly Compensated Participant group
and Non-Highly Compensated Participant group, the average of the ratios,
(calculated separately for each Active Participant in such group) of:
(1) The Employee contributions and Employer contributions designated as
Employee contributions (if any) allocated to each Account for such Plan Year
(and contributed to the Plan within 12 months following the end of the Plan
Year); to
(2) The Active Participant's 414(s) Compensation for such Plan Year.
The actual deferral ratio for each Active Participant and the Actual
Deferral Percentage for each group shall be calculated to the nearest one-hun-
dredth of one percent. Employee contributions allocated to each Non-Highly
Compensated Employee's Account shall be reduced by excess Employee contributions
to the extent such excess amounts arise under this Plan or any other plan
maintained by the Employer.
[page 12]
(c) For the purposes of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Section 414(q)(6) of the Code because such Active Participant is either
a five-percent owner of the Employer or one of the ten Highly Compensated
Employees paid the greatest Code Section 415 Compensation during the year, the
following rules shall apply:
(1) The combined actual deferral ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be determined by
aggregating Employee contributions, applicable Employer contributions (if any)
and 414(s) Compensation of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit to 414(s)
Compensation, Family Members shall include only the affected Employee's spouse
and any lineal descendants who have not attained age 19 before the close of the
Plan Year. Notwithstanding the foregoing, with respect to Plan Years beginning
prior to January 1, 1990, compliance with the regulations then in effect shall
be deemed to be in compliance with this paragraph.
(2) The Employee contributions, applicable Employer contributions (if
any) and 414(s) Compensation of all Family Members shall be disregarded for
purposes of determining the Actual Deferral Percentage of the Non-Highly
Compensated Participant group except to the extent taken into account in para-
graph (1) above.
(3) If an Active Participant is required to be aggregated as a member
of more than one family group in a plan, all Active Participants who are members
of those family groups that include the Active Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
<PAGE> - 25 -
(d) For the purpose of this Section, a Highly Compensated Participant
and a Non-Highly Compensated Participant shall include any Employee eligible to
make a payroll deduction pursuant to Section 5.2, whether or not such
contribution was made or amended.
(e) For purposes of this Section, if two or more plans of the Employer
(other than an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code), which include cash or deferred arrangements, are considered one plan
for the purposes of Section 401(a)(4) or 410(b) of the Code (other than the
average benefits test under Section 410(b)(2)(A)(ii) of the Code), the cash or
deferred arrangements included in such plans shall be treated as one
arrangement.
(f) For the purposes of this Section, if a Highly Compensated
Participant is an Active Participant under two or more cash or deferred
arrangements of the Employer or an Affiliate (other than a cash or deferred
arrangement which is part of an employee stock ownership plan), all such cash or
deferred arrangements shall be treated as one cash or deferred arrangement for
the purpose of determining the deferral percentage with respect to such Highly
Compensated Participant. However, if the cash or deferred arrangements have
different plan years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year as a single
arrangement.
5.4 Adjustment to Actual Deferral Percentage Tests.
(a) In the event that the initial allocations of the Employee
contributions and Employer contributions designated as Employee contributions
(if any) do not satisfy one of the tests
[page 13]
set forth above, the Committee shall adjust excess contributions pursuant to the
options set forth below:
(1) Within 12 months after the end of the Plan Year, the Employer may
make an additional Employer contribution, designated as an Employee contribution
on behalf of Non-Highly Compensated Participants in an amount sufficient to
satisfy one of the tests set forth in Section 5.3. Such contribution shall be
allocated in the proportion outlined in Section 5.1(b) according to the formula
chosen by the Employer; or
(2) On or before the fifteenth day of the third month following the end
of each Plan Year, the Highly Compensated Participant having the highest actual
deferral ratio shall have his portion of excess Employee contributions
distributed to him until one of the tests set forth above is satisfied, or until
his actual deferral ratio equals the actual deferral ratio of the Highly Compen-
sated Participant having the second highest actual deferral ratio. This process
shall continue until one of the tests set forth above is satisfied. For each
Highly Compensated Participant, the amount of excess contributions is equal to
the Employee contributions and applicable Employer contributions (if any) on
behalf of such Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by multiplying the
Highly Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by his 414(s) Compensation. However, in deter-
mining the amount of excess Employee contributions to be distributed with
respect to an affected Highly Compensated Participant as determined herein, such
<PAGE> - 26 -
amount shall be reduced by any excess Employee contributions previously
distributed to such affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year.
With respect to the distribution of excess Employee contributions, such
distribution:
(A) may be postponed but not later than the close of the succeeding
Plan Year;
(B) shall be made first from unmatched Employee contributions and,
thereafter, simultaneously from Employee contributions which are matched (if
any) and Employer matching contributions (if any) which relate to such Employee
contributions provided, however, that any Employer matching contributions that
are not vested, shall be forfeited in lieu of distribution;
(C) shall be adjusted for income; and
(D) shall be designated by the Employer as a distribution of excess
Employee contributions and income.
Any distribution of less than the entire amount of excess Employee
contributions shall be treated as a pro rata distribution of excess Employee
contributions and income.
(b) If the determination and correction of excess Employee
contributions of a Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules, then the actual deferral ratio
shall be reduced as required herein and the excess Employee contributions for
the family group shall be allocated among the Family Members in proportion to
the Employee contributions and applicable Employer contributions (if any) of
each Family Member that were combined to determine the group
[page 14]
actual deferral ratio. Notwithstanding the foregoing, with respect to Plan
Years beginning prior to January 1, 1990, compliance with the Regulations then
in effect shall be deemed to be in compliance with this paragraph.
5.5 Actual Contribution Percentage Tests.
(a) For this Plan to maintain its qualified status, the Actual
Contribution Percentage for the Highly Compensated Participant group shall not
exceed the greater of:
(1) 125 percent of such percentage of the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage of the Non-Highly
Compensated Participant group, or such percentage of the Non-Highly Compensated
Participant group plus two percentage points. However, to prevent the multiple
use of the alternative method described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant eligible to make Employee
contributions pursuant to Section 5.2 or any other cash or deferred arrangement
maintained by the Employer or an Affiliate and to receive Employer matching
contributions under this Plan or under any other plan maintained by the Employer
or an Affiliate shall have his actual contribution ratio reduced pursuant to
<PAGE> - 27 -
Treasury Regulations Section 1.401(m)-2. The provisions of Section 401(m) of
the Code and Treasury Regulations Sections 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purpose of this Section 5.5, "Actual Contribution
Percentage" for a Plan Year means, with respect to the Highly Compensated
Participant group and Non-Highly Compensated Participant group, the average of
the ratios (calculated separately for each Participant in each group) of:
(1) the Employer matching contributions (if any) made pursuant to
Section 5.1(b) on behalf of each such Active Participant for such Plan Year; to
(2) the Active Participant's 414(s) Compensation for such Plan Year.
The actual contribution ratio must be rounded to the nearest one-hundredth
of one percent.
(c) For purposes of determining the Actual Contribution Percentage and
the amount of excess matching contributions pursuant to Section 5.6, only
Employer matching contributions (excluding Employer matching contributions
forfeited pursuant to Section 3.4(a)(2)) contributed to the Plan prior to the
end of the succeeding Plan Year shall be considered.
(d) For the purpose of determining the actual contribution ratio of a
Highly Compensated Employee who is subject to the Family Member aggregation
rules of Section 414(q)(6) of the Code because such Active Participant is either
a five-percent owner of the Employer or one of the ten Highly Compensated
Employees paid the greatest Code Section 415 Compensation during the year, the
following rules shall apply:
(1) The combined actual contribution ratio for the family group (which
shall be treated as one Highly Compensated Participant) shall be determined by
aggregating Employer matching contributions (if any) made pursuant to Section
5.1(b) and 414(s) Compensation of all eligible Family Members (including
[page 15]
Highly Compensated Participants). However, in applying the $200,000 limit to
414(s) Compensation, Family Members shall include only the affected Employee's
spouse and any lineal descendants who have not attained age 19 before the close
of the Plan Year. Notwithstanding the foregoing, with respect to Plan Years
beginning prior to January 1, 1990, compliance with the regulations then in
effect shall be deemed to be in compliance with this paragraph.
(2) The Employer matching contributions (if any) made pursuant to
Section 5.1(b) and 414(s) Compensation of all Family Members shall be
disregarded for purposes of determining the Actual Contribution Percentage of
the Non-Highly Compensated Participant group except to the extent taken into
account in paragraph (1) above.
(3) If an Active Participant is required to be aggregated as a member
of more than one family group in a plan, all Active Participants who are members
of those family groups that include the Active Participant are aggregated as one
family group in accordance with paragraphs (1) and (2) above.
(e) For purposes of this Section, if two or more plans of the Employer
(other than an employee stock ownership plan as defined in Section 4975(e)(7) of
<PAGE> - 28 -
the Code) to which matching contributions or elective deferrals are made are
treated as one plan for purposes of Section 401(a)(4) or 410(b) of the Code
(other than the average benefits test under Section 410(b)(2)(A)(ii) of the
Code), such plans shall be treated as one plan for purposes of this Section 5.5
In addition, two or more plans of the Employer to which matching ccondributions
or elective deferrals are made may be considered as a single plan for purposes
of this Section. In such a case, the aggregated plans must satisfy Code
Sections 401(a)(4) and 410(b) as though such aggregated plans were a single
plan. Notwithstanding the above, contributions to an employee stock ownership
plan as defined in Code Section 4975(e)(7) shall not be aggregated with this
Plan.
(f) If a Highly Compensated Participant participates in two or more
plans (other than an employee stock ownership plan) which are maintained by the
Employer or an affiliate to which matching contributions or elective deferrals
are made, all such contributions on behalf of such Highly Compensated
Participant shall be aggregated for purposes of this Section 5.5.
(g) For purposes of Sections 5.5(a) and 5.6, the terms "Highly
Compensated Participant" and "Non-Highly Compensated Participant" shall include
any Employee eligible to have Employer matching contributions pursuant to
Section 5.1(b) (whether or not a deferral election was made or suspended
pursuant to Sections 5.2 and 8.2) allocated to his Account for the Plan Year.
5.6 Adjustment to Actual Contribution Percentage Tests.
(a) In the event that the Actual Contribution Percentage for the Highly
Compensated Participant group exceeds the Actual Contribution Percentage for the
Non-Highly Compensated Participant group pursuant to Section 5.5(a), the
Committee (on or before the fifteenth day of the third month following the end
of the Plan Year, but in no event later than the close of the following Plan
Year) shall direct the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio, his vested portion of
excess matching contributions (and income allocable to such contributions) and,
if forfeitable, forfeit such non-vested Employer matching contributions
[page 16]
(and income allocable to such forfeitures) until either one of the tests set
forth in Section 5.5(a) is satisfied, or until his actual contribution ratio
equals the actual contribution ratio of the Highly Compensated Participant
having the second highest actual contribution ratio. This process shall
continue until one of the tests set forth in Section 5.5(a) is satisfied. The
distribution of excess matching contributions shall be made in the following
order:
(1) Employer matching contributions distributed pursuant to Section
5.4(a);
(2) Remaining Employer matching contributions.
(b) Any distribution of less than the entire amount of excess matching
contributions and income shall be treated as a pro rata distribution of excess
matching contributions and income. Distribution of excess matching
contributions shall be designated by the Employer as a distribution of excess
matching contributions and income.
<PAGE> - 29 -
(c) Excess matching contributions including forfeited matching
contributions shall be treated as Employer contributions for purposes of Code
Sections 404 and 415 even if distributed from the Plan.
(d) For each Highly Compensated Participant, the amount of excess
matching contributions is equal to the total Employer matching contributions
made pursuant to Section 5.1(b) minus the amount determined by multiplying the
Highly Compensated Participant's actual contribution ratio (determined after
application of this paragraph) by his 414(s) Compensation. In no case shall the
amount of excess matching contributions with respect to any Highly Compensated
Participant exceed the amount of Employer matching contributions made pursuant
to Section 5.1(b) on behalf of such Highly Compensated Participant for such Plan
Year.
(e) The determination of the amount of excess matching contributions
with respect to any Plan Year shall be made after first determining the excess
contributions, if any, to be treated as employee contributions due to
recharacterization for the plan year of any other qualified cash or deferred
arrangement (as defined in Code Section 401(k)) maintained by the Employer that
ends with or within the Plan Year of this Plan.
(f) If the determination and correction of excess matching
contributions of a Highly Compensated Participant whose actual contribution
ratio is determined under the family aggregation rules, then the actual
contribution ratio shall be reduced and the excess matching contributions for
the family group shall be allocated among the Family Members in proportion to
the sum of Employer matching contributions made pursuant to Section 5.1(b) of
each Family Member that were combined to determine the group actual contribution
ratio. Notwithstanding the foregoing, with respect to Plan Years beginning
prior to January 1, 1990, compliance with the regulations then in effect shall
be deemed to be in compliance with this paragraph.
5.7 Crediting of 401(k) Account Contributions to Participants. The
Employer contributions identified in Section 5.1(b) above and the Employee
contributions identified in Section 5.2 above for each Plan Year shall be
credited as of the date of receipt by the Trust Fund to the 401(k) Accounts of
Participants on whose behalf or by whom they were made.
5.8 Allocations of ESOP Contributions. Subject to the limitations of
Section 5.14, as of the last day of a Plan Year, the sum of (a) the Shares
released from the Unallocated Stock Account for that year pursuant to Section
5.9 which have not been allocated pursuant to Section 5.10, plus (b) any
Employer
[page 17]
contributions under Section 5.1(a) for that year not applied against Stock
Obligations or allocated pursuant to Section 5.10, shall be allocated among the
ESOP Accounts of the Participants on the basis of the percentage that each
Participant's ESOP Compensation during all or that part of the Plan Year in
which he was a Participant is of the total ESOP Compensation of all Participants
for all or that portion of the Plan Year in which they were Participants.
Notwithstanding the foregoing, no allocation shall be made pursuant to this
Section 5.8 to the ESOP Account of a Participant who was not a Participant on
the last day of the Plan Year; provided that a Participant who retires, incurs a
Total Disability or dies prior to the end of a Plan Year shall be included in
the allocation made pursuant to this Section 5.8.
<PAGE> - 30 -
5.9 Release of Shares for Allocation. An Unallocated Stock Account shall
be maintained in which the Plan's holdings of Shares which have been purchased
on credit, whether or not the Shares are pledged as collateral, shall be
segregated until payments on the corresponding Stock Obligations permit the
release of the Shares for allocation to Participants in accordance with this
Section 5.9. Any dividends with respect to such segregated Shares which are
paid by the Company in the form of additional Shares shall also be segregated in
the Unallocated Stock Account and thereafter treated in the same manner as the
underlying segregated Shares. For each Plan Year for which Employer
contributions or earnings on contributions are applied to satisfy a portion of a
Stock Obligation, a certain number of Shares held in the Unallocated Stock
Account shall be released for allocation among the Participants. The number of
Shares released shall bear the same ratio to the number of Shares attributable
to the Stock Obligation which are then in the Unallocated Stock Account (prior
to the release) as (a) the principal and interest payments made on the Stock
Obligation for the Plan Year bears to (b) the payments described in clause (a)
plus the total remaining principal and interest payments required (or projected
to be required on the basis of the interest rate in effect at the end of the
Plan Year) to satisfy the Stock Obligation. For this purpose, each Stock
Obligation, the Shares purchased in connection with it, and any stock dividends
on such Shares, shall be considered separately. Notwithstanding the foregoing,
if a Stock Obligation provides for equal annual principal payments, and has a
term not in excess of ten years, the number of Shares to be released may be
determined solely with reference to principal payments made for a Plan Year. In
addition, if the Stock Obligation is not made by or guaranteed by a disqualified
person (as defined in Section 4975(e)(2) of the Code), the number of Shares to
be released shall be determined in accordance with the terms of any pledge
agreement entered into in connection with the Stock Obligation.
5.10 Allocation of Dividends. Any cash dividends received on Shares
allocated to Participants' ESOP Accounts shall, at the discretion of the Board,
be used to satisfy Stock Obligations or shall be allocated to the Participants'
respective ESOP Accounts. If cash dividends received on Shares allocated to
Participants' ESOP Accounts are used to satisfy Stock Obligations in a Plan
Year, then Shares released from the Unallocated Stock Account pursuant to
Section 5.9 for such Plan Year shall be allocated to such Participants' ESOP
Accounts such that the fair market value of the Shares allocated to each such
Account equals the cash dividends received on Shares allocated to such Account
used to satisfy Stock Obligations. In the event that the fair market value of
all Shares released from the Unallocated Stock Account is less than the
aggregate amount of cash dividends on Shares allocated to Participant's ESOP
Accounts for a Plan Year used to satisfy Stock Obligations, then the Employer
shall contribute an amount equal to the difference which shall be allocated
among the ESOP Accounts of Participants so that the sum of the fair market value
of shares released from the Unallocated Stock Account and such Employer
contributions allocated to each Participant's ESOP Account equals the cash
dividends on Shares allocated to such Participant's ESOP Account used to satisfy
Stock Obligations. Any dividends in the form of additional Shares received on
Shares allocated to Participants' ESOP Accounts shall be allocated to the same
ESOP Accounts. Any cash dividends received on Shares held in the Unallocated
Stock Account which are not used to satisfy Stock Obligations shall be included
in the net income (or loss) of the Trust for the Plan Year. Notwithstanding the
foregoing, any cash dividends received on Shares which are distributed to
Participants pursuant to Section 5.11 shall not be allocated to their accounts.
<PAGE> - 31 -
[page 18]
5.11 Pass-Through of Dividends. Any cash dividends received by the Trust
on Shares allocated to Participants' ESOP Accounts shall be paid in cash to such
Participants, rather than being allocated to Participants' ESOP Accounts
pursuant to Section 5.10, not later than 90 days after the close of the Plan
Year in which such dividends are paid, if the Board so directs the Trustee.
5.12 Rollovers and Transfers. An Employee may, with the consent of the
Committee, which shall be granted or withheld in a nondiscriminatory manner,
roll over to the Employee's 401(k) Account within 60 days of his receipt
thereof, all or any part of the amount distributed to him in cash or in kind
within one taxable year of the Employee as a rollover amount, as defined in
Section 402(a)(5), 403(a)(4), 408(d)(3) or 409(b)(3)(C) of the Code, or from a
conduit individual retirement account under Sections 402 and 408 of the Code, to
the extent permitted by the Code; provided, however, that no such rollover
amount may include any amounts constituting the Employee's contributions. The
Committee may require such information or documentation with respect to any such
rollover contribution hereunder as it deems necessary or desirable. Any
expenses related to such rollover account shall be allocated to such 401(k)
Account.
Amounts may be transferred by the Employer from other tax qualified plans
under Section 401(a) of the Code maintained by the Employer provided that the
trust from which such funds are transferred permits the transfer to be made and
the transfer will not jeopardize the tax exempt status of the Plan or create
adverse tax consequences for the Employer. The amounts transferred shall be
placed in the Participant's 401(k) Account. This Plan shall not accept any
direct or indirect transfers (as that term is defined and interpreted under Code
Section 401(a)(11) and the regulations thereunder) from a defined benefit plan,
money purchase plan (including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life annuity form of
payment to the Participant. Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it will not
result in the violation of Code Section 411(d)(6).
5.13 Allocation of Forfeitures. As of the end of each Plan Year, the
Administrator shall determine the value of forfeitures, pursuant to Section 10.6
hereof, during the Plan Year then ending. The Administrator shall use the
portion of such forfeitures attributable to Employer contributions pursuant to
Section 5.1(b) and earnings thereon to reduce the Employer contribution
calculated pursuant to Section 5.1(b) for the Plan Year in which such
forfeitures occur. The Administrator shall allocate the portion of such
forfeitures attributable to amounts held in Participants' ESOP Accounts among
the ESOP Accounts of Active Participants in proportion to each Active
Participant's ESOP Compensation for such Plan Year.
5.14 Limitation. Anything to the contrary herein notwithstanding, in no
event shall the sum of annual additions to an Active Participant's Account in
any Plan Year attributable to (1) Employer contributions (including
contributions made by the Employer pursuant to Section 401(k) of the Code) and
forfeitures and (2) Employee contributions, when combined with any annual
additions to such Active Participant's account under any other defined
contribution plan maintained by the Employer, be greater than the lesser of (1)
$30,000 (which amount shall be subject to an annual cost of living adjustment as
provided by Treasury Regulations in effect from time to time under Section 415
of the Code), or (2) twenty-five percent (25%) of all the Active Participant's
<PAGE> - 32 -
Compensation from the Employer. For any Plan Year in which no more than one-
third (1/3) of the Employer contributions are allocated to Participants who are
highly compensated employees within the meaning of Section 414(q) of the Code,
for purposes of this Section 5.14, "Annual Additions" shall not include
forfeitures of Shares acquired with the proceeds of a Stock Obligation and
contributions that are deductible under Section 404(a)(9)(B) of the Code and are
charged against the Participant's ESOP Account. For purposes of this Section
5.14, Employer contributions used to repay principal and interest on a Stock
Obligation shall be treated as a contribution of Shares to the Plan. Any excess
amount hereunder (i) to the extent of Employee contributions in such Plan Year
pursuant to Section 5.2 shall be returned to such Active Participant; and (ii)
to the extent of
[page 19]
Employer contributions pursuant to Section 5.1 shall be applied to reduce any
further Employer contributions under this Plan.
Amounts allocated to an individual medical account, as defined in Section
415(l)(1) of the Code, which is part of a defined benefit plan maintained by the
Employer, are treated as annual additions to a defined contribution plan. Also,
amounts derived from contributions paid or accrued in taxable years ending after
such date, which are attributable to post- retirement medical benefits allocated
to the separate account of a key employee, as defined in Section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined in Section 419(e) of the
Code, maintained by the Employer, are treated as annual additions to a defined
contribution plan.
ARTICLE VI
Vesting
6.1 Vesting. An Active Participant shall have a vested right to any
Employer contributions and earnings thereon, in accordance with the following
schedule:
Years of Service Non-forfeitable Percentage
1 10%
2 25%
3 40%
4 55%
5 70%
6 85%
7 or more 100%
(b) Notwithstanding the foregoing, the following contributions shall
at all times be fully vested and non-forfeitable:
(1) All Employee contributions made by a Participant;
(2) All amounts transferred to the Trust Fund representing a
Participant's interest in The Advest Group, Inc. Employees' Retirement Plan;
(3) All amounts transferred to the Trust Fund representing a
Participant's interest in The Advest Group, Inc. Incentive Savings Plan; and
<PAGE> - 33 -
(4) All Employer contributions made on behalf of an Active Participant
who has attained his Normal Retirement Date, or in the event of his Total
Disability or death.
ARTICLE VII
Investment Elections
7.1 Investment of Contributions. Each Participant shall elect with
respect to amounts held in his 401(k) Account to have such funds invested in any
one or more of the Investment Vehicles. Each Participant shall make such
election by filing an investment selection form with the Committee upon becoming
a Participant. Such investment selection for contributions may be changed
effective as of any Investment Date, provided that a properly completed
investment selection form is received by the
[page 20]
Committee not less than 10 days prior to such Investment Date or otherwise as
permitted by the Committee in a nondiscriminatory manner.
In the event that a Participant wishes to liquidate his investment in any
Investment Vehicle and reinvest in another, he must so indicate on a properly
completed investment selection form or otherwise as permitted by the Committee
in a nondiscriminatory manner. Such changed investment selection will be
effective as of any Investment Date, provided that the properly completed
investment selection form is received by the Committee not less than 10 days
prior to such Investment Date or otherwise as permitted by the Committee in a
nondiscriminatory manner. The liquidation of the previous Investment Vehicle
will occur within 5 business days of receipt of the properly completed
investment selection form by the Committee.
Investments in the Investment Vehicles described in Section 2.28(f) hereof
shall be subject to the following conditions:
(a) All purchases and sales of securities must be executed by the
Company as broker or must be principal transactions between the Plan and the
Company, to the extent permitted by the Act, the Code and other applicable laws;
(b) If brokerage commissions are charged by the Company, such
commissions will be charged by the Company to the Account for which a securities
transaction is executed, and such charges will comply with the recapture
provisions of Department of Labor Prohibited Transaction Class Exemption 86-128
which permits the Company to execute securities transactions for the Plan
provided that it credits to the Plan all charges relating to effecting or
executing the securities transactions, less reasonable and necessary expenses,
including reasonable and direct expenses (such as overhead costs) properly
allocated to the performance of these transactions under generally accepted
accounting principles, and further provided that the notice and recordkeeping
requirements of PTCE 86-128 are complied with; and
(c) Investments shall be made in accordance with such rules as may be
established by the Committee from time to time.
Pending the investment of contributions in, or the shifting of investments
among, the Investment Vehicles, funds shall be invested in an Advest Bank
Special Money Market Deposit Account for each Participant.
<PAGE> - 34 -
ARTICLE VIII
Withdrawals
8.1 Hardship Withdrawals. The Committee, at the election of an Active
Participant, shall direct the Trustee to distribute to any Active Participant in
any one Plan Year all or part of the vested portion of his 401(k) Account
(excluding post-1988 earnings on Employee contributions to the Plan and to The
Advest Group, Inc. Incentive Savings Plan that have been transferred to the
Plan). For purposes of this Section 8.1, a withdrawal shall be authorized only
if the distribution is on account of:
(a) Expenses for medical care described in Code Section 213(d)
previously incurred by the Active Participant, his spouse, or any of his
dependents (as defined in Code Section 152) or necessary for these persons to
obtain the medical care described in Section 213(d);
(b) Costs directly related to the purchase of a principal residence for
the Active Participant (excluding mortgage payments);
[page 21]
(c) Funeral expenses for a member of the Active Participant's Family;
(d) Payment of tuition and related educational fees for the next 12
months of post-secondary education for the Active Participant, his spouse,
children or dependents; or
(e) The need to prevent the eviction of the Active Participant from his
principal residence or foreclosure on the mortgage of the Active Participant's
principal residence.
No distribution shall be made pursuant to this Section unless the
Committee, based upon the Active Participant's representation and such other
facts as are known to the Committee, determines that all of all of the following
conditions are satisfied:
(a) The distribution is not in excess of the amount of the immediate
and heavy financial need of the Active Participant; and
(b) The Active Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available under all
plans maintained by the Employer, including the Plan; provided, however, that
the Active Participant will not be required to obtain a nontaxable loan if the
loan would disqualify the Active Participant from obtaining other necessary
financing.
8.2 If an Active Participant receives a hardship withdrawal pursuant to
Section 8.1, such Active Participant's Employee contributions will be suspended
until January 1 of the second calendar year after receipt of the hardship
withdrawal.
Application for withdrawal shall be made on such forms as the Committee
prescribes and shall contain the information required by such forms, including
the Investment Vehicle(s) from which the withdrawal is to be made. Only one
such withdrawal shall be permitted in any six month period.
<PAGE> - 35 -
The withdrawal shall be paid to the Participant within 30 days after the
Active Participant's application form is approved by the Committee. The Active
Participant's 401(k) Account shall be charged accordingly as of such date.
No make-up contributions will be permitted.
ARTICLE IX
Loans
9.1 Loans. The Committee may, upon receipt of a completed loan
application form by an Active Participant or a Participant who is a "party in
interest" as defined in Section 3(14) of the Act, direct the Trustee to make a
loan to such Participant from the Investment Vehicle(s) credited to the 401(k)
Account of such Participant as the Participant directs. Effective January 1,
1993, Employees who are not Active Participants shall also be eligible to
request loans, and all references to Participants in this Article IX shall
include such Employees. Each Participant may have no more than two (2) loans
outstanding at one time, and no loan may be for less than $500. No Participant
may receive more than two (2) loans in any twelve-month period. In no event
shall the total of any such loan or loans to any one Participant (when
aggregated with other loans under this Plan or any other qualified plan of the
Employer) exceed the lesser of:
(a) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans from the Plan to the Participant during the one year period
ending on the day before the date
[page 22]
on which such loan is made, over the outstanding balance of loans from the Plan
to the Participant on the date on which such loan was made, or
(b) Fifty percent (50%) of the present value of the nonforfeitable
Accrued Benefit of the Employee attributable to his 401(k) Account.
The balance of the Participant's 401(k) Account will be determined as of
the date the application is approved by the Committee.
Any such loan shall be repaid by the Participant in monthly payments of not
less than $20 each over a period not to exceed five (5) years and shall be
immediately due and payable in full upon death, disability or separation from
service. Any such loan which is to be used to acquire, construct, reconstruct,
or substantially rehabilitate any dwelling unit which within a reasonable period
of time to be used as a principal residence of the Participant or a relative of
the Participant may exceed five (5) years, but not more than ten (10) years.
9.2 Rate of Interest. Each loan shall bear a reasonable rate of interest,
determined by the Committee. The Committee, in determining the interest rate,
shall take into consideration the rates of interest currently being charged by
lenders. Loans may bear different interest rates, if in the Committee's
opinion, the difference is justified by different terms for repayment or changes
in economic conditions. The rate of interest need not be fixed for the term of
the loan. In no event shall the interest rate exceed the maximum legal rate
that may be charged to individuals for loans of this nature. All interest and
principal payments shall be credited to the 401(k) Account of the Participant to
whom the loan is made.
<PAGE> - 36 -
Every Participant with an outstanding loan from the Plan shall receive a
clear statement (which may consist of copies of the periodic statements issued
with respect to the Participant's Account) of the charges involved.
9.3 Committee Approval. The Committee shall approve loan applications and
determine rate of interest in a uniform and nondiscriminatory manner. Loans
shall be available to all such Participants on a reasonably equivalent basis as
determined by the Committee, and, in approving such loans, the Committee shall
not discriminate in favor of Highly Compensated Employees or officers of the
Company as to the amount of such loans in proportion to the Participant's 401(k)
Account or the rate of interest. All loans shall comply with the requirements
of Section 408(b)(1) of ERISA as amended.
9.4 Loan Collateral. Each loan shall be made against the collateral of
the assignment of fifty percent (50%) of the Participant's entire right, title
and interest in and to his 401(k) Account. In addition to the assignment of the
Participant's 401(k) Account, the Committee may, in its discretion, require such
additional collateral as it may deem necessary from time to time to adequately
secure such loan. In the event of a default by a Participant in the repayment
of any loan provided for hereunder and the Participant has not supplied other
satisfactory collateral, the Participant's 401(k) Account under this Plan shall
be charged with the full unpaid balance of the loan, together with any accrued
but unpaid interest thereon (up to an amount equal to the collateral), at the
time of the earlier of the Participant's termination of service with the
Employer, his retirement or his disability.
For purposes of this Section, a loan made to a Participant shall not be
treated as an assignment or alienation of any benefit due to the fact that the
loan will be secured by the Participant's 401(k) Account and will be exempt from
the tax imposed on prohibited transactions according to Section 4975(d)(1) of
the Code.
No distribution under the Plan, other than withdrawals made pursuant to
Article VIII, shall be made to any Participant or to the Beneficiary of any such
Participant unless and until all unpaid loans, including accrued interest
hereto, have been liquidated. The Committee shall have the right to apply to
[page 23]
the repayment of any loan and the accrued interest thereon the amount of any
distribution from the Trust Fund to which the Participant or his Beneficiary
becomes entitled to satisfy the liquidation of such loan.
ARTICLE X
Payment of Benefits
10.1 Payment Options. The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to the Participant or his
Beneficiary the Participant's vested Accrued Benefit under the Plan in one or
more of the following methods:
(a) One lump-sum payment in cash or in kind to the extent the
Participant so elects; or
(b) For an amount in a Participant's Account equal to the balance of
such Participant's Accounts under The Advest Group, Inc. Incentive Savings Plan
and The Advest Group, Inc. Employees' Retirement Plan on September 30, 1989,
<PAGE> - 37 -
payments over a period certain in monthly, quarterly, semiannual, or annual
installments, in cash or in kind to the extent the Participant so elects, not
extending beyond the Participant's life expectancy (or the life expectancy of
the Participant and his designated Beneficiary).
10.2 Commencement of Benefit Payments. The payment of benefits under the
Plan shall be made or begin on or after the date a Participant terminates his
service with the Employer and not later than the 120th day after the Participant
terminates his service with the Employer (or, in the event of a Participant's
Total Disability, within 120 days after the determination of Total Disability).
In addition, payment of a Participant's benefits may be made or begin, at the
Participant's election, at any time on or after January 1 of the calendar year
in which the Participant attains age 70-1/2. Notwithstanding the foregoing,
payment of a Participant's benefits shall be made or begin not later than April
1 of the calendar year following the calendar year in which the Participant
attains age 70-1/2. However, any Participant who: (a) attained age 70-1/2
prior to January 1, 1988; (b) was not a five percent owner of the Employer (as
defined in Section 416(i)(l) of the Code) with respect to the Plan Year ending
with or within the calendar year in which the Participant attained age 66-1/2 or
any subsequent Plan Year; and (c) is employed by the Employer on April 1 of the
calendar year following the calendar year in which the Participant attains age
70-1/2, may, at the Participant's election, postpone the payment of his benefits
to a date that is not later than April 1 of the calendar year following the
calendar year in which the Participant retires.
10.3 Form of Payment to Participants. A Participant's benefits held in a
Participant's ESOP Account shall generally be paid in Shares. In connection
with a distribution, the Administrator shall cause the portion of the
Participant's interest in his ESOP Account not held in Shares to be used to
purchase Shares on the stock exchange, if any, on which the Shares are primarily
traded, or, if Shares are not primarily traded on a stock exchange, on the over-
the-counter market, or, if neither of the above is applicable, at their current
fair market value as determined pursuant to Section 10.7. Any fractional shares
credited to a Participant's Accounts shall be converted into cash at the Shares'
current fair market value as determined pursuant to Section 10.7.
Notwithstanding the foregoing, a Participant may elect pursuant to rules adopted
by the Committee to receive benefits held in his ESOP Account in the form of
cash. In addition, if a Participant has less than 100 Shares credited to his
ESOP Account, his benefits attributable to his ESOP Account shall be paid in the
form of cash, unless the Participant elects to receive benefits in the form of
Shares. If a Participant is to receive a distribution in cash, the Shares
credited to the Participant's ESOP Account shall be sold on the stock exchange,
if any, on which the Shares are primarily traded, or, if Shares are not
primarily traded on a stock exchange, on the over-the-counter market, or, if
neither of the above is applicable, shall be converted into cash at their
current fair market value as determined pursuant to Section 10.7, and the
Participant shall be paid the proceeds.
[page 24]
10.4 Put Option.
(a) In the event that Shares are distributed pursuant to this Article
X, such Shares shall be subject to a put option, if, when distributed, such
Shares are (i) not listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934 or quoted on a system sponsored
by a national securities association registered under section 15A(b) of the
Securities Exchange Act ("Publicly Traded") or (ii) subject to a restriction
<PAGE> - 38 -
("Trading Restriction") under any Federal or state securities law or any
regulation thereunder or under an agreement which makes such Shares not as
freely tradable as Shares not subject to such restriction.
(b) The put option shall be exercisable by the distributee of the
Shares.
(c) The put option shall permit the shares to be put to the Company at
their fair market value as determined pursuant to Section 10.7.
(d) The put option shall be exercisable at any time during the sixty
(60) day period commencing on the date of distribution of the Shares. If the
distributee does not exercise the put option within such sixty (60) day period,
the option will temporarily lapse. After the close of the Company's taxable
year in which such temporary lapse occurs and following a determination of the
fair market value of the Shares as of the end of that taxable year, the Company
shall notify each distributee who did not exercise the initial put option in the
preceding year of the fair market value of the Shares. Each such distributee
shall then have the right to exercise the put option at any time during the
sixty (60) day period following such notice. If the distributee does not then
exercise this put option, the shares will cease to be subject to any put option
(e) Payment upon exercise of the put option shall be made or commence
no later than thirty (30) days after exercise and, in the discretion of the
Company, shall be in a lump sum or in substantially equal periodic installments
(not less frequently than annually) which shall extend over a period not to
exceed five (5) years from the date of exercise, with interest at a reasonable
rate on the unpaid balance; provided, however, that if the Shares with respect
to which the put option is exercised were not part of a distribution of the
entire Accrued Benefit of the Participant attributable to the Participant's ESOP
Account within one taxable year of the recipient, payment must be made in a lump
sum.
(f) If payment upon exercise of the put option is to be made by the
Company in installments, the Company shall deliver to the distributee its
promissory note which provides to the distributee the right to require full
payment if the Company defaults in the payment of a scheduled installment. The
Company shall also deliver to the distributee adequate security for the
outstanding amount of the promissory note.
10.5 Protections and Rights. Except as provided in Section 10.4 or as
otherwise required by law, no Shares acquired with the proceeds of a Stock
Obligation may be subject to a put, call or other option, or buy-sell or similar
arrangements, while held by or when distributed from the Plan.
10.6 Protections and Rights Nonterminable. The provisions of Sections
10.4 and 10.5 are nonterminable, and shall continue notwithstanding the
repayment of any Stock Obligation the proceeds of which were used to acquire
Shares and notwithstanding the fact that the Plan ceases to be an employee stock
ownership plan.
10.7 Fair Market Value. The fair market value of Shares on a specified
date shall mean the closing price for a Share on the stock exchange, if any, on
which the Shares are primarily traded, but
<PAGE> - 39 -
[page 25]
if no Shares were traded on such date, then on the last previous date on which a
Share was so traded, or, if Shares are not primarily traded on a stock exchange,
the average of the high and low sales prices at which one Share is traded on the
over-the-counter market, as reported on the National Association of Securities
Dealers Automated Quotation System, or, if none of the above is applicable, the
value of a Share as established no less frequently than annually by an
independent appraiser that does not otherwise provide service to the Company and
that meets requirements similar to those contained in Treasury regulations under
Section 170(a)(i) of the Code.
10.8 Special Distribution and Payment Requirements. Notwithstanding any
other provisions of the Plan, other than such provisions as require the consent
of the Participant to a distribution with a present value in excess of $3,500, a
Participant may elect to have the portion of the Participant's ESOP Account
attributable to Shares, distributed as follows:
(a) If the Participant separates from service by reasons of retirement,
death, or Total Disability, the distribution of such portion of the
Participant's ESOP Account will be made not later than one year after the close
of the Plan Year in which such event occurs.
(b) If the Participant separates from service for any reason other than
those enumerated in paragraph (a) above and is not reemployed by the Employer at
the end of the fifth Plan Year following the Plan Year of such separation from
service, distribution of such portion of the Participant's ESOP Account will
begin not later than one year after the close of the fifth Plan Year following
the Plan Year in which the participant separated from service.
(c) If the Participant separates from service for a reason other than
those described in paragraph (a) above and is employed by the Employer as of the
last day of the fifth Plan Year following the Plan Year of such separation from
service, distribution to the Participant, prior to any subsequent separation
from service, shall be in accordance with terms of the Plan other than this
Section 10.8.
For purposes of this Section 10.8, Shares shall not include any Shares acquired
with the proceeds of a Stock Obligation until the close of the Plan Year in
which such Stock Obligation is repaid in full.
10.9 Special Distributions to Qualified Participants.
(a) Definitions. For the purposes of this Section 10.9, the following
terms shall have the following meanings:
(i) "Qualified participant" shall mean a Participant who has attained
age 55 and who has completed at least 10 years of participation in the Plan.
(ii) "Qualified Election Period" shall mean the six Plan Year period
beginning with the Plan Year in which the Participant first becomes a Qualified
Participant.
(b) Election by Qualified Participant. Each Qualified Participant
shall be permitted to direct the Plan to distribute up to twenty-five percent
(25%) of the value of the Participant's ESOP Account balance as of the last day
of a Plan Year attributable to Shares (to the extent such portion exceeds the
amount to which a prior election or elections under this subsection (b) applies)
by written notice delivered to the Committee within 90 days after the last day
<PAGE> - 40 -
of each Plan Year during the Participant's Qualified Election Period. Within 90
days after the close of the last Plan Year in the Participant's Qualified
Election Period, a Qualified Participant may direct the Plan to distribute up to
fifty percent (50%) of the value of such ESOP Account balance (to the extent
such portion exceeds
[page 26]
the amount to which a prior election or elections under this subsection (b)
applies). Such distribution shall be made by the Plan within 90 days after the
last day of the period during which the election can be made. Such distribution
shall be subject to the put option provisions of Section 10.4 hereof. This
Section 10.9 shall apply notwithstanding any other provision of the Plan other
than such provisions as require the consent of the Participant to a distribution
in excess of $3,500. If the Participant does not consent, such amount shall be
retained in the Plan.
10.10 Change of Payment Method. If benefits are being paid to a
Participant or to a Beneficiary in installments, the Participant (or the
Beneficiary, if the Participant is deceased) may, as of the end of any Plan
Year, direct that the amount then credited to the Account of such Participant be
paid in a lump sum.
10.11 Consent to Distributions. Notwithstanding anything to the contrary
contained in this Plan, if the value of a Participant's Account exceeds $3,500,
no distribution of such Account shall be made prior to the earlier of such
Participant's attainment of age 65 or such Participant's death unless such
Participant shall consent in writing to such distribution.
10.12 Direct Transfers. If a Participant (or Beneficiary) is to be a
recipient of an eligible rollover distribution (as defined in Section
402(f)(2)(A) of the Code) from the Plan on or after January 1, 1993 and elects
to have such distribution paid directly to an eligible retirement plan and
specifies the eligible retirement plan to which such distribution is to be paid
(in such form and at such time as the Committee may prescribe), then such
distribution shall be made in the form of a direct trustee-to-trustee transfer
to the eligible retirement plan so specified. The above provision shall apply
(a) only to the extent that the eligible rollover distribution would be
includable in gross income if not transferred as provided above (determined
without regard to Sections 402(c) and 403(a)(4) of the Code) and (b) only to the
extent required by the Code. For purposes of this Section 10.12, "eligible
retirement plan" shall have the meaning set forth in Section 402(c)(8)(b) of the
Code, except that a qualified trust shall be considered an eligible retirement
plan only if it is a defined contribution plan, the terms of which permit the
acceptance of rollover distributions.
10.13 Forfeitures. Any portion of the Account of a Participant who incurs
five consecutive 1-Year Breaks in Service other than by reason of death,
retirement or Total Disability, which is not vested at the time of such 1-Year
Breaks in Service, shall be forfeited and allocated pursuant to Section 5.13.
In addition, if a Participant who terminates employment other than by reason of
death, retirement or Total Disability receives a lump sum distribution of the
entire vested portion of his Account no later than the close of the second Plan
Year following the Plan Year in which termination of employment occurs, and
before incurring five consecutive 1-Year Breaks in Service, he shall forfeit the
unvested portion of his Account if either: (1) the amount of the distribution
from his Account is not in excess of $3,500 (or such greater amount that may be
established by Treasury Regulations under Section 411(a)(7)(B) of the Code), or
<PAGE> - 41 -
(2) the Participant requests the lump sum distribution. Any amount forfeited
pursuant to the preceding sentence shall be restored to the Account of the
Participant if he returns to work with the Employer before incurring five
consecutive 1-Year Breaks in Service and repays the entire amount of the
distribution before the fifth anniversary of his date of reemployment. The
amount restored shall be the exact amount forfeited without adjustment for gains
or losses incurred subsequent to the distribution. If restoration is no longer
permissible under the foregoing rules, the forfeited amounts shall be allocated
pursuant to Section 5.13.
[page 27]
ARTICLE XI
Death Benefits
11.1 Distribution Upon Death. In the event a Participant ceases to be an
Employee through the death of the Participant, prior to his retirement, the
Accrued Benefit credited to his Account shall be determined as of the Valuation
Date coinciding with or next following the date of death. The Accrued Benefit
and any amounts that are contributed, pursuant to Article V hereof, to the
Participant's Account for the Plan Year in which the Participant's death occurs
shall be paid to his Beneficiary. In the event of the death of a Participant
after ceasing to be an Employee, but prior to the complete distribution to him
of the balance of his Account, any unpaid amount at the time of his death shall
be payable to his Beneficiary.
The Participant's vested Accrued Benefit shall be paid to the Participant's
Beneficiary by either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's death, by his
Beneficiary): (a) One lump-sum payment; or (b) For an amount in a Participant's
Account equal to the balance of such Participants account under The Advest
Group, Inc. Incentive Savings Plan on September 30, 1989, payments over a period
certain in monthly, quarterly, semiannual, or annual cash installments over a
period to be determined by the Participant or his Beneficiary, and in
installments as nearly equal as practicable. After periodic installments have
commenced, the Beneficiary shall have the right to direct the Trustee to reduce
the period over which such periodic installments shall be made, and the Trustee
shall adjust the cash amount of such periodic installments accordingly.
If a Beneficiary designation designating both a primary and an alternate
Beneficiary is in effect at the time of a Participant's death and the
Participant's vested Accrued Benefit is payable in installments, the
installments shall be paid to the primary Beneficiary for his lifetime if said
primary Beneficiary is living at the death of the Participant, and upon the
death of the primary Beneficiary, or upon the death of the Participant if the
primary Beneficiary is not then living, any unpaid installments shall be paid to
the alternate Beneficiary.
Notwithstanding anything herein to the contrary, if the distribution of a
Participant's vested Accrued Benefit has begun in accordance with a method
selected in Section 10.1 and the Participant dies before his entire interest has
been distributed to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of distribution selected
pursuant to Section 10.1 as of his date of death. If a Participant dies before
he has begun to receive any distributions of his vested Accrued Benefit, his
entire vested Accrued Benefit shall be distributed to his Beneficiaries within
five years after his death. This five-year distribution requirement shall not
apply to any portion of the deceased Participant's vested Accrued Benefit which
<PAGE> - 42 -
is payable to or for the benefit of a designated Beneficiary. In such event,
such portion may be distributed over a period not extending beyond the life
expectancy of such designated Beneficiary, provided such distribution begins not
later than one year after the date of the Participant's death, or such later
date as may be prescribed by Treasury Regulations. However, in the event that
the Participant's spouse is his Beneficiary, the requirement that distributions
commence within one year of a Participant's death shall not apply. In lieu
thereof, such distribution must commence no later than the date on which the
deceased Participant would have attained age 70-1/2. If the surviving spouse
dies before the distributions to such spouse begin, then the five-year
distribution requirement shall apply as if the spouse were the Participant. Any
amount paid to a child shall be treated as if paid to the surviving spouse of
the Participant if such amount will become payable to the surviving spouse upon
such child reaching majority (or other designated event permitted under Treasury
Regulations).
11.2 Designation of Beneficiary. In the event of the death of a
Participant or former Participant, any benefits payable hereunder shall be paid
to the Participant's surviving spouse, if any, or to any other
[page 28]
Beneficiary who may be designated by the Participant as hereinafter provided if
such surviving spouse consents thereto or if there is no surviving spouse. For
purposes of entitlement to receive benefits pursuant to the foregoing sentence,
only a spouse who has been married to the Participant for the 1-year period
ending on the date of the Participant's death shall be considered a surviving
spouse unless otherwise specifically provided by a qualified domestic relations
order pursuant to Section 414(p)(5) of the Code.
The consent of a surviving spouse to the designation of any other
Beneficiary shall be made in writing on a form provided by the Administrator,
which form shall contain the surviving spouse's acknowledgment of the effect of
such consent and shall be witnessed by the Administrator, his representative, or
a notary public. Notwithstanding the foregoing, such written consent shall not
be required if it is established to the satisfaction of the Administrator or his
representative that such consent may not be obtained because there is no spouse,
because the spouse cannot be located, or because of such other circumstances as
the Secretary of the Treasury may by regulations prescribe.
Subject to the foregoing paragraphs of this Section, each Participant shall
have the right at any time to designate a primary and an alternate Beneficiary
to receive any benefits payable hereunder on the death of the Participant, and
from time to time to change any such designation. Each such designation shall
be evidenced by a written instrument filed with the Committee, signed by the
Participant. Such designation or change made pursuant to the first sentence of
this paragraph shall take effect as of the date of execution of such written
instrument, whether or not the Participant is living at the time of such filing,
but without prejudice to the Trust Fund on account of any payments made before
receipt of such written instrument by the Committee.
ARTICLE XII
Stock Rights of Participants
12.1 Voting Rights. Each Participant (or, in the event of his death, his
Beneficiary) shall have the right to direct the Trustee as to the manner in
which Shares allocated to his ESOP Account are to be voted on each matter
<PAGE> - 43 -
brought before an annual or special stockholders' meeting of the Company.
Before each such meeting of stockholders, the Trustee shall cause to be
furnished to each Participant (or Beneficiary) a copy of the proxy solicitation
material, together with a form requesting confidential directions on how such
Shares allocated to such Participant's ESOP Account shall be voted on each such
matter; provided, however, that the Committee shall in a timely manner provide
the Trustee with such proxy solicitation material and forms, and shall also
provide the Trustee with the mailing address of each Participant (or
Beneficiary). Upon timely receipt of such directions the Trustee shall on each
such matter vote as directed the number of shares (including fractional Shares)
allocated to such Participant's ESOP Account, and the Trustee shall have no
discretion in such matter. The instructions received by the Trustee from
Participants shall be held by the Trustee in confidence and shall not be
divulged or released to any person, including officers or Employees of the
Company or any Affiliate. The Trustee, to the extent consistent with the Act,
shall vote both allocated Shares for which it has not received direction, as
well as unallocated Shares, in the same proportion as directed Shares are voted,
and the Trustee shall have no discretion in such matter.
12.2 Rights on Tender or Exchange Offer. Each Participant (or, in the
event of his death, his Beneficiary) shall have the right, to the extent of the
number of Shares allocated to his ESOP Account, to direct the Trustee in writing
as to the manner in which to respond to a tender or exchange offer with respect
to Shares. The Trustee shall use its best efforts to timely distribute or cause
to be distributed to each Participant (or Beneficiary) such information as will
be distributed to stockholders of the Company in connection with any such tender
or exchange offer; provided, however, that the Committee shall in a timely
manner provide the Trustee with all such information, and shall also provide the
Trustee with the mailing address of each Participant (or Beneficiary). Upon
timely receipt of such instructions, the
[page 29]
Trustee shall respond as instructed with respect to Shares. The instructions
received by the Trustee from Participants shall be held by the Trustee in
confidence and shall not be divulged or released to any person, including
officers or Employees of the Company or any Affiliate. If the Trustee shall not
receive timely instruction from a Participant (or Beneficiary) as to the manner
in which to respond to such a tender or exchange offer, the Trustee shall not
tender or exchange any Shares with respect to which such Participant has the
right of direction, and the Trustee shall have no discretion in such matter.
Unallocated Shares shall be tendered or exchanged by the Trustee in the same
proportion as Shares with respect to which Participants (or Beneficiaries) have
the right of direction are tendered or exchanged, and the Trustee shall have no
discretion in such matter.
12.3 Rights in Event of Default. Notwithstanding the provisions of
Sections 12.1 and 12.2, the rights provided in those sections with respect to
unallocated Shares may be exercised by the lender under any Stock Obligation,
the proceeds of which were used to purchase such Shares, to the extent provided
by the terms of such Stock Obligation in the event of any default thereunder.
ARTICLE XIII
Termination of Plan
13.1 Termination. Although the Company hopes to continue the Plan and its
contributions to the Trust Fund indefinitely, the Company may, by action of the
<PAGE> - 44 -
Board, for any reason, terminate the Plan, in whole or in part, and all further
contributions to the Trust Fund at any time. Any liability of the Company
hereunder shall automatically terminate upon its being legally dissolved, upon
the filing of a petition in bankruptcy (either voluntarily or involuntarily) or
upon its making any general assignment for the benefit of creditors.
13.2 Distribution. Upon (1) the termination, in whole or in part, of the
Plan, (2) the complete discontinuance of contributions by the Employer to the
Trust Fund, or (3) the termination of the liability of the Company, as provided
for in Section 13.1 hereof, the Committee shall make a final allocation of
Employer contributions, if any, and net earnings or losses in the manner
prescribed herein to the Accounts of Participants who are Employees of the
Employer. Thereafter, the funds in the Accounts of each Participant shall be
paid and distributed to such person under any one or more of the options set
forth in Article X hereof, upon the earliest of (1) a date that is not more than
60 days following the later of termination of the Plan or receipt of a favorable
determination letter (if requested) from the Internal Revenue Service following
such termination, but only if another defined contribution plan (other than an
employee stock ownership plan) has not been established or is not maintained by
the Employer, (2) the Participant's attainment of age 59 1/2, (3) the
Participant's termination of employment with the Employer, (4) the Participant's
Total Disability, or (5) the Participant's death. Any final payment or
distribution to any Participant or Beneficiary in accordance with the provisions
hereof shall be in full satisfaction of all claims against the Employer, the
Trust Fund, the Trustee and the Committee.
13.3 Final Expenses. Notwithstanding anything to the contrary herein, all
expenses of administration of the Trust Fund, and other expenses incident to the
termination and distribution of the Trust Fund, incurred after the termination
of the Plan shall be paid by the Employer as directed by the Committee.
ARTICLE XIV
Amendment of Plan
14.1 Amendment. The Company shall have the right, by action of the Board,
to modify or amend this Plan, in whole or in part, at any time and from time to
time; provided, however, that no such action shall adversely affect Participants
to the extent of their vested benefits, nor shall such action
[page 30]
decrease a Participant's Accrued Benefit or eliminate an optional form of
distribution. Any such modifications or amendments may be made retroactively.
If the Plan shall at any time become a transferee of a plan which is
subject to the requirements of Section 401(a)(11)(A) of the Code, the Plan will
be amended to meet said requirements.
14.2 Trustee. The Committee shall deliver a copy of each amendment to the
Plan, and the Board resolution adopting the same, to the Trustee promptly after
its adoption. No amendment shall be made that would adversely affect the
Trustee or impose additional duties on it without the Trustee's written consent
thereto.
14.3 Change in Vesting. If an amendment or a change in the top-heavy
status of the Plan changes the vesting schedule of the Plan, as set forth in
Section 6.1 hereof, any Active Participant having three (3) or more years of
<PAGE> - 45 -
service, within the meaning of Section 1.411(a)-8(b)(3) of the Treasury
Regulations, on the date which is sixty (60) days after such amendment or change
is adopted or becomes effective (or, if later, sixty (60) days after written
notice of the amendment or change is given) may, no later than the end of the
election period, elect to remain subject to the vesting schedule in effect prior
to such amendment or change. For purposes of the foregoing, the "election
period" shall begin on the date the amendment changing the vesting schedule is
adopted or the date on which the Plan's top-heavy status is changed and shall
end no earlier than the latest of the following dates (provided that in the case
of a change in the Plan's top-heavy status, only clause (ii) shall apply):
(i) the date which is sixty (60) days after the day the Plan amendment is
adopted;
(ii) the date which is sixty (60) days after the day the Plan amendment
becomes effective or the top-heavy status of the Plan changes; or
(iii) the date which is sixty (60) days after the day the Participant is
issued written notice of the Plan amendment by the Employer or the Committee.
ARTICLE XV
Claims Procedure
15.1 Claims. Each Participant and Beneficiary of the Plan shall submit
all claims for benefits, claims relating to the amount or manner of any
distribution, and any other request relating to any Account, in writing, to the
Administrator of the Plan. The Administrator shall within a reasonable period
of time, but not later than 60 days after receipt thereof, either approve or
deny such claim or request, either wholly or in part, and notify the claimant in
writing of the action taken.
15.2 Notice of Denial. If such claim or request is wholly or partially
denied, the written notice of the Administrator shall set forth in a manner
calculated to be understood by the claimant:
(a) specific reason for the denial;
(b) specific reference to the pertinent Plan provisions on which the
denial is based;
(c) specific reference to any additional material or information
necessary for the claimant to perfect review of the claim and explanation of why
such material or information is necessary; and
(d) an explanation of the Plan's claims review procedure.
[page 31]
15.3 Review. Upon denial of such a claim or request, the claimant shall
be entitled within 60 days after the receipt of written notice of denial by the
Administrator:
(a) to request, in writing, a review by the Committee of the denial;
(b) to review pertinent documents; and
(c) to submit issues and comments in writing.
<PAGE> - 46 -
This 60-day period may be extended in special circumstances.
The Committee shall render a decision on its review of the denial promptly,
but not later than 60 days after the receipt of the request for review, unless
special circumstances require an extension of time, in which case a decision
shall be rendered not later than 120 days after the receipt of a request for
review.
The decision of the Committee shall be in writing and shall set forth
reasons therefore stated in a manner calculated to be understood by the
claimant, including specific references to the pertinent Plan provisions on
which the decision is based. All interpretations, determinations, decisions and
other actions of the Committee, taken in accordance with the provisions hereof
shall be final, conclusive and binding on all parties.
ARTICLE XVI
The Trustee
16.1 All contributions hereunder to the Trust Fund shall be held, in
trust, by such Trustee as may be selected by the Board, from time to time, under
a trust agreement approved by the Board, with such powers in the Trustee as to
investment, reinvestment, control and disbursement of all or part of the Trust
Fund as the Board shall approve and as shall be in accordance with the
provisions hereof. The Board may in its sole discretion remove any Trustee at
any time, upon reasonable notice, and upon such removal or upon the resignation
of any Trustee, the Board shall designate a successor Trustee.
ARTICLE XVII
Miscellaneous Provisions
17.1 The Plan and the Trust provided for hereunder are created for the
exclusive benefit of the Participants and their Beneficiaries. Under no
circumstances whatsoever shall any assets of the Trust Fund ever revert to, or
be used or enjoyed by, the Employer, or any successor thereto, nor shall any
such assets ever be used other than for the exclusive benefit of the
Participants or their Beneficiaries.
17.2 No Participant or Beneficiary shall have any legal or equitable right
or interest in the Trust Fund established hereunder, except as expressly
provided for herein, and no Employee shall be deemed to possess a right to share
in any moneys allocated by the Committee as hereinabove set forth, except as
herein provided.
17.3 Participation in the Plan shall not give any Participant the right to
continue as an Employee of the Employer or any right or claim to a retirement
pension unless the right to such retirement pension is provided for herein.
17.4 All decisions of the Committee hereunder shall be made in a uniform,
nondiscriminatory manner.
[page 32]
17.5 Whenever the Company or any Affiliate is permitted or required under
the terms of this Plan to take any action, it shall be done by its Board of
Directors or its Executive Committee and shall be evidenced by proper
resolutions certified by the appropriate officers.
<PAGE> - 47 -
17.6 The Plan shall not be automatically terminated by the Company's
acquisition by, or merger into, any other company. The Plan shall be continued
after such merger if the successor company agrees to continue the Plan. All
rights to amend or terminate the Plan shall be transferred to the successor
company, effective as of the date of the merger.
The merger or consolidation with, or transfer of assets and liabilities to,
any other qualified retirement plan shall be permitted only if the benefit each
Participant would receive if the Plan were terminated immediately after such
merger or consolidation, or transfer of assets and liabilities, would be at
least as great as the benefit he would have received had the Plan been
terminated immediately before any such transaction.
17.7 To the extent permitted by law and with the exception of payments
pursuant to a qualified domestic relations order within the meaning of Section
414(p) of the Code, no benefit payable hereunder shall be subject in any manner
to anticipation, assignment, garnishment, or pledge. Any attempt to anticipate,
assign, garnishee or pledge the same will be of no effect. No such benefits
will be in any manner liable for or subject to the debts, liabilities, or torts
of any Participants, and if any Participant is adjudicated bankrupt or attempts
to anticipate, assign or pledge any such benefits, then such benefits will, in
the discretion of the Committee, cease. In such event, the Committee will have
the authority to cause the same or any part thereof to be held or applied to or
for the benefit of such Participant, his spouse, his children or other
dependents, or any of them, in such manner and in such proportion as the
Committee may in its discretion deem proper.
17.8 A Participant shall not, with or without cause, be divested of any
Accrued Benefits under the terms of the Plan.
17.9 Notwithstanding any other provisions of the Plan, a former
Participant shall not be entitled to payment of duplicate benefits upon again
becoming a Participant.
17.10 The headings of the Sections herein are for reference only. In the
event of a conflict between such a heading and the content of a Section, the
content of the Section shall control.
17.11 The interpretation of the provisions hereof and the administration
of the Plan shall be governed, to the extent applicable, by the Act and, to the
extent the Act is not applicable, by the laws of Connecticut.
ARTICLE XVIII
Top-Heavy Plan Provisions
(Sections 18.1 - 18.9 provide definitions for Article XVIII)
18.1 Compensation. Compensation of an Employee which is reportable on
Form W-2 for the calendar year ending with or within the Plan year.
18.2 Key Employee. Any Employee or former Employee (and the Beneficiaries
of such Employee) who at any time during the Determination Period was an officer
of the Employer with Compensation greater than 150 percent of the dollar
limitation under Section 415(c)(1)(A) of the Code, an owner (or considered an
owner under Section 318 of the Code) of one of the ten largest interests in the
Employer if such individual's Compensation exceeds the dollar limitation under
Section 415(c)(1)(A)
<PAGE> - 48 -
[page 33]
of the Code and such individual's ownership interest exceeds 1/2 percent, a 5-
percent owner of the Employer, or a 1-percent owner of the Employer who has
Compensation of more than $150,000. The determination of who is a Key Employee
will be made in accordance with Section 416(i)(1) of the Code.
18.3 Top-Heavy Plan. This Plan is top-heavy if any of the following
conditions exists:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive Aggregation
Group of plans.
(b) If this Plan is a part of a Required Aggregation Group of plans
(but which is not part of a Permissive Aggregation Group) and the Top-Heavy
Ratio for the Required Aggregation Group of plans exceeds 60 percent.
(c) If this Plan is a part of a Required Aggregation Group of plans and
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60 percent.
18.4 Top-Heavy Ratio.
(a) The Top-Heavy Ratio for this Plan alone or for the Required or
Permissive Aggregation Group as appropriate is a fraction, the numerator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the Determination
Period(s)), and the denominator of which is the sum of all account balances
(including any part of any account balance distributed in the Determination
Period(s)) under the aggregated defined contribution plan or plans for all
participants, determined in accordance with Section 416 of the Code and the
Regulations thereunder.
(b) For purposes of (a) above, the value of account balances shall be
determined as of the most recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date. The account balances of a
participant (1) who is not a Key Employee but who was a Key Employee in a prior
year, or (2) who has not received any Compensation from any Employer maintaining
the plan at any time during the Determination Period shall be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account shall be made in accordance with
Section 416 of the Code and the Regulations thereunder. Deductible employee
contributions shall not be taken into account for purposes of computing the Top-
Heavy Ratio. When aggregating plans, the value of account balances shall be
calculated with reference to the Determination Date(s) that falls within the
same calendar year.
18.5 Permissive Aggregation Group. The Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
18.6 Required Aggregation Group. (a) Each qualified plan of the Employer,
whether or not terminated, in which at least one Key Employee participated
during the Determination Period, and (b) any other qualified plan of the
Employer which enabled a plan described in (a) to meet the requirements of
Section 401(a)(4) and 410 of the Code during the Determination Period.
<PAGE> - 49 -
18.7 Determination Date. For any Plan Year, the last day of the preceding
Plan Year.
[page 34]
18.8 Determination Period. The Plan Year containing the Determination
Date and the four (4) preceding Plan Years.
18.9 Valuation Date. For purposes of computing the Top- Heavy Ratio, the
Valuation Date shall be the normal annual valuation date for the Plan.
18.10 Special Provisions. If the Plan is or becomes a Top-Heavy Plan, the
following provisions shall supersede any conflicting provisions in the Plan:
(a) Minimum Allocations
(1) Except as otherwise provided in (2) and (3) below, for any Plan
Year in which this Plan is a Top-Heavy Plan, the Employer contributions
(including salary deferral contributions) and forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less than the lesser of
three percent (3%) of such Participant's Compensation or the largest percentage
of Employer contributions (including salary deferral contributions) and
forfeitures, as a percentage of the first $200,000 of the Key Employee's
Compensation, allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the year because of
(i) the Participant's failure to complete 1,000 Hours of Service (or any
equivalent provided in the Plan), or (ii) the Participant's failure to make
mandatory employee contributions to the Plan, or (iii) Compensation less than a
stated amount.
(2) The provision in (1) above shall not apply to any Participant who
was not employed by the Employer on the last day of the Plan Year.
(3) The provision in (1) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or plans of the
Employer which provide(s) for the minimum allocation or benefit applicable to
Top-Heavy Plans.
(b) Vesting
Notwithstanding the provisions of Section 6.1(a), a Participant shall vest
in his Account in accordance with the following table:
Years of Service Non-forfeitable Percentage
less than 1 0%
1 10%
2 25%
3 40%
4 55%
5 70%
6 100%
Notwithstanding the foregoing, a Participant shall be fully vested in his
Account to the extent provided in Section 6.1(b).
* * * * * * * * * * * * * * * *
<PAGE> - 50 -
[logo]
Exhibit 15
September 30, 1993
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: The Advest Group, Inc.
Registration on Form S-8
We are aware that our reports dated January 28, 1993, April 22, 1993 and July
21, 1993 on our reviews of interim financial information of The Advest Group,
Inc., included in the Company's quarterly reports on Form 10-Q for the quarters
ended December 31, 1992, March 31, 1993 and June 30, 1993, respectively, are
incorporated by reference in this registration statement. Pursuant to Rule
436(c) under the Securities Act of 1933, this report should not be considered a
part of the registration statement prepared or certified by us within the
meaning of Sections 7 and 11 of that Act.
Coopers & Lybrand
<PAGE> - 51 -
[logo]
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
The Advest Group, Inc. on Form S-8 (File No. 2-92868) of our report dated
October 22, 1992, on our audit of the consolidated financial statements and
financial statement schedules of The Advest Group, Inc. as of September 30,
1992, and for the year then ended, which report is included in the Annual Report
on Form 10-K. We also consent to the reference to our Firm under the caption
"Experts."
Coopers & Lybrand
Hartford, Connecticut
September 29, 1993
<PAGE> - 52 -
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our reports dated October
24, 1991, included or incorporated by reference in the Company's Form 10-K for
the year ended September 30, 1992 and to all references to our Firm included in
this registration statement.
Arthur Andersen & Co.
(ARTHUR ANDERSEN & CO.)
Hartford, Connecticut
September 30, 1993
