Registration No.
As filed with the Securities and Exchange Commission on September 24, 1999
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT Under
THE SECURITIES ACT OF 1933
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Albertson's, Inc.
(Exact name of registrant as specified in its charter)
Delaware 82-0184434
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
250 Parkcenter Blvd. Box 20
Boise, Idaho 83726
(Address of registrant's principal
executive offices)
Albertson's Savings & Retirement Estates
Thomas R. Saldin, Esq.
Executive Vice President and General Counsel
Albertson's, Inc.
250 Parkcenter Boulevard
P.O. Box 20
Boise, Idaho 83726
(208) 395-6300
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------- -------------------- ----------------- ----------------- =====================
Proposed Proposed Maximum
Title of Securities Amount to be Maximum Aggregate Amount of
to be Registered Registered (1) Offering Price Offering Price Registration Fee
Per Share
- --------------------------------------------- -------------------- ----------------- ----------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per share (2) 5,000,000 shares(3) $41.5625 (4) $207,812,500 $52,572
- --------------------------------------------- -------------------- ----------------- ----------------- ---------------------
Preferred Stock Purchase Rights (5) 00,000,000 shares N/A N/A N/A
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</TABLE>
(1) Plus such additional number of shares as may be required in the event of a
stock dividend, stock split, recapitalization or other similar event in
accordance with Rule 416(a) of the Securities Act of 1933, as amended
(the "Securities Act").
(2) Pursuant to Rule 429, 450,000 shares of Common Stock registered for the
American Stores Retirement Estates is being carried forward from
Registration Statement No. 333-82161. Accordingly, the filing fee payable
with this registration statement has been calculated with respect to
4,550,000 registered securities.
(3) Represents shares of Common Stock which may be issued pursuant to the
Albertson's Savings & Retirement Estates. Pursuant to Rule 416(c) of the
Securities Act, this Registration Statement also covers an indeterminate
amount of interests to be offered pursuant to the Albertson's Savings &
Retirement Estates defined contribution plan.
(4) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act based upon the average of the
high and low prices of the Registrant's common stock, par value $1.00 per
share ("Common Stock"), as reported by the New York Stock Exchange on
September 22, 1999.
(5) Associated with Common Stock are rights to purchase Series A Junior
Participating Preferred Stock that will not be exercisable or evidenced
separately from such Common Stock prior to the occurrence of certain
events.
<PAGE>
PART I
EXPLANATORY NOTE
This Registration Statement on Form S-8 relates to
(a) 5,000,000 shares of Common Stock which may be issued pursuant to
the Albertson's Savings & Retirement Estates defined contribution
plan ("ASRE"); and
(b) an indeterminate amount of interests to be offered pursuant to the
ASRE.
The documents containing information specified by Part I of this
Registration Statement have been or will be sent or given to participants in the
ASRE, as specified in Rule 428(b)(1) promulgated by the Securities and Exchange
Commission (the "SEC") under the Securities Act. Such document(s) are not
required to be filed with the SEC but constitute (along with the documents
incorporated by reference into this Registration Statement pursuant to Item 3 of
Part II hereof) a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933.
References to the "Company" shall mean Albertson's, Inc., a Delaware
corporation.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, NY and Chicago,
IL. Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to the public from the SEC's
web site at http://www.sec.gov. Reports, proxy and information statements and
other information concerning us can also be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, NY 10005.
The SEC allows us to "incorporate by reference" information into this
Registration Statement, which means that we can disclose important information
to you by referring you to another document filed separately with the SEC. The
information incorporated by reference is considered to be part of this
Registration Statement, and later information that we file with the SEC will
automatically update this Registration Statement. We incorporate by reference
the following documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended, prior to the termination of the offering:
(a) The description of the Common Stock included in our Registration
Statement on Form 8-A, filed with the SEC on January 29, 1976, and
all amendments or reports filed for the purpose of updating such
description, including the section captioned "Description of
Albertson's Capital Stock" in Albertson's Registration Statement
on Form S-4 dated October 9, 1998, Registration No. 33-63019;
(b) Our Quarterly Report on Form 10-Q, filed with the SEC on June 3,
1999, for the 13 week period ending April 29, 1999;
(c) Our Quarterly Report on Form 10-Q, filed with the SEC on September
8, 1999, for the 26 week period ending July 29, 1999;
(d) Our Annual Report on Form 10-K, filed with the SEC on April 8,
1999 for the fiscal year ended January 28, 1999 (excluding the
Independent Auditors' Report, together with the Consolidated
Financial Statements and the related notes thereto);
<PAGE>
(e) The Annual Report on Form 11-K for the American Stores Company
Retirement Estates (predecessor to the ASRE), filed by American
Stores Company with the SEC on June 25, 1999;
(f) The Annual Report on Form 11-K for the Albertson's Employees' Tax
Deferred Savings Plan (predecessor to the ASRE) on June 28, 1999;
(g) Our Current Report on Form 8-K filed with the SEC on January 11,
1999 filing the Joint Proxy Statement and Prospectus, dated
October 9, 1998;
(h) Our Current Report on Form 8-K filed with the SEC on April 6,1999;
(i) Our Current Report on Form 8-K filed with the SEC on July 2, 1999;
(j) Our Current Report on Form 8-K filed with the SEC on September 22,
1999; and
(k) The description of the Preferences and Rights of Series A Junior
Participating Preferred Stock included in our Registration
Statement on Form 8-A dated March 4, 1997, as amended by Amendment
No. 1 on Form 8-A dated August 6, 1998 and by Amendment No. 2 on
Form 8-A dated March 24, 1999.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporate Law (the "DGCL") provides
that a corporation may indemnify officers, directors, employees and agents
against expenses, judgments and other amounts paid if such person acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interests of the corporation, and for any criminal action, which they had
no reason to believe was unlawful. Upon receipt of a written undertaking to
reimburse the corporation if indemnification is not appropriate the DGCL
provides that a corporation may advance expenses of defense and must reimburse a
successful officer or director defendant for expenses paid, including attorney's
fees, and permits a corporation to purchase liability insurance for its
directors and officers. The DGCL provides that an individual may not be
indemnified for any claim or matter where a court has determined that the
individual is liable to the corporation, unless the court determines otherwise.
Our Restated Certificate of Incorporation and Bylaws provide that each
person who is involved in any actual or threatened action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he or she is or was serving as our director, officer, employee or agent, or
is or was serving at our request as a director, officer, employee or agent of
another corporation or other enterprise, including service with respect to an
employee benefit plan, will be indemnified by us to the extent permitted by the
DGCL. The indemnification rights in our Restated Certificate are not exclusive
of any other indemnification that may be given under any law, bylaw, agreement,
vote of stockholders or disinterested directors or otherwise. We are authorized
to purchase insurance on behalf of our directors, officers, employees and
agents.
This summary is subject to the DGCL, the Company's Restated Certificate
of Incorporation, By-laws and agreements referred to above.
<PAGE>
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The exhibits listed below are filed herewith or are incorporated herein
by reference to other filings.
The Albertson's Savings & Retirement Estates is qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended, and the plan has been,
and any future amendment thereto will be, submitted to the Internal Revenue
Service in a timely manner and all changes required by the IRS in order to
qualify the plan will be made.
Exhibit No. Description of Exhibit
4.1 Restated Certificate of Incorporation of the
Company (as amended) previously filed as
Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
April 30, 1998, and incorporated herein by
reference
4.2 By-Laws of the Company, previously filed
as Exhibit 3.1 to the Company's Current
Report on Form 8-K
4.3 Stockholder Rights Plan Agreement previously
filed as Exhibit 1 to the Company's Regis-
tration Statement on Form 8-A filed with the
SEC on March 4, 1997, and incorporated
herein by reference
4.4 Amendment No. 1 to Stockholder Rights Plan
Agreement, dated August 2, 1998, previously
filed as Exhibit 1 of Amendment to the
Company's Registration Statement on Form 8-A
filed with the SEC on August 6, 1998, and
incorporated herein by reference
4.5 Amendment No. 2 to Stockholders Rights Plan
Agreement, dated March 16, 1999, previously
filed as Exhibit 1 of Amendment to the
Company's Registration Statement on Form 8-A
filed with the SEC on March 25, 1999, and
incorporated herein by reference
4.6 Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock, previously filed as Exhibit
3.1.1 to the Company's Annual Report on Form
10-K for the year ended January 30, 1998,and
incorporated herein by reference
4.7 Amendment to Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock, previously
filed as Exhibit 3.1.2 to the Company's
Annual Report on Form 10-K for the year
ended January 28, 1999, and incorporated
herein by reference
4.8* Albertson's Savings & Retirement Estates
(Amended and Restated as of September 26,
1999)
5.1* Opinion of Thomas R. Saldin, Esq.
23.1 Consent of Thomas R. Saldin, Esq. (included
in Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP,Independent
Auditors
23.3* Consent of Ernst & Young LLP, Independent
Auditors
24.1 Power of Attorney (included on signature
page)
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* filed herewith
<PAGE>
Item 9. Undertakings
The Company hereby undertakes:
(a) 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;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Regis-
tration 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 this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in this Registration Statement or any
material change to such information in this Registra-
tion Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or
furnished to the SEC by the Company pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(b) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) 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.
(d) That, for the purpose of determining any liability under
the Securities Act, each filing of the Company's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions described in Item 6 of this Registration
Statement, or otherwise, the Company has been advised that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Boise, State of Idaho, on September 24, 1999.
Albertson's, Inc.
/s/ Gary G. Michael
By: Gary G. Michael
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of Albertson's, Inc., a
Delaware corporation, do hereby constitute and appoint each of Gary G. Michael,
Thomas R. Saldin, Esq. and A. Craig Olson, the lawful attorneys-in-fact and
agents with full power and authority to do any and all acts and things and to
execute any and all instruments which said attorneys and agents, and any one of
them, determine may be necessary or advisable or required to enable said
corporation to comply with the Securities Act and any rules or regulations or
requirements of the SEC in connection with this Registration Statement. Without
limiting the generality of the foregoing power and authority, the powers granted
include the power and authority to sign the names of the undersigned officers
and directors in the capacities indicated below to this Registration Statement,
to any and all amendments, both pre-effective and post-effective, and
supplements to this Registration Statement, and to any and all instruments or
documents filed as part of or in conjunction with this Registration Statement or
amendments or supplements thereof, and each of the undersigned hereby ratifies
and confirms that all said attorneys and agents, or any one of them, shall do or
cause to be done by virtue hereof. This Power of Attorney may be signed in
several counterparts.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
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<S> <C> <C>
Signature Title Date
Chairman of the Board and
Chief Executive Officer and
/s/ Gary G. Michael Director September 24, 1999
Gary G. Michael
Executive Vice President and Chief
/s/ A. Craig Olson Financial Officer September 24, 1999
A. Craig Olson
/s/ Michael F. Reuling Vice Chairman of the Company September 24, 1999
Michael F. Reuling
/s/ Richard J. Navarro Senior Vice President and Controller
Richard J. Navarro September 24, 1999
/s/ A. Gary Ames Director September 24, 1999
A. Gary Ames
/s/ Cecil D. Anrus Director September 24, 1999
Cecil D. Andrus
/s/ Pamela G. Bailey Director September 24, 1999
Pamela G. Bailey
/s/ Teresa Beck Director September 24, 1999
Teresa Beck
/s/ Henry I. Bryant Director September 24, 1999
Henry I. Bryant
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ John B. Fery Director September 24, 1999
John B. Fery
/s/ Fernando R. Gumucio Director September 24, 1999
Fernando R. Gumucio
/s/ Clark A. Johnson Director September 24, 1999
Clark A. Johnson
/s/ Charles D. Lein Director September 24, 1999
Charles D. Lein
Vice Chairman of the Board
/s/ Victor L. Lund and Director September 24, 1999
Victor L. Lund
/s/ J. B. Scott Director September 24, 1999
J.B. Scott
/s/ Arthur K. Smith Director September 24, 1999
Arthur K. Smith
/s/ Thomas L. Stevens, Jr. Director September 24, 1999
Thomas L. Stevens, Jr.
/s/ Steven D. Symms Director September 24, 1999
Steven D. Symms
/s/ Thomas J. Wilford Director September 24, 1999
Thomas J. Wilford
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
administrator of the Albertson's Savings & Retirement Estates has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boise, State of Idaho, on September
24, 1999.
Albertson's Savings & Retirement Estates
By: Albertson's, Inc.
/s/ Steven D. Young
By: Steven D. Young
Executive Vice President, Human Resources
and Chairman, Benefit Plans Committee
<PAGE>
Index to Exhibits
Exhibit No. Description of Exhibit
4.1 Restated Certificate of Incorporation of the
Company (as amended) previously filed as
Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended
April 30, 1998, and incorporated herein by
reference
4.2 By-Laws of the Company, previously filed
as Exhibit 3.1 to the Company's Current
Report on Form 8-K
4.3 Stockholder Rights Plan Agreement previously
filed as Exhibit 1 to the Company's Regis-
tration Statement on Form 8-A filed with the
SEC on March 4, 1997, and incorporated
herein by reference
4.4 Amendment No. 1 to Stockholder Rights Plan
Agreement, dated August 2, 1998, previously
filed as Exhibit 1 of Amendment to the
Company's Registration Statement on Form 8-A
filed with the SEC on August 6, 1998, and
incorporated herein by reference
4.5 Amendment No. 2 to Stockholders Rights Plan
Agreement, dated March 16, 1999, previously
filed as Exhibit 1 of Amendment to the
Company's Registration Statement on Form 8-A
filed with the SEC on March 25, 1999, and
incorporated herein by reference
4.6 Certificate of Designation, Preferences and
Rights of Series A Junior Participating
Preferred Stock, previously filed as Exhibit
3.1.1 to the Company's Annual Report on Form
10-K for the year ended January 30, 1998,and
incorporated herein by reference
4.7 Amendment to Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock, previously
filed as Exhibit 3.1.2 to the Company's
Annual Report on Form 10-K for the year
ended January 28, 1999, and incorporated
herein by reference
4.8* Albertson's Savings & Retirement Estates
(Amended and Restated as of September 26,
1999)
5.1* Opinion of Thomas R. Saldin, Esq.
23.1 Consent of Thomas R. Saldin, Esq. (included
in Exhibit 5.1)
23.2* Consent of Deloitte & Touche LLP,Independent
Auditors
23.3* Consent of Ernst & Young LLP, Independent
Auditors
24.1 Power of Attorney (included on signature
page)
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* filed herewith
EXHIBIT 4.8
ALBERTSON'S SAVINGS &
RETIREMENT ESTATES
(AMENDED AND RESTATED AS OF SEPTEMBER 26, 1999)
<PAGE>
TABLE OF CONTENTS
ARTICLE I...................................................................1
DEFINITIONS.................................................................3
2.1 Accounts.............................................................3
2.2 Additional Contributions.............................................4
2.3 Affiliated Company...................................................4
2.4 Anniversary Date.....................................................4
2.5 Annual Additions.....................................................4
2.6 Beneficiary..........................................................5
2.7 Board of Directors...................................................5
2.8 Break in Service.....................................................5
2.9 Calendar Quarter.....................................................7
2.10 Code................................................................7
2.11 Committee...........................................................7
2.12 Company.............................................................8
2.13 Company Contributions...............................................8
2.14 Company Stock.......................................................8
2.15 Compensation........................................................8
2.16 Computation Period.................................................10
2.17 Disability.........................................................11
2.18 Disability Status..................................................11
2.19 Earnings...........................................................11
2.20 Effective Date.....................................................11
2.21 Eligible Employee..................................................11
2.22 Employee...........................................................12
2.23 Employment Commencement Date.......................................12
2.24 ERISA..............................................................12
2.25 Forfeitures........................................................12
2.26 Fund Unit..........................................................13
2.27 Hardship...........................................................13
2.28 Highly Compensated Employee........................................13
2.29 Hour of Service....................................................15
2.30 Investment Fund....................................................16
2.31 Investment Manager.................................................17
2.32 Leave of Absence...................................................17
2.33 Normal Retirement Age..............................................17
2.34 Participant........................................................17
2.35 Participant Contributions..........................................17
2.36 Plan...............................................................17
2.37 Plan Administrator.................................................17
2.38 Plan Year..........................................................18
2.39 Reemployment Commencement..........................................18
2.40 Rollover Contributions.............................................18
<PAGE>
2.41 Sharing Contributions..............................................18
2.42 Suspense Account...................................................19
2.43 Tax Deferred Contributions.........................................19
2.44 Taxed Contributions................................................19
2.45 Trust and Trust Fund...............................................19
2.46 Trustee............................................................19
2.47 Valuation Date.....................................................19
2.48 Year of Service....................................................19
ARTICLE III................................................................22
ELIGIBILITY AND PARTICIPATION..............................................22
3.1 Participation.......................................................22
3.2 Participants in Prior Plans.........................................22
ARTICLE IV.................................................................23
PARTICIPANT CONTRIBUTIONS..................................................23
4.1 Election............................................................23
4.2 Amount Subject to Election..........................................23
4.3 Limitation on Compensation Deferrals................................24
4.4 Provisions for Return of Excess Tax
Deferred Contributions over $7,000......................................27
4.5 Provision for Recharacterization or Return of Excess
Deferrals by Highly Compensated Participants............................29
4.6 Limitations on Taxed Contributions and Company Contributions........31
4.7 Provision for Disposition of Excess Taxed Contributions or
Company Match on Contributions on Behalf of Highly Compensated
Participants............................................................33
4.8 Termination of, Change in Rate of, or Resumption of Deferrals.......36
4.9 Character of Contributions..........................................37
4.10 Rollover Contributions.............................................37
ARTICLE V..................................................................38
TRUST FUND AND COMPANY CONTRIBUTIONS.......................................38
5.1 Trust Fund..........................................................38
5.2 Company Contributions...............................................38
5.3 Form of Company Contributions.......................................38
5.4 Investment of Trust Assets..........................................38
5.5 American Stores Company Stock Fund..................................40
5.6 Irrevocability......................................................41
5.7 Company, Committee and Trustee Not Responsible for Adequacy
of Trust Fund...........................................................41
ARTICLE VI.................................................................42
ACCOUNTS AND ALLOCATIONS...................................................42
6.1 Participants'Accounts...............................................42
6.2 Allocation of Amounts Contributed by Participants...................42
6.3 Allocation of Company Contributions and Forfeitures.................42
6.4 Valuation of Participants'Accounts..................................46
6.5 Treatment of Accounts Upon Termination of Employment................48
6.6 Miscellaneous Valuation Rules.......................................48
<PAGE>
ARTICLE VII................................................................49
VESTING IN PLAN ACCOUNTS...................................................49
7.1 No Vested Rights Except as Herein Provided..........................49
7.2 Vesting Schedule....................................................49
7.3 Permissive Vesting..................................................50
7.4 Vesting of Participant Contributions................................50
7.5 Vesting During Leave of Absence.....................................50
ARTICLE VIII...............................................................52
PAYMENT OF PLAN BENEFITS...................................................52
8.1 Payment of Benefits.................................................52
8.2 Designation of Beneficiary..........................................55
8.3 Distribution Rules..................................................56
8.4 Forfeitures.........................................................58
8.5 Valuation of Plan Benefits..........................................59
8.6 Lapsed Benefits.....................................................59
8.7 Persons Under Legal Disability......................................59
8.8 Additional Documents................................................60
8.9 Direct Transfers....................................................60
8.10 Election for Direct Rollover..........................................60
ARTICLE IX.................................................................63
OPERATION AND ADMINISTRATION OF THE PLAN...................................63
9.1 Plan Administration.................................................63
9.2 Committee Powers....................................................63
9.3 Investment Manager..................................................65
9.4 Funding Policy......................................................65
9.5 Committee Procedure.................................................66
9.6 Compensation of Committee Members and Plan Expenses.................66
9.7 Resignation and Removal of Members..................................67
9.8 Appointment of Successors...........................................67
9.9 Records.............................................................67
9.10 Reporting and Disclosure...........................................68
9.11 Reliance Upon Documents and Opinions...............................68
9.12 Reliance on Committee Memorandum...................................68
9.13 Multiple Fiduciary Capacity........................................69
9.14 Limitation on Liability............................................69
9.15 Indemnification....................................................69
9.16 Bonding............................................................69
9.17 Voting and Other Rights of Company Stock...........................70
9.18 Prohibition Against Certain Actions................................71
<PAGE>
9.19 Military Service .....................................................72
ARTICLE X..................................................................73
MERGER OF COMPANY, MERGER OF PLAN..........................................73
10.1 Effect of Reorganization or Transfer of Assets.....................73
10.2 Merger Restriction.................................................73
ARTICLE XI.................................................................74
11.1 Plan Termination...................................................74
11.2 Discontinuance of Contributions....................................74
11.3 Rights of Participants.............................................75
11.4 Trustee's Duties on Termination....................................75
11.5 Partial Termination................................................76
ARTICLE XII................................................................77
APPLICATION FOR BENEFITS...................................................77
12.1 Application for Benefits...........................................77
12.2 Action on Application..............................................77
12.3 Appeals............................................................78
ARTICLE XIII...............................................................79
LIMITATIONS ON CONTRIBUTIONS...............................................79
13.1 General Rule.......................................................79
13.2 Other Defined Contribution Plans...................................80
13.3 Defined Benefit Plans..............................................80
13.4 Adjustments for Excess Annual Additions............................81
13.5 Affiliated Company.................................................84
ARTICLE XIV................................................................85
RESTRICTION ON ALIENATION..................................................85
14.1 General Restrictions Against Alienation............................85
14.2 Qualified Domestic Relations Orders................................85
14.3 Authorized Participant Loans.......................................89
14.4 Group Insurance Payments Through December 31, 1992.................92
ARTICLE XV.................................................................93
SPECIAL TOP-HEAVY RULES....................................................93
15.1 Applicability......................................................93
15.2 Definitions........................................................93
15.3 Top-Heavy Status...................................................94
15.4 Contributions......................................................96
15.5 Maximum Annual Additions...........................................97
15.6 Vesting Rules......................................................97
15.7 Noneligible Employees..............................................98
<PAGE>
ARTICLE XVI................................................................99
PLAN AMENDMENTS............................................................99
16.1 Amendments.........................................................99
16.2 Retroactive Amendments............................................100
ARTICLE XVII..............................................................101
SURVIVOR ANNUITY REQUIREMENTS.............................................101
17.1 Application of Article............................................101
17.2 Definitions.......................................................101
17.3 Form of Benefits Provided.........................................102
17.4 Elections With Respect to Survivor Annuities......................102
17.5 Marriage Requirement..............................................104
17.6 Lump Sum Distributions............................................105
17.7 Security for Loans................................................105
17.8 Purchase of Annuity Contract to Provide Benefits..................106
ARTICLE XVIII.............................................................107
MISCELLANEOUS.............................................................107
18.1 No Enlargement of Employee Rights.................................107
18.2 Inspection of Records.............................................107
18.3 Mailing of Payments and Addresses.................................107
18.4 Notices and Communications........................................107
18.5 Governing Law.....................................................108
18.6 Interpretation....................................................108
18.7 Withholding For Taxes.............................................108
18.8 Successors and Assigns............................................108
18.9 Counterparts......................................................108
<PAGE>
ALBERTSON'S SAVINGS &
RETIREMENT ESTATES
(Amended and Restated as of September 26, 1999)
ARTICLE I
NAME AND PURPOSES
Effective as of January 1, 1985, American Stores Company ("ASC")
established a tax qualified profit sharing plan under Code Section 401(a) with a
cash or deferred arrangement feature under Code Section 401(k), for Eligible
Employees of the ASC, known as the "American Stores Retirement Estates" (the
"Plan"). A restated Plan document was adopted, effective January 1, 1989 (the
"1989 Restatement"), and was intended to fully replace and restate the
provisions of the Plan document in effect prior to said date in order to
accomplish the following:
(a) To bring certain Plan language into conformity with recent
developments in applicable federal pension law; and,
(b) To implement certain Plan design modifications intended to
facilitate and improve the efficient administration of the Plan.
A restated Plan document was adopted in 1990 (the "1990 Restatement"),
generally effective January 1, 1989, and was intended to fully replace and
restate the provisions of the 1989 Restatement and all amendments to the 1989
Restatement in order to accomplish the following:
(a) To incorporate the provisions of the First, Second, and Third
Amendments to the 1989 Restatement into a single restated document;
and,
(b) To implement the proposed Fourth Amendment to the 1989 Restatement
submitted to the Internal Revenue Service for a favorable determination
letter and on which such favorable determination letter was issued on
June 7, 1990.
A second restated Plan document was adopted in 1990 (the "Second 1990
Restatement"), effective January 1, 1989, and was intended fully to replace and
restate the provisions of the 1990 Restatement primarily to provide for the
merger of the Lucky Stores Retirement Estates into the Plan as of January 1,
1991 and the compliance with the requirements of Code Section 411(d)(6).
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A restated Plan document was adopted in 1992 (the "1992 Restatement"),
effective December 14, 1992 and was intended fully to replace and restate the
provisions of the Second 1990 Restatement primarily to provide for the transfer
of the recordkeeping and administrative services for the Plan from ASC to
Fidelity Institutional Retirement Services Company. All administrative rules
adopted prior to December 14, 1992 in connection with this Plan were superseded
and repealed.
The 1994 Restatement was adopted to incorporate the 1992 Restatement
and subsequent amendments which addressed certain changes in the law and Plan
modifications.
Effective August 1, 1996, ASRE was merged with Jewel Companies
Retirement Estates ("JCRE"), with ASRE being the surviving plan. Immediately
after the merger, each participant in the merged plan had an account balance
equal to the sum of the account balances the participant had in the plans
immediately prior to the merger.
Effective June 23, 1999, ASC merged with a subsidiary of Albertson's
Inc. ("Albertson's") and ASC became a subsidiary of Albertson's. Effective
September 26, 1999, Albertson's hereby adopts and assumes the obligations of the
Plan and expands eligibility to include certain employees of Albertson's and its
subsidiaries. The portion of the Albertson's Employees Tax Deferred Savings Plan
("Savings Plan") attributable to participants in the Savings Plan who become
eligible to participate in ASRE is hereby merged into ASRE, with ASRE, as
amended and restated herein, being the surviving plan. The related trust assets
are transferred to the Master Trust Agreement for the Albertson's, Inc. Benefit
Plans. Immediately after the merger and transfer, each participant in the merged
plan shall have an account balance equal to the sum of the account balances the
participant had in the plans immediately prior to the merger. Therefore, an
amended and restated Plan is being adopted effective September 26, 1999, to
document Albertson's adoption of the Plan, to effect the merger of a portion of
the Savings Plan into ASRE, to implement certain Plan design modifications and
to incorporate amendments adopted since the 1994 Restatement and changes in the
law.
The Plan is intended to constitute a plan described in ERISA Section
404(c). Consequently, notwithstanding any other provision of this Plan to the
contrary, that one or more fiduciaries of the Plan shall be relieved of
responsibility for investment decisions made by Participants to the maximum
extent contemplated by ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder.
Unless otherwise expressly provided, this amended and restated Plan
shall apply only to periods which commence on or after September 26, 1999.
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ARTICLE II
DEFINITIONS
2.1 Accounts.
"Accounts" or "Participant's Accounts" shall mean each of the following
accounts maintained for a Participant:
(a) Taxed Contributions Account which holds his/her Taxed Contributions
made hereunder and earnings thereon as well as post-tax contributions
made under the American Stores Company Employees' Thrift Plan and
earnings thereon.
(b) Tax Deferred Contributions Account which holds his/her Tax Deferred
Contributions and earnings thereon as well as similar contributions
made under the Lucky Stores Retirement Estates and the Albertson's
Employees Tax Deferred Savings Plan and earnings thereon.
(c) Company Match on Contributions Account which holds his/her share of
the Company contribution made under Section 6.3(b) hereof and earnings
thereon.
(d) Company Contribution on Pay Account which holds his/her share of
the Company contribution made with respect to his/her Compensation
during a Plan Year under Section 6.3 hereof and earnings thereon.
(e) Company Contribution on Pay (Fully Vested) Account which holds
his/her share of the Company contribution made with respect to his/her
deemed compensation as provided in Section 6.3(c)(iii) hereof during a
Plan Year under Section 6.3(c) hereof and earnings thereon and amounts
transferred as provided in Section 7.3 hereof and earnings thereon.
(f) Rollover Account which holds his/her amounts representing Rollover
Contributions made after September 30, 1992 and earnings thereon.
(g) Prior Plans Account which holds his/her amounts representing
Rollover Contributions made prior to October 1, 1992 and earnings
thereon and interests in the American Stores Retirement Plan, American
Stores Stock Ownership Plan, the Skaggs Profit Sharing Plan, and
employer contributions under the American Stores Company Employees'
Thrift Plan and earnings thereon; provided, however, that amounts
representing Rollover Contributions by a Participant who had fewer than
five (5) years of participation in the Plan as of October 1, 1992 or
whose Rollover Contributions were made after September 30, 1991 shall
be credited to the Participant's Rollover Account.
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2.2 Additional Contributions.
"Additional Contributions" of a Participant shall mean his/her
Contributions (whether Taxed or Tax Deferred) in excess of six percent (6%) of
Compensation. Additional Contributions shall not share in allocations of Company
Contributions and Forfeitures.
2.3 Affiliated Company.
"Affiliated Company" shall mean:
(a) Any corporation that is included in a controlled group of
corporations, within the meaning of Section 414(b) of the Code, that
includes the Company;
(b) Any trade or business that is under common control with the Company
within the meaning of Section 414(c) of the Code; and
(c) Any Participant of an affiliated service group, within the meaning
of Section 414(m) of the Code, that includes the Company.
2.4 Anniversary Date.
"Anniversary Date" shall mean the last day of each Plan Year.
2.5 Annual Additions.
"Annual Additions" shall mean, for a particular Participant on behalf
of any Plan Year, the sum of:
(a) The amount credited to the Participant's Accounts from Company
Contributions (including Tax Deferred Contributions) for the Plan Year;
(b) The Participant's Taxed Contributions;
(c) Forfeitures;
(d) Any amounts allocated to an account established under a pension or
annuity plan to provide medical benefits with respect to a Participant
after retirement under Section 401(h) of the Code.
(e) Any amounts allocated for such Plan Year which amounts are derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post retirement
medical or life insurance benefits allocated to the separate account of
a key employee (as defined in Code Section 416(i)) under Code Section
419A(d)(1).
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(f) Excess deferral amounts determined pursuant to Section 4.4, 4.5,
and 4.7.
Notwithstanding the foregoing, Paragraphs (d) and (e) above shall not be
included as Annual Additions for the purpose of applying the limitation
contained in Section 13.1(a)(ii). A Participant's Rollover Contributions shall
not be taken into account in determining the amount of his/her Annual Additions.
2.6 Beneficiary.
"Beneficiary" or "Beneficiaries" shall mean the person or persons last
designated by a Participant as set forth in Section 8.2 or, if there is no
designated Beneficiary or surviving Beneficiary, the person or persons
designated pursuant to Section 8.2 to receive the interest of a deceased
Participant in such event.
2.7 Board of Directors.
"Board of Directors" shall mean the Board of Directors(or its delegate)
of Albertson's, Inc. as it may from time to time be constituted.
2.8 Break in Service
For Employees hired on or after the Effective Date, the following
provisions shall apply with respect to Breaks in Service.
(a) For purposes of eligibility for participation, Breaks in
Service shall mean a twelve (12) consecutive month period
commencing on the Employee's Employment Commencement Date or
Reemployment Commencement Date (as the case may be) in which
the Employee does not complete more than five hundred (500)
Hours of Service.
(i) The following provisions of this Section 2.8
shall apply in Plan Years beginning after December
31, 1984 to an Employee who is absent from work for
any period
(A) By reason of the pregnancy of the
Employee,
(B) By reason of the birth of a child of
the Employee,
(C) By reason of the placement of a child
with the Employee in connection with the
adoption of the child by the Employee, or
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(D) For purposes of caring for the child
for a period beginning immediately following
the birth or placement.
(ii) The number of Hours of Service to which an
Employee described in Paragraph (i) shall be credited
with shall be --
(A) The number which otherwise would
normally have been credited to the Employee
but for the absence, or
(B) If the number described in Subparagraph
(i) above is not capable of being
determined, eight (8) Hours of Service per
day of such absence, provided that the total
number of hours treated as Hours of Service
under this Paragraph (B) shall not exceed
five hundred one (501) and that these Hours
of Service shall be taken into account
solely for purposes of determining whether
or not the Employee has incurred a Break in
Service.
(iii) The Hours described in Paragraph (ii) shall be
credited to the Computation Period --
(A) In which the absence from work begins,
if the Employee would be prevented from
incurring a Break in Service in that
Computation Period solely because the period
of absence is treated as Hours of Service
under this Section 2.8, or as
(B) In any other case, in the immediately
following Computation Period.
(iv) The above provisions of this Section 2.8 shall
not apply to an Employee described in Paragraph (a)
(i) unless the Employee provides such timely
information as the Committee may reasonably require
to establish that
(A) The absence is for reasons described in
Paragraph (a) (i), and
(B) The number of days for which there was
such an absence.
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(b) For purposes of vesting, a Break in Service shall mean in
the case of any Employee after he/she has become a Participant
and while he/she remains a Participant, a twelve (12)
consecutive month period commencing with the date on which the
Employee's employment or Leave of Absence is terminated during
which the Employee is not credited with an Hour of Service.
Notwithstanding the above, for Plan Years beginning after
December 31, 1984, in the case of an Employee who is absent
from work for Maternity or Paternity Leave, the twelve (12)
consecutive month period beginning on the date on which the
Employee's employment or Leave of Absence is terminated shall
not constitute a Break in Service. The termination date of an
Employee who is absent from service beyond the first
anniversary date of absence by reason of a Maternity or
Paternity Leave shall occur on the second anniversary of the
first date of such absence. The period between the first and
second anniversaries of the first date of absence from work
shall be considered neither a Year of Service nor a Break in
Service. "Maternity or Paternity Leave" shall mean an absence
from work for any period--
(i) By reason of the pregnancy of the Employee,
(ii) By reason of the birth of a child of the Employee,
(iii) By reason of the placement of a child with the Employee
in connection with the adoption of the child by the Employee,
or
(iv) For purposes of caring for the child for a period
beginning immediately following the birth or placement.
However, the provisions of the preceding sentence shall not apply
unless the Employee provides such timely information as the Committee
may reasonably require to establish that the absence is for the reasons
listed above and the number of days for which there was such an
absence.
2.9 Calendar Quarter.
"Calendar Quarter" shall mean the period of three (3) successive months
beginning on the first day of any January, April, July or October.
2.10 Code.
"Code shall mean the Internal Revenue Code of 1986, as in effect on the
date of execution of this Plan document and as thereafter amended from time to
time.
2.11 Committee.
"Committee" shall mean the Albertson's, Inc. Benefit Plans Committee
described in Article IX.
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2.12 Company.
(a) Effective September 26, 1999, "Company" shall mean Albertson's,
Inc., or any successor thereof, if its successor shall adopt this Plan.
Prior to September 26, 1999, "Company" meant American Stores Company.
(b) In addition, unless the context indicates otherwise, as used in
this Plan the term "Company" shall also mean and include any Affiliated
Company (or similar entity) that has been granted permission by the
Board of Directors to participate in this Plan. This permission shall
be granted under such conditions and upon such conditions as the Board
of Directors deems appropriate.
2.13 Company Contributions.
"Company Contributions" shall mean all amounts (whether in cash or
Company Stock) paid by the Company into the Trust Fund established and
maintained under the provisions of this Plan for the purpose of providing
benefits for Participants and their Beneficiaries.
2.14 Company Stock.
"Company Stock" shall mean whichever of the following is applicable.
(a) So long as the Company has only one class of common stock, that
class of stock.
(b) In the event the Company at any time has more than one class of
stock, the class (or classes) of the Company's stock that constitutes
"Employer Securities" as that term is defined Code Section 409(1).
2.15 Compensation.
(a) "Compensation" shall mean a Participant's straight-time earnings,
overtime, and any bonus or other amounts paid by the Company by reason
of services performed by an Employee (including payments pursuant to
amounts previously deferred under a nonqualified deferred compensation
plan) and including a Participant's Tax Deferred Contributions and
Taxed Contributions to this Plan, and wage replacement benefits under
Company-sponsored programs for either occupational or non-occupational
disability benefits, except as provided in (b)(iv) below, before
deductions authorized by the Employee or required by law to be withheld
from the Employees of the Company.
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(b) Notwithstanding the foregoing, a Participant's Compensation shall
be determined without taking into account any of the following:
(i) Contributions or payments by the Company for or on account
of an Employee under any nonqualified deferred compensation
plan, and any health or welfare plans;
(ii) Compensation that is not subject to employer income tax
withholding under Code Section 3402 (or any successor
thereof), except such Compensation as is provided in
Paragraphs b (i) and (d) of this Section 2.15.
(iii) Income caused by the exercise of stock options or stock
appreciation rights;
(iv) Income attributable to benefits received under the long
term disability plan maintained by the Company; and
(v) Income attributable to severance from Company employment.
(c) A Participant's Compensation for purposes of this Plan shall be the
compensation paid to him/her during the portion of the relevant Plan
Year during which he/she was a Participant, irrespective of when such
compensation was actually earned.
(d) Except as is expressly provided to the contrary in this Plan, a
Participant's Compensation shall include his Participant Contributions
and any amounts covering employee contributions from the pre-tax health
care premium payment arrangement under the American Stores Company
Before Tax Plan or any similar arrangement sponsored by the Company
pursuant to Code Section 125.
(e) "Compensation" of any Employee taken into account under the Plan
for any Plan Year that begins on or after January 1, 1989 shall not
exceed the annual compensation limit in effect under Section 401(a)(17)
of the Code for a calendar year. Any cost-of-living adjustment in
effect for a calendar year under Section 401(a)(17) of the Code shall
apply to any period used to determine Compensation, not to exceed
twelve (12) months, that begins in such calendar year.
(i) "Compensation" of any Employee taken into account under
the Plan for any Plan Year that begins on or after January 1,
1994 shall not exceed $150,000, as that amount is adjusted in
accordance with Section 401(a)(17)(B) of the Code.
(ii) "Compensation" of any Employee taken into account under
the Plan for any Plan Year that begins on or after January 1,
1989 and before January 1, 1994, shall not exceed $200,000, as
<PAGE>
that amount is adjusted at the same time and in the same
manner as under Section 415(d) of the Code.
(iii) If Compensation for a period of less than twelve (12)
months is taken into account for any Plan Year, then, to the
extent required by regulations under Section 401(a)(17) of the
Code, the otherwise applicable annual Compensation limit
provided under this Subsection is reduced in the same
proportion as the reduction in the twelve-month period.
(iv) The family aggregation rules of Section 414(q)(6) of the
Code shall apply for purposes of the annual Compensation limit
provided under this Subsection, except in applying such rules,
the term "family" shall include only the spouse of the
Employee and any lineal descendants of the Employee who have
not attained age 19 before the close of the year. If, as a
result of the application of such rules the limit is exceeded,
then, the limit shall be prorated among the affected
individuals in proportion to each such individual's Compensa-
tion as determined under this Subsection prior to the
application of this limit. Notwithstanding the foregoing, the
family aggregation rules of Section 414(a) (b) shall not
apply for purposes of determining Compensation in Plan Years
beginning after December 31, 1996.
(f) Prior to the Effective Date, Compensation was determined as
provided in the prior plan document.
2.16 Computation Period.
(a) "Computation Period" shall mean the consecutive twelve (12) month
period used for determining whether the Employee is to be credited with
a Year of Service or a Break in Service.
(b) For periods preceding January 1, 1994, an Employee's Initial
Computation Period shall be the twelve-month period commencing on
his/her Employment Commencement Date or Reemployment Commencement Date
(whichever is applicable) and an Employee's second Computation Period
(and all subsequent periods) shall be the Plan Year that includes or
starts on the same day as the first anniversary of his/her Employment
Commencement Date or Reemployment Commencement Date (whichever is
applicable).
(c) Effective as of January 1, 1994, an Employee's Computation Period
shall be the twelve-month period commencing on his/her Employment
Commencement Date or Reemployment Commencement Date (whichever is
applicable).
<PAGE>
2.17 Disability.
"Disability" shall mean the permanent and total disability of a
Participant while an Eligible Employee whereby the Participant is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months. The determination as to whether a Participant has
incurred a Disability shall be made by the Committee (or its representative).
2.18 Disability Status.
"Disability Status" shall mean that a Leave of Absence has continued
for 52 weeks and is due to a Disability. The determination as to whether a
Participant is on a Disability Status after the 52-week Leave of Absence has
expired shall be made by the Committee (or its representative).
2.19 Earnings.
"Earnings" shall mean the Company's operating profits for its fiscal
year beginning within the Plan Year before any reduction for retirement plan
contributions plus its retained earnings.
2.20 Effective Date.
"Effective Date" shall mean September 26, 1999, which shall be the
Effective Date of this restated Plan document (except as otherwise provided
herein). Notwithstanding the foregoing, for periods prior to said Effective Date
or such other date as provided herein, and unless otherwise provided herein, and
Plan matters shall be subject to the provisions of the predecessor plan document
and amendments thereto as in effect prior to September 26, 1999 (except as
specifically provided herein), which established the terms of the Plan prior to
that date.
2.21 Eligible Employee.
"Eligible Employee" shall mean any Employee who is not represented in
employment by a labor organization unless such organization and the Company have
specifically agreed that the Plan shall be applicable to employees so
represented, and who is regularly employed in the United States by one or more
of the Companies; provided that if an Employee becomes represented in employment
by a labor organization and the Company and the labor organization do not
specifically agree that the Plan will be applicable to employees so represented,
the Employee will cease to be an Eligible Employee.
<PAGE>
2.22 Employee.
(a) "Employee" shall mean each person currently employed in any
capacity by the Company or Affiliated Company any portion of whose
income is subject to withholding of income tax and/or for whom Social
Security contributions are made by the Company. "Employee" shall not
include "leased employees" as defined in the Code or any individual
designated by the Company as a consultant, independent contractor or
other non-employee and notwithstanding whether such individual is
determined to be a common law employee of the Company or an Affiliated
Company.
(b) Although Eligible Employees are the only class of Employees
eligible to participate in this Plan, the term "Employee" is used to
refer to persons employed in a non-Eligible Employee capacity as well
as Eligible Employee category. Thus, those provisions of this Plan that
are not limited to Eligible Employees, such as those relating to Hours
of Service, apply to both Eligible and non-Eligible Employees.
2.23 Employment Commencement Date.
(a) "Employment Commencement Date" shall mean the date on which an
Employee is first credited with an Hour of Service for the Company or
an Affiliated Company.
(b) Except to the extent the Company shall expressly determine
otherwise or as expressly provided otherwise in this Plan, an Employee
shall not, for purposes of determining his/her Employment Commencement
Date, be deemed to have commenced employment with the Company or an
Affiliated Company prior to the date on or as of which the operating
unit or entity employing him or her became part of or acquired by the
Company or an Affiliated Company.
2.24 ERISA.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
2.25 Forfeitures.
"Forfeitures" shall mean the nonvested portion of a Participant's
benefit that is forfeited in accordance with the provisions of Article VIII.
<PAGE>
2.26 Fund Unit.
"Fund Unit" shall mean a unit of participation in any separate
Investment Fund maintained under the Trust pursuant to Section 5.4(b),
representing an undivided interest in all of the assets of any such Investment
Fund.
2.27 Hardship.
"Hardship" shall mean, for the purpose of determining whether a
Participant has incurred a "hardship" that would permit him or her to receive a
distribution under Section 8.1(b), the occurrence of an immediate and heavy
financial need of such Participant. The determination of the existence of a
Hardship and the amount to be distributed to meet the need created by the
Hardship shall be made by the Committee (or its representative) in accordance
with the provisions of Section 8.1(b) in a uniform and nondiscriminatory manner.
2.28 Highly Compensated Employee
(a) For Plan Years beginning on or after January 1, 1997, "Highly
Compensated Employee" shall mean any Employee who
(i) was a Five Percent Owner during the Plan Year or the
preceding Plan Year, or
(ii) for the preceding Plan Year
(A) had compensation from the Employer in excess of
$80,000 (as adjusted by the Secretary of the Treasury)
and
(B) if the Employer elects the application of this
clause for such preceding year, was in the Top Paid
Group.
(b) Determination of a Highly Compensated Employee shall be in
accordance with the following definitions and special rules:
(i) An Employee shall be treated as a Five Percent Owner for
any Plan Year if at any time during such Year such Employee
was a Five Percent Owner (as defined in Section 15.2).
(ii) An Employee is in the "Top-Paid Group" of Employees for
any Plan Year if such Employee is in the group consisting of
the top twenty percent (20%) of the Employees when ranked on
the basis of Compensation paid during such Year.
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(iii) For purposes of this Section the term "Compensation"
means Compensation as defined in Code Section 415(c)(3),
without regard to the limitations of Code Section 401(a)(17);
provided, however, the determination under this Subparagraph
(vii) shall be made without regard to Code Sections 125,
402(a)(8), and 402(h)(1)(B), and in the case of employer
contributions made pursuant to a salary reduction agreement,
without regard to Code Section 403(b).
(iv) For purposes of determining the number of Employees in
the "top-paid" group under this Section, the following
Employees shall be excluded:
(A) Employees who have not completed six (6) months
of service with the Company,
(B) Employees who normally work less than 17-1/2
hours per week,
(C) Employees who normally work not more than six (6)
months during any Plan Year, and
(D) Employees who have not attained age 21,
(E) Except to the extent provided in Treasury
Regulations, Employees who are included in a unit of
employees covered by an agreement which the Secretary
of Labor finds to be a collective bargaining
agreement between Employee representatives and
Employer, and
(F) Employees who are nonresident aliens and who
receive no earned income (within the meaning of Code
Section 911(d)(2) from the Employer which constitutes
income from sources within the United States (within
the meaning of Code Section 861(a)(3)).
The Employer may elect to apply Subparagraphs (iv)(A) through
(D) above by substituting a shorter period of service, smaller
number of hours or months, or lower age for the period of
service, number of hours or months, or (as the case may be)
than as specified in such Subparagraphs.
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(v) A former Employee shall be treated as a Highly Compensated
Employee if
(A) such Employee was a Highly Compensated Employee
when such Employee incurred a Severance, or
(B) such Employee was a Highly Compensated Employee
at any time after attaining age fifty-five (55).
(vi) Code Sections 414(b), (c), (m), and (o) shall be applied
before the application of this Section. Also, the term
"Employee" shall include "leased employee," within the meaning
of Code Section 414(n), unless such leased Employee is covered
under a "safe harbor" plan of the leasing organization and not
covered under a qualified plan of the Employer.
(vii) For the purpose of this section, the term "Employer"
shall mean the Company and any Affiliated Company.
(viii) Notwithstanding the forgoing, non-resident aliens
without U.S. source income from the Employer shall be
disregarded for all purposes in determining the Highly
Compensated Employees of the Employer.
Notwithstanding the foregoing, for administrative convenience,
the Committee may establish rules and procedures for purposes of
identifying Highly Compensated Employees, which rules and procedures
may result in an Eligible Employee being deemed to be a Highly
Compensated Employee for purposes of the limitations of Article IV and
Article VI, whether or not such Eligible Employee is an individual
described in Code Section 414(q).
2.29 Hour of Service.
(a) "Hour of Service" of an Employee shall mean the following:
(i) Each hour for which the Employee is paid by the Company or
an Affiliated Company or entitled to payment for the
performance of services as an Employee.
(ii) Each hour in or attributable to a period of time during
which the Employee performs no duties (irrespective of whether
he/she has terminated his/her Employment) due to a vacation,
holiday, illness, incapacity (including pregnancy or
disability), layoff, jury duty, military duty or a Leave of
Absence (if the Leave of Absence is an unpaid medical Leave of
Absence, the Employee will accrue hours for the duration of
such leave for the first six months of such leave), for which
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he/she is so paid or so entitled to payment, whether direct or
indirect. However, no such hours shall be credited to an
Employee if (A) such Employee is directly or indirectly paid
or entitled to payment for such hours and (B) such payment or
entitlement is made or due under a plan maintained solely for
the purpose of complying with applicable worker's
compensation, unemployment compensation, or disability
insurance laws, or is a payment which solely reimburses the
Employee for medical or medically-related expenses incurred by
him/her.
(iii) Each hour for which he/she is entitled to back pay,
irrespective of mitigation of damages, whether awarded or
agreed to by the Company or an Affiliated Company, provided
that such Employee has not previously been credited with an
Hour of Service with respect to such hour under Subparagraphs
(i) or (ii) above.
Hours of Service under Paragraphs (a)(ii) and (a)(iii) shall be
calculated in accordance with Department of Labor Regulation 29 C.F.R.
ss. 2530.200b-2(b). All Hours of Service determined under the rules of
Paragraph (a) shall be credited to the Computation Period to which the
payment relates, rather than the period in which it is made.
(b) In the event that an Employee is compensated for duties performed
on a basis other than actual hours worked and no records of the
Employee's actual working hours are maintained, the Employee shall be
deemed to have completed forty-five (45) Hours of Service for each
week, and one-hundred ninety (190) hours per month for monthly paid
employees, or portion thereof during which he/she is credited with an
Hour of Service for the Company or an Affiliated Company.
(c) Except to the extent the Company shall expressly determine
otherwise or as expressly provided otherwise in this Plan, an Employee
shall not receive credit for his/her Hours of Service completed with an
Affiliated Company or any operating unit or entity employing him/her
prior to the date on or as of which such company, unit or entity
becomes part of or is acquired by the Company or an Affiliated Company.
2.30 Investment Fund.
"Investment Fund" shall mean any of the separate investment funds,
including the Company Stock Fund and mutual funds, established or designated by
the Committee pursuant to Section 5.4 (b) to provide investment alternatives to
Participants for the investment of their Account.
<PAGE>
2.31 Investment Manager.
"Investment Manager" shall mean the one or more Investment Managers, if
any, that are appointed pursuant to Section 9.3.
2.32 Leave of Absence.
"Leave of Absence" shall mean any absence without pay authorized by the
Company or an Affiliated Company under its standard personnel practices. All
persons under similar circumstances shall be treated alike in the granting of
such leaves.
2.33 Normal Retirement Age.
"Normal Retirement Age" shall mean the Participant's sixty-fifth (65th)
birthday provided, however, that Normal Retirement Age for Participants who also
were participants in the Albertson's Employees' Tax Deferred Savings Plan prior
to the Effective Date of this Plan shall mean the Participant's sixty-second
(62) birthday.
2.34 Participant.
"Participant" shall mean any Eligible Employee who is a participant in
the Plan or any Employee who once was but no longer is an Eligible Employee but
who continues to have amounts held in one or more Accounts under the Plan.
2.35 Participant Contributions.
"Participant Contributions" shall mean all of a Participant's
Contributions to the Plan, including Taxed Contributions and Tax Deferred
Contributions.
2.36 Plan.
"Plan" shall mean the Albertson's Savings & Retirement Estates herein
set forth, and as it may be amended from time to time. Prior to the Effective
Date of this restatement, Plan meant American Stores Retirement Estates.
2.37 Plan Administrator.
"Plan Administrator" shall mean the administrator of the Plan, within
the meaning of Section 3 (16) (A) of ERISA. The Plan Administrator shall be the
Company or its delegee.
<PAGE>
2.38 Plan Year.
"Plan Year" shall mean the fiscal year of the Plan, which shall be the
calendar year.
2.39 Reemployment Commencement Date.
"Reemployment Commencement Date" shall mean, in the case of an Employee
whose employment is terminated and who is subsequently reemployed by the Company
or an Affiliated Company, the first day following the termination of his/her
employment on which the Employee is credited with an Hour of Service for the
Company or an Affiliated Company as an Employee.
2.40. Rollover Contributions.
"Rollover Contributions" shall mean:
(i) A contribution by an Eligible Employee as the result of a
distribution from another tax-qualified plan or an individual
retirement account or individual retirement annuity (as defined in Code
Section 408), but only if such contribution consists of amounts
attributable to a "qualified total distribution" from a qualified trust
as such term is defined in Code Section 402 (a) (5) (E) and earnings
thereon or, effective with respect to amounts attributable to
distributions made after December 31, 1992, such contribution consists
of amounts attributable to an "eligible rollover distribution" as
defined in Code Section 402 (c) (4) and earnings thereon;
(ii) A transfer of assets from the trustee of a tax-qualified
retirement plan to the Trustee of this Plan, provided the transaction
satisfies the requirements of Section 10.2; or
(iii) A direct transfer of assets consisting only of amounts
attributable to a qualified total distribution from a qualified trust
and earnings thereon or, effective with respect to amounts attributable
to distribution made after December 31, 1992, amounts attributable to
an eligible rollover distribution, from the trustee of a qualified
trust or, to the extent permitted by law, from the trustee or custodian
of an individual retirement account or individual retirement annuity to
the Trustee.
2.41 Sharing Contributions.
"Sharing Contributions" of a Participant shall mean his/her
Contributions (whether Taxed or Tax Deferred) not in excess of six percent (6%)
of Compensation. Sharing Contributions shall participate in allocations of
Company Contributions and Forfeitures.
<PAGE>
2.42 Suspense Account.
"Suspense Account" shall mean the Account established pursuant to the
provisions of Section 13.4 to hold any excess Annual Additions.
2.43 Tax Deferred Contributions.
"Tax Deferred Contributions" shall mean those contributions made by a
Participant which represent pre-tax contributions.
2.44 Taxed Contributions.
"Taxed Contributions" shall mean those contributions made by a
Participant which represent post-tax contributions.
2.45 Trust and Trust Fund.
"Trust" or "Trust Fund" shall mean the one or more trusts created for
funding purposes under the Plan.
2.46 Trustee.
"Trustee" shall mean the individual or entity acting as a Trustee of
the Trust Fund.
2.47 Valuation Date.
Effective for all additions (including Participant, Company and
Rollover Contributions, loan repayments, repayments of prior distributions under
Section 8.4 (b) and forfeitures allocated under Section 6.3 (a) (i)) to the
Trust from and after October 1, 1992 and effective as of the Effective Date for
all assets of the Trust, "Valuation Date" shall mean the date as of which the
Trustee shall determine the value of the assets in the Trust Fund for purposes
of determining the value of each Account, which shall be each day of a calendar
year on which the New York Stock Exchange is open.
2.48 Year of Service.
(a) Years of Service for purposes of eligibility to participate shall
be computed as follows. Except to the extent the Company shall
expressly determine otherwise or as expressly provided otherwise in
this Plan, an Employee shall not receive credit for his/her Hours of
Service completed with an Affiliated Company or any operating unit or
entity employing him/her prior to the date on or as of which such
company, unit or entity becomes part of or is acquired by the Company
or an Affiliated Company. For periods of service prior to the date on
which the Employee becomes a Participant, the Employee will be deemed
<PAGE>
to have completed a "Year of Service" if he/she completes one thousand
(1,000) or more Hours of Service during the relevant Computation
Period.
(b) For periods of service on or after the date on which the Employee
becomes a Participant, the Employee will receive credit for the elapsed
period of time between the date on which he/she became a Participant
and the date on which his/her employment is terminated.
(c) If the employment of an Employee who has become a Participant is
terminated by reason of a quit, discharge, or retirement during an
absence from work of twelve months or less for any reason other than a
quit, discharge, retirement, or death, and the Employee performs an
Hour of Service within twelve (12) months of the date on which the
Employee was first absent from work, he/she shall be treated as if no
termination had occurred.
(d) For all purposes of this Plan, the period of service of any
Employee who has become a Participant and subsequently incurs a Break
in Service shall be determined by aggregating all separate periods of
service separated by a Break in Service. The period of service of any
Employee who has not become a Participant, does not have to his credit
three Years of Service, and incurs one or more Breaks in Service shall
be determined by disregarding all service before such Break(s) if the
number of consecutive Breaks in Service equals or exceeds the greater
of: five (5) or the Employee's total number of Years of Service before
his Break(s).
(e) An Employee shall be credited with his Years of Service with an
Affiliated Company, but only to the extent that such service would have
been credited under the rules set forth in this Section 2.50.
Notwithstanding the foregoing, unless the Company shall provide by
resolution of its Board of Directors, an Employee shall not receive
credit for his Years of Service with an Affiliated Company for any
period of employment with an Affiliated Company prior to such entity
becoming an Affiliated Company. Effective for any individual who became
an Employee as of the date Lucky Stores Company was acquired by the
Company, such Employee shall be credited with his/her years of service
with Lucky Stores Company for all purposes under this Plan for the
period of employment prior to such acquisition to the extent that such
service would have been credited under the rules set forth in this
Section 2.50.
(f) For any individual who is an Employee on January 1, 1985, his/her
Years of Service shall be the length of his/her service, as determined
under the tax-qualified retirement plan maintained by the Company in
which the individual participated immediately prior to that date.
(g) A Participant's years of participation in the Plan shall be
measured on the basis of the elapsed period of time between his/her
Eligibility Date and the date on which his/her employment is
<PAGE>
terminated, taking into account all periods of service as provided in
Paragraph (d) and disregarding absences of less than twelve (12) months
as provided in Paragraph (c).
<PAGE>
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Participation.
(a) Each Eligible Employee shall become eligible to participate in the
Plan upon the day ("Eligibility Date") the Eligible Employee completes
one (1) Year of Service.
(b) If an Eligible Employee's employment with the Company terminates
after the Employee has become a Participant in the Plan, the Employee
shall become eligible to participate in the Plan immediately upon
his/her Reemployment Commencement Date.
3.2 Participants in Prior Plans.
Any Employee who was at any time eligible to participate in the Jewel
Companies Retirement Estates, the Jewel Supplementary Retirement
Estates, the American Stores Company Retirement Plan, the American
Stores Company Employees' Thrift Plan, the Albertson's Employees' Tax
Deferred Savings Plan, the Albertson's Employees Corporate Pension Plan
or the Albertson's Employees Salaried Employees Pension Plan shall
automatically be eligible to participate in the Plan , provided he/she
is an Eligible Employee.
<PAGE>
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.1 Election.
(a) Each Eligible Employee may elect to defer the receipt of a portion
of his/her Compensation and to have the deferred amount contributed
directly by the Company out of its current or accumulated profits for
the fiscal year ending within that Plan Year to the Plan as Tax
Deferred Contributions. Tax Deferred Contributions may be made only by
means of payroll deduction.
(b) Each Eligible Employee may elect to contribute to the Plan a
portion of his/her Compensation as Taxed Contributions. Taxed
Contributions may be made by means of either payroll deduction or lump
sum contributions. Lump sum contributions are allocated for all
purposes of this Plan to the Plan Year in which received.
(c) The Committee shall prescribe such procedures, either in writing or
in practice, as it deems necessary or appropriate for each Participant
and each Eligible Employee who will become a Participant to make
Contributions pursuant to this Article IV.
4.2 Amount Subject to Election.
(a) Each Participant who is an Eligible Employee may elect to
contribute a whole percentage of his/her Compensation to the Plan as
Tax Deferred Contributions not to exceed sixteen percent (16%) reduced
by the amount of his/her Taxed Contributions. Notwithstanding the
foregoing, no Participant shall be permitted to make Tax Deferred
Contributions to the Plan during any calendar year in excess of Seven
Thousand Dollars ($7,000), or such larger amount as may be determined
by the Secretary of the Treasury pursuant to Code Section 402(g)(2), or
which exceed the limitations set forth in Section 4.3.
(b) Each Participant who is an Eligible Employee may elect to
contribute a whole percentage of his/her Compensation to the Plan as
Taxed Contributions not to exceed sixteen percent (16%), reduced by the
amount of his/her Tax Deferred Contributions. Notwithstanding the
foregoing, no Participant could make Taxed Contributions to the Plan
during any Plan Year which exceed the limitations set forth in Section
4.6.
(c) The Committee shall prescribe such procedures, either in writing or
in practice, as it deems necessary or appropriate regarding the maximum
<PAGE>
amount that a Participant may elect to defer and the timing of such an
election. These procedures shall apply to all individuals eligible to
make an election described in Section 4.1. The Committee may, at any
time during a Plan Year, require the suspension, reduction, or
recharacterization of Tax Deferred Contributions of any Highly
Compensated Participant (as defined in Section 4.3(b)(ii)) such that
the limitations of Section 4.2(a) and (b) are satisfied.
(d) Notwithstanding anything to the contrary in this Section 4.2, a
Participant who ceases to be an Eligible Employee due to termination of
employment (i) after age fifty-seven (57), (ii) by reason of his death
or disability, or (iii) by reason of the sale or transfer of a unit or
operation of the Company or an Affiliated Company to a third party
which is not affiliated in any manner with the Company or an Affiliated
Company, or (iv) by reason of the discontinuance of a unit or operation
of the Company or an Affiliated Company, and who receives Compensation
in the Plan Year of such termination, but after the date of such
termination, for services rendered prior to the date of such
termination may elect to contribute amounts from such Compensation
subject to the limitations prescribed in Paragraphs (a), (b) and (c)
above.
4.3 Limitation on Compensation Deferrals.
With respect to each Plan Year, Compensation Deferral Contributions (as
defined below) by a Participant for the Plan Year shall not exceed the
limitation on contributions by or on behalf of Highly Compensated Participants
under Section 401(k) of the Code, as provided in this Section. In the event that
Compensation Deferral Contributions under this Plan by or on behalf of Highly
Compensated Participants exceed the limitations of this Section for any reason,
either such excess contributions shall be recharacterized as Taxed Contributions
or such excess contributions, adjusted for any income or loss allocable thereto,
shall be returned to the Participant, as provided in Section 4.5.
(a) The Compensation Deferral Contributions by Participants for a Plan
Year shall satisfy the Actual Deferral Percentage Test set forth in (i)
below, or, to the extent not precluded by applicable regulations, the
alternative Actual Deferral Percentage test set forth in (ii) below:
(i) The average Actual Deferral Percentage for the Highly
Compensated Participants shall not be more than the average
Actual Deferral Percentage of all other Participants
multiplied by 1.25, or
(ii) The excess of the average Actual Deferral Percentage for
the Highly Compensated Participants over the average Actual
Deferral Percentage for all other Participants shall not be
more than two (2) percentage points (or such lesser percentage
as the Secretary of the Treasury shall prescribe to prevent
<PAGE>
the multiple use of the alternative limitation set forth in
this Section 4.3(a)(ii) with respect to any Highly Compensated
Participants), and the average Actual Deferral Percentage for
the Highly Compensated Participants shall not be more than the
average Actual Deferral Percentage of all other Participants
multiplied by 2.0.
(iii) In the event the test under (i) above cannot be
satisfied, the Committee shall determine if the use of the
alternative test under (ii) above is available. If the
Committee determines that the alternative test is not
available, either the actual Deferral Percentage or the
Average Contribution Percentage (as defined in Section 4.6)
for Highly Compensated Participants eligible to participate in
this Plan and a plan of the Company or an Affiliated Company
that is subject to the limitations of Section 401(k) and (m)
of the Code including, if applicable, this Plan, shall be
reduced as described below effective for Plan Years beginning
after December 31, 1996, so that there is no multiple use of
the alternative limitation.
(A) The dollar amount of excess Compensation Deferral
Contributions is calculated for each affected Highly
Compensated Employee. The Compensation Deferral
Contributions of the Highly Compensated Participant
with the highest dollar amount of Compensation
Deferral Contributions is reduced by the amount
required to cause the employee's Compensation
Deferral Contributions to equal the dollar amount of
the Highly Compensated Participant with the next
highest dollar amount of Compensation Deferral
Contributions. If a lesser reduction would enable the
arrangement to satisfy the Actual Deferral Percentage
tests, only the lesser reduction shall be made. This
process shall be repeated until the total excess
Compensation Deferral Contributions have been
distributed.
(B) The Contribution Percentage of the Highly
Compensated Participant with the highest dollar
amount Average Contribution Percentage shall be
reduced by the amount required to cause the
employee's Average Contribution Percentage to equal
the dollar amount of the Highly Compensated
Participant with the next highest dollar amount
Average Contribution Percentage. If a lesser
reduction would enable the Plan to satisfy the
Average Contribution Percentage test, only the lesser
reduction shall be made. This process shall be
repeated until the total excess amounts have been
distributed.
(b) For the purposes of the limitations of this Article IV, the
following definitions shall apply:
<PAGE>
(i) "Actual Deferral Percentage" shall mean, with respect to
the group of Highly Compensated Participants for a Plan Year,
the ratio, calculated separately for each Participant in such
group, of the amount of the Participant's Compensation
Deferral Contribution for the current Plan Year, to such
Participant's Compensation for such Plan Year, in accordance
with regulations prescribed by the Secretary of the Treasury
under Code Section 401(k). With respect to all other
Participants, "Actual Deferral Percentage" for a Plan Year
shall mean the ratio, calculated separately for each
participant in such group of the Participant's Compensation
Deferral Contribution for such current Plan Year to such
Participant's Compensation for such Plan Year. To the extent
determined by the Committee and in accordance with regulations
issued by the Secretary of the Treasury, qualified nonelective
contributions on behalf of a Participant that satisfy the
requirements of Code Section 401(k)(3)(D)(ii) may also be
taken into account for the purpose of determining the Actual
Deferral Percentage of such Participant.
(ii) "Highly Compensated Participant" shall mean for any Plan
Year any Participant who is a Highly Compensated Employee.
(iii) "Participant" shall mean any Eligible Employee who
satisfied the requirements under Section 3.1 during the Plan
Year, whether or not such Eligible Employee has elected to
contribute to the Plan for such Plan Year.
(iv) "Compensation Deferral Contributions" shall mean amounts
contributed to the Plan by a Participant as Tax Deferred
Contributions pursuant to Section 4.2(a), including excess Tax
Deferred Contributions, and may include, at the election of
the Company, any Company Contributions which meet the
requirements for such inclusion under Code Section
401(k)(3)(D).
(c) In the event that as of the last day of a Plan Year this Plan
satisfies the requirements of Section 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans which include
arrangements under Code Section 401(k), then this Section 4.3 shall be
applied by determining the Actual Deferral Percentages of Participants
as if all such plans were a single plan in accordance with regulations
prescribed by the Secretary of the Treasury under Section 401(k) of the
Code.
(d) For purposes of this Section 4.3, the "Actual Deferral Percentage"
for any Highly Compensated Participant who is a Participant under two
or more Code Section 401(k) arrangements of the Company shall be
determined by taking into account the Highly Compensated Participant's
compensation under each such arrangement and contributions under each
such arrangement which qualify for treatment under Code Section 401(k),
<PAGE>
in accordance with regulations prescribed by the Secretary of the
Treasury under Section 401(k) of the Code.
(e) For purposes of determining the Actual Deferral Percentage of a
Highly Compensated Participant, the Compensation Deferral Contribution
and Compensation of such Highly Compensated Participant shall include
the Compensation Deferral Contribution and Compensation of "family
members", as such individuals are described in Section 414(q)(6)(B) of
the Code, and such "family members" shall be disregarded in determining
the Actual Deferral Percentage for Participants who are not Highly
Compensated Participants. Notwithstanding the foregoing, this paragraph
shall not apply for Plan Years beginning after December 31, 1996.
(f) The determination and treatment of Compensation Deferral
Contributions and the Actual Deferral Percentage of any Participant
shall satisfy such other requirements as may be prescribed by the
Secretary of the Treasury.
(g) The Committee shall keep or cause to have kept such records as are
necessary to demonstrate that the Plan satisfies the requirements of
Code Section 401(k) and (m) and the regulations thereunder, in
accordance with regulations prescribed by the Secretary of the
Treasury.
(h) Notwithstanding the foregoing, the Actual Deferral Percentage Test
shall be applied separately to the portion of the Plan which covers
Eligible Employees who are not represented in employment by a labor
organization, and, for Plan Years beginning on or after January 1,
1993, shall be applied separately to each portion of the Plan covering
a group of Eligible Employees who are represented in employment by a
labor organization pursuant to a separate collective bargaining
agreement; provided, however, the Company may elect to treat two or
more separate collective bargaining units as a single collective
bargaining unit in accordance with Treasury Regulation Section
1.401(k)-1(g)(11)(ii).
4.4 Provisions for Return of Excess Tax Deferred Contributions over $7,000.
(a) In the event that,due to error or otherwise, an amount of a
Participant's Compensation in excess of the $7,000 limitation (after
application of any necessary adjustment) described in Section 4.2(a) is
deferred under this Plan in any calendar year pursuant to such
Participant's Compensation deferral agreement (but without regard to
amounts deferred under any other plan), the excess Tax Deferred
Contributions, if any, together with income allocable to such amount
shall be returned to the Participant (after withholding applicable
federal, state and local taxes due on such amounts) on or before the
first April 15 following the close of the calendar year in which such
excess contribution is made; provided, however, if there is a loss
allocable to the excess Tax Deferred Contributions, the amount
<PAGE>
distributed shall be the amount of the excess as adjusted to reflect
such loss. Any Company Contributions allocated to the Participant's
Sharing Contributions pursuant to Section 6.3(b) which are attributable
to any excess Tax Deferred Contributions by a Participant, and any
income or loss allocable to such Company Contributions, shall either be
returned to the Company or applied to reduce future Company
Contributions by the Company.
(b) The amount of income or loss attributable to any excess Tax
Deferred Contributions described in Paragraph (a) above shall be equal
to the income or loss allocable to the Participant's Tax Deferred
Contributions Account for the Plan Year multiplied by a fraction, the
numerator of which is the excess Tax Deferred Contributions as
Determined under Paragraph (a) above, and the denominator of which is
the balance of the Participant's Tax Deferred Contributions Account as
of the last day of the Plan Year, reduced by income allocable to such
Account and increased by losses allocable to such Account during the
Plan Year.
(c) In accordance with procedures as may be established, either in
writing or in practice, by the Committee, not later than March 1 of a
calendar year a Participant may submit a claim to the Committee in
which he certifies in writing the specific amount of his Tax Deferred
Contributions for the preceding calendar year which, when added to
amounts deferred for such calendar year under other plans or
arrangements described in Section 401(k), 408(k) or 403(b) of the Code,
will cause the Participant to exceed the $7,000 limitation as described
in Section 4.2(a) for such preceding calendar year. Notwithstanding the
amount of the Participant's Tax Deferred Contributions under the Plan
for such preceding calendar year, the Committee shall treat the amount
specified by the Participant in his claim as a Tax Deferred
Contribution in excess of the $7,000 limitation (after application of
any necessary adjustment) for such calendar year and return it to the
Participant in accordance with Section 4.4(a) above. The amount of Tax
Deferred Contributions in excess of the $7000 limit as described in
Section 4.2(a) that may be distributed with respect to a Participant
for a taxable year shall be reduced by any excess Compensation Deferral
Contributions previously distributed with respect to the Participant
for the Plan Year beginning with or within the taxable year.
(d) Any Tax Deferred Contributions in excess of the $7,000 limitation
(after application of any necessary adjustment) described in Section
4.2(a) which are distributed to a Participant in accordance with this
Section, shall to the extent required by regulations issued by the
Secretary of the Treasury be treated as Annual Additions under Article
XIII for the Plan Year for which the excess Tax Deferred Contributions
were made.
(e) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable), for any losses caused by a mistake in
<PAGE>
calculating the amount of any Participant's excess Tax Deferred
Contributions or the income or losses attributable thereto.
4.5 Provision for Recharacterization or Return of Excess Deferrals by
Highly Compensated Participants.
The provisions of this Section 4.5 shall be applied after
implementation of the provisions of Section 4.4.
(a) The Committee shall determine in accordance with the procedures set
forth in Section 4.3, as soon as is reasonably possible following the
close of each Plan Year, the extent (if any) to which deferral
treatment under Code Section 401(k) may not be available for
Compensation Deferral Contributions on behalf of any Highly Compensated
Participants. If, pursuant to these determinations by the Committee, a
Highly Compensated Participant's Compensation Deferral Contributions
are not eligible for tax deferral treatment then, as determined by the
Committee, either (1) any excess Compensation Deferral Contributions
shall be recharacterized as Taxed Contributions in accordance with
regulations issued under Code Section 401(k), or (2) any excess
Compensation Deferral Contributions together with any income or loss
allocable thereto shall be returned to the Highly Compensated
Participant (after withholding applicable federal, state and local
taxes due on such amounts). Such return or recharacterization shall be
made within the first two and one-half (2-1/2) months following the
close of the Plan Year for which such excess deferrals were made,
provided, however, that if any excess deferrals and income or loss
allocable thereto are, due to error or otherwise, not returned by such
date, such amounts as are required to be returned shall be returned not
later than the end of the first Plan Year following the Plan Year for
which such excess deferrals where made.
(b) For purposes of satisfying the Actual Deferral Percentage test of
Section 4.3(a), the amount of any excess Compensation Deferral
Contributions by a Highly Compensated Participant shall be determined
by the Committee by application of the leveling method set forth in
regulations prescribed by the Secretary of the Treasury under Section
401(k) of the Code. The amount of any excess Compensation Deferral
Contributions is the dollar amount by which a Highly Compensated
Participant's Compensation Deferral Contributions must be reduced based
on the calculations in Sections 4. 3(a)(iii)(A) This process shall be
repeated until the Plan satisfies the Actual Deferral Percentage Test.
In the event a Highly Compensated Participant's Actual
Deferral Percentage is determined under Section 4.3(e) above ("family
aggregation rules"), excess Compensation Deferral Contributions shall
be determined by reducing the Actual Deferral Percentage in accordance
with the "leveling" method described in Treasury Regulation Section
1.401(k) - 1(f)(2) and the excess Compensation Deferral Contributions
<PAGE>
shall be allocated among the family members in proportion to the
Compensation Deferral Contributions of each family member that have
been combined. Notwithstanding the foregoing, the family aggregation
rules shall not apply for Plan Years beginning after December 31, 1996.
(c) The amount of income or loss attributable to any excess
Compensation Deferral Contributions by a Highly Compensated Participant
for a Plan Year shall be equal to the income or loss allocable to the
Highly Compensated Participant's Compensation Deferral Contribution
Accounts for the Plan Year multiplied by a fraction, the numerator of
which is the excess Compensation Deferral Contribution as determined
under Section 4.3, and the denominator of which is the balance of the
Highly Compensated Participant's Compensation Deferral Contribution
Accounts as of the last day of the Plan Year reduced by income
allocable to such Accounts and increased by losses allocable to such
Accounts during the Plan Year.
(d) For the purpose of this Section 4.5, "Compensation Deferral
Contribution Accounts" shall mean the Participant's Tax Deferred
Contributions Account and shall mean any other accounts of the
Participant to which Company Contributions have been allocated where
such Company Contributions have been included as Compensation Deferral
Contributions pursuant to Section 4.3(b)(iv).
(e) For purposes of this Section, the amount of Compensation Deferral
Contributions by a Participant who is not a Highly Compensated
Participant for a Plan Year shall be reduced by any Tax Deferred
Contributions which have been distributed to the Participant under
Section 4.4, in accordance with regulations prescribed by the Secretary
of the Treasury under Section 401(k) of the Code.
(f) In the event that the Committee determines that an amount to be
deferred pursuant to the Compensation deferral agreement provided in
Section 4.1 would cause the Company contributions under this and any
other tax-qualified retirement plan maintained by the Company to exceed
the applicable deduction limitations contained in Code Section 404, or
to exceed the maximum Annual Addition determined in accordance with
Article XIII, the Committee may treat such amount in accordance with
the rules set forth above in Section 4.5(a).
(g) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable) for any losses caused by a mistake in
calculating the amount of any Participant's excess Compensation
Deferral Contribution or the income or losses attributable thereto.
(h) To the extent required by regulations under Section 401(k) or 415
of the Code, any excess Compensation Deferral Contributions with
respect to a Highly Compensated Participant shall be treated as Annual
Additions under Article XIII for the Plan Year for which the excess
Compensation Deferral Contributions were made, notwithstanding the
<PAGE>
distribution of such excess in accordance with the provisions of this
Section.
4.6 Limitations on Taxed Contributions and Company Contributions.
With respect to each Plan Year, Taxed Contributions and Company Match
on Contributions under the Plan for the Plan Year shall not exceed the
limitations by or on behalf of Highly Compensated Participants under Section
401(m) of the Code, as provided in this Section. In the event that Taxed
Contributions and Company Match on Contributions under this Plan by or on behalf
of Highly Compensated Participants for any Plan Year exceed the limitations of
this Section for any reason, such excess Taxed Contributions and Company Match
on Contributions and any income or loss allocable thereto shall be disposed of
in accordance with Section 4.7.
(a) The Taxed Contributions by Participants and Company Match on
Contributions on behalf of Participants for a Plan Year shall satisfy
the Average Contribution Percentage test set forth in (i) below, or to
the extent not precluded by applicable regulations, the alternative
Average Contribution Percentage test set forth in (ii) below:
(i) The "Average Contribution Percentage" for the Highly
Compensated Participants shall not be more than the Average
Contribution Percentage of all other Participants multiplied
by 1.25, or
(ii) The excess of the Average Contribution Percentage for the
Highly Compensated Participant over the Average Contribution
Percentage for all other Participants shall not be more than
two (2) percentage points (or such lesser percentage as the
Secretary of the Treasury shall prescribe to prevent the
multiple use of the alternative limitation set forth in this
Section 4.6(a)(ii) with respect to any Highly Compensated
Participant), and the Average Contribution Percentage of the
Highly Compensated Participant shall not be more than the
Average Contribution Percentage of all other Participants
multiplied by 2.0.
(iii) In the event the test under (i) above cannot be
satisfied, the Committee shall determine if the use of the
alternative test under (ii) above is available under
regulations relating to the multiple use of the alternative
limitation, as prescribed by the Secretary of the Treasury
under Code Section 401(m)(2)(A). If the Committee determines
that the alternative test is not available, either the Actual
Deferral Percentage or the Average Contribution Percentage for
Highly Compensated Participants eligible to participate in
this Plan and a plan of the Company or an Affiliate Company
that is subject to the limitation of Sections 401(k) and (m)
of the Code, including, if applicable, this Plan, shall be
<PAGE>
reduced in accordance with, and to the extent necessary to
satisfy, the requirements of Treasury Rregulations under Code
Section 401(m).
(b) For purposes of Section 4.6 and 4.7, the following definitions
shall apply:
(i) "Average Contribution Percentage" shall mean, with respect
to a group of Participants for a Plan Year, the average of the
"Contribution Percentage" in such group. The "Contribution
Percentage" for any Participant is determined by dividing the
sum of the Participant's Taxed Contributions and Company Match
on Contributions under the Plan on behalf of such Participant
for such Plan Year by such Participant's Compensation for the
Plan Year in accordance with regulations prescribed by the
Secretary of the Treasury under Code Section 401(m). To the
extent determined by the Committee and in accordance with
regulations issued by the Secretary of the Treasury under Code
Section 401(m)(3), Tax Deferred Contributions and any
qualified nonelective contributions, within the meaning of
Code Section 401(m)(4)(C) on behalf of a Participant may also
be taken into account for purposes of calculating the
Contribution Percentage of a Participant, but shall not
otherwise be taken into account. However, if any Company
Contributions are taken into account for purposes of
determining Actual Deferral Percentages under Section 4.3 then
such Company Contributions shall not be taken into account
under this Section 4.6.
(ii) "Highly Compensated Participant" shall mean for any Plan
Year any Participant who is a Highly Compensated Employee.
(iii) "Participant" shall mean any Eligible Employee who
satisfied the requirements under Section 3.1 during the Plan
Year whether or not such Eligible Employee has elected to
contribute to the Plan for such Plan Year.
(iv) "Company Match on Contributions" shall mean the Company
Contributions allocated to a Participant's Company Match on
Contributions Account pursuant to Section 6.3(b) of the Plan.
(c) For the purposes of this Section 4.6, if two or more plans
described in Code Section 401(a) are considered one plan for the
purposes of Section 401(a)(4) or 410(b), the Contribution Percentages
of Participants shall be treated as made under one plan.
(d) For the purposes of this Section 4.6, the Contribution Percentage
for any Participant who is a Highly Compensated Participant under two
or more plans qualified under Code Section 401(a) of the Company or an
Affiliated Company shall to the extent required by Code Section 401(m),
<PAGE>
be determined by taking into account the Participant after-tax
voluntary contributions and Company matching contributions for such
Participant under each of such plans.
(e) For purposes of determining the Contribution Percentage of a
Participant who is a Highly Compensated Participant, the Taxed
Contributions, Company Match on Contributions and Compensation of such
Participant shall include the voluntary contributions, Company Match on
Contributions and Compensation of "family members", as such individuals
are described in Section 414(q)(6)(B) of the Code and such "family
members" shall be disregarded in determining the Contribution
Percentage for Participants who are not Highly Compensated
Participants. Notwithstanding the foregoing, this paragraph shall not
apply for Plan Years beginning after December 31, 1996.
(f) The determination and treatment of the Contribution Percentage of
any Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
(g) The Committee shall keep or cause to have kept such records as are
necessary to demonstrate that the Plan satisfied the requirements of
the Code Section 401(m) and the regulations thereunder, in accordance
with regulations prescribed by the Secretary of the Treasury.
(h) Notwithstanding the general Effective Date of this Plan, the
provisions of this Section 4.6 shall be effective January 1, 1987.
4.7 Provision for Disposition of Excess Taxed Contributions or Company
Match on Contributions on Behalf of Highly Compensated Participants.
After application of the provisions of Section 4.4 and 4.5, the
following provisions shall be implemented:
(a) The Committee shall determine, as soon as is reasonably possible
following the close of each Plan Year, the extent (if any) to which
contributions by or on behalf of Highly Compensated Participants may
cause the plan to exceed the limitations of Section 4.6 for such Plan
Year. If, pursuant to the determination by the Committee and as
required by the leveling method described in subsection (b) below,
contributions by or on behalf of a Highly Compensated Participant may
cause the Plan to exceed such limitations, then the Committee shall
take the following steps:
(i) First, any excess Taxed Contributions that were not
matched by Company Match on Contributions, together with
income or loss allocable to such amount (determined in
accordance with (c) below) shall be returned to the Highly
Compensated Participant.
<PAGE>
(ii) Second, if any excess remains after the provisions of (i)
above are applied, to the extent necessary to eliminate the
excess, Company Match on Contributions on Tax Deferred
Deposits by Highly Compensated Participants returned pursuant
to Section 4.4 or 4.5, and any income or loss allocable
thereto, shall either be distributed (if non-forfeitable) to
the Highly Compensated Participant or forfeited (to the extent
forfeitable under the Plan).
(iii) Third, if any excess remains after the provisions of (i)
and (ii) above are applied, to the extent necessary to
eliminate the excess, Company Match on Contributions on Taxed
Contributions by Highly Compensated Participants, any
corresponding matched Taxed Contributions, and any income or
loss allocable thereto, shall either be distributed (if
non-forfeitable) to the Highly Compensated Participant or
forfeited (to the extent forfeitable under the Plan), on a pro
rata basis.
(iv) Fourth, if any excess remains after the provisions of
(i), (ii) and (iii) above are applied, to the extent necessary
to eliminate the excess, Company Match on Contributions on Tax
Deferred Contributions by Highly Compensated Participants not
returned pursuant to Section 4.4 or 4.5, and any income or
loss allocable thereto, shall either be distributed (if
non-forfeitable) to the Highly Compensated Participant or
forfeited (to the extent forfeitable under the Plan).
(v) Amounts of excess Company Match on Contributions forfeited
by Highly Compensated Participants under this Section 4.7,
including any income or loss allocable thereto, shall be
applied to reduce Company Match on Contributions by the
Company or the Affiliated Company that made the Matching
Contribution on behalf of the Highly Compensated Participant
for the Plan Year for which the excess contribution was made.
(vi) If administratively feasible, any amounts distributed
pursuant to Subparagraphs (i), (ii), (iii) and (iv) shall be
returned within two and one-half (2-1/2) months following the
close of the Plan Year for which such excess Taxed
Contributions or Company Match on Contributions were made, but
in any event no later than the end of the first Plan Year
following the Plan Year for which the excess Taxed
Contributions or Company Match on Contributions were made. Any
distribution or forfeiture of excess Taxed Contributions and
Company Match on Contributions for any Plan Year shall be made
on the basis of the respective portions of such excess Taxed
Contributions and Company Match on Contributions attributable
to each Highly Compensated Participant.
<PAGE>
(b) For purposes of satisfying the Average Contribution Percentage
test, the amount of any excess Taxed Contributions or Company Match on
Contributions by or on behalf of Highly Compensated Participants for a
Plan Year under Section 4.6 shall be determined by the Committee using
the leveling method set forth in regulations prescribed by the
Secretary of the Treasury under Section 401(m) of the Code. The amount
of any excess Taxed Contributions or Company Match on Contributions is
the amount by which the Highly Compensated Participant's Taxed
Contributions or Company Match on Contributions must be reduced for the
Highly Compensated Participant's Average Contribution Percentage to
equal the highest permitted Average Contribution Percentage under the
Plan. To calculate the highest permitted Average Contribution
Percentage, the Average Contribution Percentage of the Highly
Compensated Participant with the highest dollar amount of Taxed
Contributions or Company Match on Contributions is reduced by the
amount required to cause the Highly Compensated Participant's Taxed
Contributions or Company Match on Contributions to equal the dollar
amount of the Highly Compensated Participant with the next highest
dollar amount of Taxed Contributions or Company Match on Contributions.
This process shall be repeated until the total excess Taxed
Contributions or Company Match on Contributions have been distributed.
In the event a Highly Compensated Participant's Average
Contribution Percentage is determined under Section 4.6(e) above
("family aggregation rules"), excess Company Match on Contributions and
Taxed Contributions shall be determined by reducing the Average
Contribution Percentage in accordance with the "leveling" method
described in Treasury Regulation Section 1.401(m) - 1(e)(2) and the
excess Company Match on Contributions and Taxed Contributions shall be
allocated among the family members in proportion to the Company Match
on Contributions and Taxed Contributions of each family member that
have been combined. Notwithstanding the foregoing, the family
aggregation rules shall not apply for Plan Years beginning after
December 31, 1996.
(c) The amount of income or loss attributable to any excess Taxed
Contributions or Company Match on Contributions, as determined under
Paragraph (b) above, (the "Excess Aggregate Contribution"), by a Highly
Compensated Participant for a Plan Year shall be equal to the income or
loss allocable to the Highly Compensated Participant's Excess Aggregate
Contribution Accounts for the Plan Year multiplied by a fraction, the
numerator of which is the Excess Aggregate Contribution and the
denominator of which is the sum of the balance of the Highly
Compensated Participant's Excess Aggregate Contribution Accounts as of
the last day of the Plan Year reduced by income allocable to such
Accounts and increased by losses allocable to such Accounts during the
Plan Year.
<PAGE>
(d) For the purpose of this Section 4.7, "Excess Aggregate Contribution
Accounts" shall mean the Participant's Taxed Contributions Account and
the Company Match on Contributions Account.
(e) Any excess Taxed Contributions and/or Company Match on
Contributions distributed to a Highly Compensated Participant or
forfeited by a Highly Compensated Participant in accordance with this
Section 4.7, shall to the extent required by regulations issued by the
Secretary of the Treasury, be treated as Annual Additions under Section
2.5 for the Plan Year for which the excess contribution was made.
(f) The Committee shall not be liable to any Participant (or his/her
Beneficiary, if applicable) for any losses caused by a mistake in
calculating the amount of any Excess Aggregate Contributions by or on
behalf of a Highly Compensated Participant and the income or loss
allocable thereto.
(g) Notwithstanding the general Effective Date of this Plan, the
provisions of this Section 4.7 shall be effective January 1, 1987.
4.8 Termination of, Change in Rate of, or Resumption of Deferrals.
(a) A Participant may elect to change the rate or form of investment of
Tax Deferred Contributions or Taxed Contributions at any time. Any such
change shall be effective as soon as practicable following any such
election, but normally not later than the first day of the second
payroll period following the date such election is made.
Notwithstanding the foregoing, a Participant shall change the rate of
his Tax Deferred or Taxed Contributions as may be required pursuant to
Section 4.2.
(b) Except as provided in Section 4.2(d), the right of a Participant to
make Contributions shall cease upon termination of employment by the
Company. A Participant who is on a Leave of Absence, however, may
continue to make Contributions during such period.
<PAGE>
4.9 Character of Contributions.
Tax Deferred Contributions shall be treated as Company Contributions
for purposes of Code Sections 401(k) and 414(h). Taxed Contributions shall not
constitute "qualified voluntary employee contributions" under Code Section 219
(relating to the deductibility of those amounts).
4.10 Rollover Contributions.
(a) Pursuant to procedures as the Committee may prescribe (either in
writing or in practice), an Eligible Employee may make a Rollover
Contribution to the Plan.
(b) Any Rollover Contribution to the Plan must be made in the form of
cash.
(c) A Rollover Contribution shall not be considered a Participant
Contribution.
(d) A Participant's Rollover Contribution made pursuant to the rules of
this Section 4.10 shall be held in a separate Rollover Contribution
Account for the Employee. This Rollover Contribution Account will not
share in allocations of Company Contributions or Forfeitures under
Section 6.3.
<PAGE>
ARTICLE V
TRUST FUND AND COMPANY CONTRIBUTIONS
5.1 Trust Fund.
The Company has entered into a Trust Agreement for the establishment of
a Trust to hold the assets of the Plan. The Trustee has agreed to hold and
administer all funds and assets that may be deposited with the Trustee pursuant
to the terms of this Plan.
5.2 Company Contributions.
The Board of Directors shall contribute an amount on behalf of each
Plan Year determined in its sole discretion. The amount of this contribution,
however, shall not exceed the lesser of (a) the amount of its Earnings for its
fiscal year beginning within that Plan Year, or (b) the maximum deductible
amount determined under Code Section 404.
5.3 Form of Company Contributions.
The Company's contributions to the Trust Fund shall be paid in cash or
Company Stock as the Company may from time to time determine.
5.4 Investment of Trust Assets.
(a) The manner in which assets of the Trust will be invested shall be
chosen by the Committee at its discretion, although the Committee may
delegate the management to one or more Investment Managers appointed
pursuant to Section 9.3.
(b) The Committee may establish separate Investment Funds under the
Plan, with each fund representing an investment alternative available
to Participants and Eligible Employees for the investment of their
Accounts as provided in Sections 5.4(c) and (d) below. Each Participant
and Eligible Employee shall have a subaccount under the Plan
corresponding to such individual's interest, if any, which is allocated
to each Investment Fund. Each such subaccount shall be measured in Fund
Units except for Company stock which shall be valued in shares. The
Committee may, at its discretion, establish alternative Investment
Funds or eliminate any previously established funds, including but not
limited to the following types of Investment Funds:
<PAGE>
(i) The Regular (Balanced) Fund consisting of stocks, bonds,
real estate, and other securities including obligations of the
United States Government and its agencies and short-term
liquid investments;
(ii) The Fixed Income Fund consisting of bonds and other
securities including obligations of the United States
Government and its agencies and short-term liquid investments;
(iii) The Company Stock Fund invested in Company Stock and
short-term liquid investments;
(iv) The Short Maturity Fund invested in short-term fixed
income investments and other securities including obligations
of the United States Government and its agencies and
short-term liquid investments; and
(v) The All Equity Fund invested exclusively in stocks and
short-term liquid investments; and
(vi) one or more mutual funds or other investment funds
selected by the Committee.
(c) A Participant may elect the Investment Fund to which his/her Tax
Deferred Contributions or Taxed Contributions are made under the Plan
or may change such elections pursuant to Section 4.8(a). An Eligible
Employee may elect the Investment Fund to which his/her Rollover
Contribution is made under the Plan. Any such elections shall be
limited to the Investment Funds currently offered by the Committee and
currently available pursuant to Paragraph (b) above. A Participant or
Eligible Employee, as applicable, shall effect any such elections in
the manner prescribed by the Committee.
(d) Company Contributions allocated to a Participant's Accounts in a
Plan Year shall be invested in the same manner as the most recent
election made by the Participant and on file with the Company for the
Participant's Tax Deferred Contributions and Taxed Contributions
pursuant to Paragraph (c) above. If the Participant has elected to
invest his/her Tax Deferred Contributions and Taxed Contributions in
more than one Investment Fund, Company Contributions shall be allocated
among the Investment Funds in which the Tax Deferred Contributions and
Taxed Contributions of such Participant are invested in respective
percentages determined with respect to each such Investment Fund equal
to the percentage of the sum of such Participant's Tax Deferred
Contributions and Taxed Contributions which are invested in each such
Investment Fund pursuant to his/her election under Paragraph (c). If a
Participant has made no such Contributions, he/she may direct the
investment of such Company Contributions allocated to his/her Accounts
by making an election in the same manner as provided under Paragraph
(c) above. If there is no valid election on file for such Participant,
<PAGE>
such Company Contributions for such Participant shall be invested
entirely in the Janus Balanced Fund, Founders Balanced Fund and Invesco
Total Return Fund, unless and until the Participant directs otherwise.
(e) A Participant or Eligible Employee, as applicable, may elect to
exchange up to one hundred percent (100%) of the amounts accrued in
such individual's accounts once each calendar days among any of the
Investment Funds currently offered by the Committee and currently
available to such individual. A Participant or Eligible Employee shall
effect such an exchange in the manner prescribed by the Committee. To
the extent there is insufficient liquidity in the Trust, transactions
described in this Section 5.4(e) may be suspended for a term certain or
queued on a first come-first served basis as such liquidity is
restored.
(f) Amounts invested in any one of the Investment Funds shall not share
in gains and losses experienced by any other fund.
(g) Notwithstanding the establishment of separate Investment Funds
within the Trust, the Trust shall at all times constitute a single
trust.
5.5 Company Stock Fund.
(a) The Company Stock Fund ("Stock Fund") shall be invested in Company
Stock and short-term liquid investments in amounts needed to satisfy
the liquidity needs of the Stock Fund for exchanges, distributions and
the exercise of stock rights, warrants or options issued on Company
Stock. The extent to which this fund is invested in short-term liquid
investments shall be as agreed from time to time between the Committee
and the Trustee. The Trustee shall be responsible to maintain liquidity
in the Stock Fund to the extent agreed upon with the Committee.
(b) In the event any rights, warrants, or options are issued on Company
Stock, the Trustee shall exercise them for the acquisition of
additional Company Stock for the Stock Fund as directed by the
Committee to the extent that cash is then available in the Stock Fund.
(c) Any Company Stock received by the Trustee as a stock split,
dividend, or as a result of a reorganization or other recapitalization
of the Company shall be added to the Stock Fund.
(d) All cash dividends paid to the Trustee with respect to Company
Stock shall be applied by the Trustee to purchase additional shares of
Company Stock for the Stock Fund or shall be used to provide liquidity
for the Stock Fund in accordance with Paragraph (a).
<PAGE>
5.6 Irrevocability.
The Company shall have no right or title to, nor interest in, the
contributions made to the Trust Fund, and no part of the Trust Fund shall revert
to the Company except that on and after January 1, 1989, funds may be returned
to the Company as follows:
(a) In the case of a Company Contribution which is made by a mistake of
fact, at the Company's written request, that contribution may be
returned to the Company within one (1) year after it is made.
(b) All Company Contributions to the Trust are hereby conditioned upon
the Plan satisfying all of the requirements of Code Section 401(a).
(c) All Company Contributions to the Plan are conditioned upon the
deductibility of those contributions under Code Section 404. To the
extent a deduction is disallowed, at the Company's written request the
contribution may be returned to the Company within one (1) year after
the disallowance.
(d) In the event that the Plan is terminated when there are amounts
remaining in the Suspense Account, the excess funds may revert to the
Company to the extent provided in Section 13.4(i).
5.7 Company, Committee and Trustee Not Responsible for Adequacy of Trust
Fund.
(a) The Company, Committee, and the Trustee shall not be liable or
responsible for the adequacy of the Trust Fund to meet and discharge
any or all payments and liabilities hereunder. All Plan benefits will
be paid only from the Trust assets, and neither the Company, the
Committee, nor the Trustee shall have any duty or liability to furnish
the Trust with any funds, securities, or other assets except as
expressly provided in the Plan.
(b) Except as required under the Plan or Trust or under Part 4 of
Subtitle B of Title I of ERISA, the Company shall not be responsible
for any decision, act or omission of the Trustee, the Committee, or the
Investment Manager (if applicable), and shall not be responsible for
the application of any moneys, securities, investments or other
property paid or delivered to the Trustee.
<PAGE>
ARTICLE VI
ACCOUNTS AND ALLOCATIONS
6.1 Participants' Accounts.
In order to account for the allocated interest of each Participant in
the Trust Fund, there shall be established and maintained for each Participant
(making such form of contribution or as otherwise applicable) the Accounts
enumerated in Section 2.1 hereof.
6.2 Allocation of Amounts Contributed by Participants.
All Taxed Contributions and Tax Deferred Contributions contributed by a
Participant shall be allocated to the separate Account established and
maintained for the Participant for such form of contributions. Such
contributions shall be paid by the Company to the Trustee as soon as practicable
after such amounts are withheld from the Participant's paychecks.
6.3 Allocation of Company Contributions and Forfeitures.
(a) (i) Any Forfeitures occurring during the Plan Year and all
Company Contributions shall first be used to restore the
Accounts of rehired Participants pursuant to the rules of
Section 8.4.
(ii) If any Forfeitures remain after application of
Subparagraph (i), such funds shall be allocated to the
appropriate Accounts of Participants to the extent necessary
to correct insufficient allocations made to such Accounts in
prior periods discovered during the Plan Year to which such
Forfeitures are attributable.
(iii) Any Company Contributions and Forfeitures which remain
after the application of Subparagraphs (i) and (ii) above
shall be allocated in accordance with the following provisions
of this Section 6.3.
(b) The Company's contribution (if any) determined under the rules of
Section 5.2 and the remaining Forfeitures shall be allocated in two
parts as determined by the Company in accordance with the rules of this
Paragraph (b).
(i) Part 1 of the Company's contribution shall be allocated to
the Company Match on Contributions Account of each Participant
who made Sharing Contributions (whether Tax Deferred
Contributions or Taxed Contributions) during the Plan Year.
<PAGE>
The portion of the total amount that will be allocated to the
Account of a Participant will be the same ratio as the amount
of the Participant's Sharing Contributions during the Plan
Year (which have not been withdrawn by the Participant
pursuant to Section 8.1(other than withdrawals pursuant to
Section 8.1(f)) or returned pursuant to Section 4.4, 4.5, or
4.7), bear to the total amount of all such Sharing
Contributions of all Participants
(ii) Part 2 of the Company's Contribution determined under the rules of
Section 5.2 shall be allocated in accordance with the rules of this
Paragraph (c). This amount shall be allocated to the Company
Contribution on Pay Account or, in the case of a Participant on a
Disability Leave of Absence on or after October 1, 1992, the Company
Contribution on Pay (Fully Vested) Account, of each eligible
Participant, whether or not he/she made any Sharing Contributions for
that Plan Year.
(A) First, a portion of this amount shall be allocated to the
appropriate account, as indicated above, of each Participant
who received Noncovered Compensation during the Plan Year
while a Participant and Eligible Employee. The amount that
will be allocated to each such Participant will be determined
by multiplying his/her Noncovered Compensation by the
Noncovered Compensation Percentage. "Noncovered Compensation"
shall mean that portion of a Participant's Compensation
received while a Participant and Eligible Employee which is in
excess of the maximum amount that may be treated as "wages"
subject to Social Security taxes determined as of the
beginning of any such Plan Year. The Noncovered Compensation
Percentage shall mean the greater of 5.7% or the percentage
equal to the portion of the rate of tax under Code Section
3111(a) (in effect as of the beginning of the Plan Year) which
is attributable to old-age insurance, provided, however, if
such Noncovered Compensation Percentage is greater than the
Total Compensation Percentage (as defined in Subparagraph
(b)(ii)(B), then such Noncovered Compensation Percentage shall
be adjusted pursuant to Subparagraph (c)(ii).
(B) Next, the portion of the remaining amount of the Company
Contribution shall be allocated to the appropriate Accounts,
as indicated above, of Participants. Such allocation for each
Participant shall be equal to the Total Compensation
Percentage multiplied by the Participant's Compensation of the
Plan Year received while both a Participant and Eligible
Employee. "Total Compensation Percentage" shall mean the
portion of the remaining amount of the Company Contribution
(after application of Subparagraph (A) above), divided by the
total amount of all Participants' Compensation for the Plan
Year received while both Participants and Eligible
Employees. Notwithstanding the foregoing, should the
Noncovered Compensation Percentage be greater than the Total
<PAGE>
Compensation Percentage, both such percentages shall be
adjusted such that both equal the following:
(Part 2 of Company Contribution) / (Compensation of
all Participants + Noncovered Compensation of all
Participants)
The Part 2 of the Company Contribution shall then be
reallocated in the same manner as provided in this
Subparagraph (A) and Subparagraph (B) above, using
such adjusted Noncovered Compensation Percentage and
Total Compensation Percentage.
(C) Effective January 1, 1991, for purposes of this Paragraph
(c), a Participant who is an Eligible Employee and who is on a
Disability Status for any Plan Year or portion thereof, shall
be deemed to have received Compensation (and Noncovered
Compensation, if applicable) in an amount equal to his/her
annualized base salary determined immediately prior to
becoming disabled. Such deemed Compensation shall be reduced
by the amount of any disability benefits taken into account as
Compensation. The Participant will receive such deemed
Compensation in whole year increments for the Plan Year in
which he/she became disabled and for a period (the "Period")
commencing with the Plan Year immediately following the Plan
Year in which the Participant became disabled through the Plan
Year prior to the Plan Year in which the Participant returns
to employment from his/her disability. The Participant's
deemed Compensation for such Plan Year of return shall equal
the whole year deemed Compensation multiplied by a fraction,
the numerator of which is the number of whole months of such
Participant's absence for such Year and the denominator of
which is twelve (12). The Period shall not exceed the number
of Years of Service the Participant has accrued at the
beginning of such Period for vesting purposes, except that if
the Participant has ten (10) or more of such Years of Service,
the Period shall continue until the earlier of the date on
which the Participant reaches age fifty-seven (57) or dies.
(D) The rules of this Paragraph (d) regarding Participants on
Disability Status shall be applied in a manner consistent with
the provisions of Code Section 415(c)(3)(C). For Plan Years
beginning before January 1, 1997, , the deemed Compensation
rules of Subparagraph (C) shall not apply with respect to any
Participant who is an officer, owner, or Highly Ccompensated
Employee, within the meaning of Code Section 415(c)(3)(C).
(c) Notwithstanding the above, if an "Accrued Contribution" on behalf
of an individual exists for the Plan Year during the period while the
individual was a Participant, the total allocation on behalf of the
Participant (determined under the rules of Paragraphs (b) and (c)
<PAGE>
above) shall be reduced (but not below zero) by the Participant's
Accrued Contribution. For the purpose of this Paragraph (d), "Accrued
Contribution" shall mean (i) an obligation by the Company, pursuant to
a collective bargaining agreement, to make a contribution on behalf of
a Participant to another tax-qualified retirement plan during the Plan
Year, and/or (ii) a deemed obligation by the Company to make such a
contribution, pursuant to an agreement between the Participant's
employer and the respective collective bargaining unit which specifies
the amount of such deemed obligation, although no such contribution was
actually made because the Company was not currently required to
contribute to another tax-qualified retirement plan due to the
overfunded status of such plan, even though such Participant continued
to accrue additional benefits under such plan.
(d) Notwithstanding the above, a Participant shall not be entitled to
share in an allocation under Paragraphs (b) or above for a particular
Plan Year unless that Participant is employed by the Company as an
Eligible Employee on the last day of that Plan Year. However, the rule
in the preceding sentence shall not apply to a Participant who is an
Eligible Employee and whose employment with the Company and all
Affiliated Companies is terminated during the Plan Year (i) after age
fifty-seven (57), (ii) by reason of his death or Disability, (iii) by
reason of the sale or transfer of a unit or operation of the Company or
an Affiliated Company to a third party which is not affiliated in any
manner with the Company or an Affiliated Company, or (iv) by reason of
the discontinuance of such unit or operation. Any such Participant
shall be entitled to share in an allocation under Paragraph (b)or above
for the Plan Year in which such termination occurs and with respect to
all Compensation actually paid to such Participant while both a
Participant and an Eligible Employee or after termination of employment
in such Plan Year.
(e) The allocations of Company Contributions under this Section 6.3
shall be made after the allocations required by Sections 6.4 and 13.4
have been made.
(f) Notwithstanding the above, if a Participant leaves Eligible
Employee status during a Plan Year but continues to remain an Employee
through the last day of such Plan Year, such Participant shall be
entitled to share in an allocation under Paragraphs (b)or above based
only on the Compensation of such Participant for the period of time
during such Plan Year that such Participant was an Eligible Employee.
(g) Notwithstanding anything to the contrary in this Section 6.3,
allocations of Company Contributions made pursuant to Paragraph (b) or
(c) above may be adjusted such that allocations to Participants who are
Highly Compensated Employees as compared to allocations to Participants
who are not Highly Compensated Employees when expressed as a percentage
<PAGE>
of Compensation may differ in order to satisfy the requirements of Code
Section 410(b) and the regulations thereunder.
6.4 Valuation of Participants' Accounts.
On each Valuation Date, the Trustee shall value the assets of the Trust
on the basis of fair market values. Each separate Investment Fund shall be
valued separately and the net asset value ("NAV") of each outstanding Fund Unit
or in the case of the Company Stock Fund, the value of each share for each
Investment Fund shall be determined. The valuation and allocation provisions of
this Section 6.4 shall be applied and implemented in accordance with the
following rules:
(a) The Trustee shall determine the fair market value of each
Investment Fund as of each Valuation Date, taking into account any
increase or decrease in the market value of the assets of any such
Investment Fund, any dividends, interest or other income received by
such Investment Fund, any loss or expense attributable to Trust
expenses that were not paid by the Company, and any other gains or
losses allocable to such Investment Fund. The net income or loss of any
Investment Fund for any Valuation Date shall not include the following
transactions ("Transactions") made as of such date:
(i) Company or Participant Contributions, Rollover
Contributions, distributions recontributed pursuant to Section
8.4(b), forfeitures allocated to Participants' Accounts
pursuant to Section 6.3(a)(i) or loan repayments by
Participants;
(ii) Distributions, withdrawals, forfeitures of nonvested
Account balances pursuant to Section 8.4(a), or loan
disbursements to Participants under Section 14.3; or
(iii) Exchanges pursuant to Section 5.4(e).
(b) The Trustee shall determine the NAV or share value of each Fund
Unit of each Investment Fund by dividing the fair market value of each
such Investment Fund, determined under Paragraph (a), by the number of
Fund Units or shares outstanding with respect to each such Investment
Fund as of such Valuation Date prior to effecting the purchase or sale
of Fund Units or shares as applicable, to reflect Transactions made on
such Valuation Date.
(c) Following the determination of the NAV or share value for each Fund
Unit or share of each Investment Fund as of any Valuation Date under
Paragraph (b), the Trustee shall effect the purchase or sale of Fund
Units or shares, as applicable, within each Investment Fund to reflect
<PAGE>
Transactions made on such Valuation Date with respect to each such
Investment Fund on the basis of the NAV or value of the applicable Fund
Unit or share as so determined.
(d) Following the purchase or sale of Fund Units or shares to reflect
Transactions made as of any Valuation Date in each Investment Fund, the
Trustee shall revalue the Accounts and subaccounts (established
pursuant to Section 5.4(b)) of each Participant as of such Valuation
Date so as to reflect any increase or decrease in the number of Fund
Units or shares credited to each such Participant's Accounts and
subaccounts and the value of the Fund Units or shares credited to each
such Account and subaccount.
(e) For purposes of the application of this Section 6.4, the Valuation
Date as of which a Transaction shall be considered made shall be
determined as follows:
(i) Except as provided in Subparagraph (ii), any Transaction
described in Section 6.4(a)(i) shall be considered made as of
the Valuation Date on which the wire transfer to the Trustee
of funds pertaining to such Transaction is effected no later
than 4:00 p.m. Eastern Standard Time.
(ii) In the case of a Rollover Contribution by a Participant
or a contribution to the Trust by a Participant effected other
than by payroll deduction for any reason, such Transaction
shall be considered made as of the Valuation Date on which the
funds pertaining to such Transaction are received by the
Trustee no later than 2:00 p.m. Eastern Standard Time.
(iii) Any Transaction described in Section 6.4(a)(ii), other
than forfeitures of nonvested Account balances pursuant to
Section 8.4(a), shall be considered made as of the Valuation
Date upon which the request pertaining to such Transaction is
made by the Participant, or if later, the Valuation Date upon
which the request is approved by the Committee or its
representative, provided notice of such request, or approval,
as applicable, is received by the Trustee no later than 4:00
p.m. Eastern Standard Time on such Valuation Date. A
forfeiture described in Section 6.4(a)(ii) shall be considered
made as of the same Valuation Date as of which the
distribution of the vested portion of the Participant's
Accounts with respect to which the forfeiture pertains is
considered made.
(iv) Any exchange pursuant to Section 5.4(e) shall be
considered made as of the Valuation Date upon which notice of
such Transaction, delivered in the manner prescribed by the
Committee, is received by the Trustee by 4:00 p.m. Eastern
Standard Time.
(v) Any Transaction described in Subparagraphs (i), (ii),
(iii) and (iv) which occurs on a Valuation Date but after the
<PAGE>
time specified in any such Subparagraph shall be considered
made as of the next succeeding Valuation Date.
(f) The determination of net income and losses under Section 6.4 shall
be made prior to the allocations required under Sections 6.3 and 13.4,
if any, and prior to the adjustments required under Sections 4.4, 4.5
and 4.7, if any.
6.5 Treatment of Accounts Upon Termination of Employment.
Upon a Participant's termination of employment, pending distribution of
the Participant's benefit pursuant to the provisions of Article VIII below, the
Participant's Accounts shall continue to be maintained and accounted for in
accordance with all applicable provisions of this Plan, including but not
limited to the applicable provisions of Sections 6.3 and 6.4 as of any
Anniversary Date or other date preceding the distribution of the Participant's
entire benefit under the Plan.
6.6 Miscellaneous Valuation Rules.
(a) The Committee and the Trustee shall establish such additional
accounting procedures as may be necessary for the purpose of making the
allocations, valuations and adjustments to Participants' Accounts
provided for in this Article VI. From time to time, the Committee and
Trustee may modify such additional accounting procedures for the
purpose of achieving equitable, nondiscriminatory, and administratively
feasible allocations among the Accounts of Participants in accordance
with the general concepts of the Plan and the provisions of this
Article VI.
(b) The Company, the Committee, and the Trustee do not in any manner or
to any extent whatsoever warrant, guarantee or represent that the value
of a Participant's Account shall at any time equal or exceed the amount
previously contributed thereto.
<PAGE>
ARTICLE VII
VESTING IN PLAN ACCOUNTS
7.1 No Vested Rights Except as Herein Provided.
No Participant shall have any vested right or interest to, or any right
of payment of, any assets of the Trust Fund, except as expressly provided in
this Plan. Neither the making of any allocations nor the credit to any Account
of a Participant shall vest in any Participant any right, title, or interest in
or to any assets of the Trust Fund.
7.2 Vesting Schedule.
(a) For Plan Years beginning prior to January 1, 1989, a Participant's
interest in his/her Company Contribution on Pay Account shall vest in
accordance with the following schedule:
Years of Service Vested Percentage
Less than 3 0%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 50%
6 but less than 7 60%
7 but less than 8 70%
8 but less than 9 80%
9 but less than 10 90%
10 or more 100%
(b) Notwithstanding the above, for all Plan Years beginning on or after
January 1, 1989, a Participant's interest in his/her Company
Contributions on Pay Account shall vest in accordance with the
following schedule, provided such Participant performs at least one (1)
Hour of Service in any Plan Year beginning on or after January 1, 1989:
Years of Service Vested Percentage
Less than 3 0%
3 but less than 4 30%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
<PAGE>
(c) Notwithstanding the above, a Participant shall become fully vested
in his/her Company Contribution on Pay Account upon the occurrence of
any of the following events, if such Participant is then still an
Employee:
(i) Attainment of age fifty-seven (57);
(ii) Death;
(iii) Adjudication as incompetent by a court having
jurisdiction over such matters; or
(iv) Termination of employment due to a Disability.
7.3 Permissive Vesting.
Notwithstanding the rules of Section 7.2 above, all Participants who
are affected by a closure or sale of a unit of the Company to an entity that is
not an Affiliated Company which does not constitute a partial termination under
Section 11.5, shall become fully vested in their benefit under the Plan, unless
the Board of Directors has, prior to such closure or sale, determined otherwise.
The account balance credited to the Company Contribution on Pay Account of each
Participant which becomes 100% vested as a result of the application of this
Section 7.3, determined as of the date of the Participant's date of termination,
shall be transferred to a Company Contribution on Pay (Fully Vested) Account to
be maintained in the Trust for each such affected Participant.
7.4 Vesting of Participant Contributions.
A Participant shall at all times have a 100% vested interest in his/her
Tax Deferred Contributions Account, Taxed Contributions Account, Company Match
on Contributions Account, Prior Plans Account and Company Contribution on Pay
(Fully Vested) Account and Rollover Account.
7.5 Vesting During Leave of Absence.
Effective October 1, 1992, in the case of a Participant who is on a
Disability Leave of Absence, such Participant shall be 100% vested in all
amounts allocated to such Participant's Company Contribution on Pay (Fully
Vested) Account pursuant to Section 6.3 during such Disability Leave of Absence
and earnings thereon. Prior to October 1, 1992, a Participant to whom amounts
are allocated under Section 6.3 hereof while on Disability Leave of Absence,
shall be 100% vested in such allocated amounts and the earnings accrued thereon
during such Disability Leave of Absence. Earnings accrued on such amounts after
any such Participant recommenced active employment with the Company and before
October 1, 1992, shall be credited to his/her Company Contribution on Pay
Account, subject to the vesting schedule of Section 7.2 hereof.
<PAGE>
ARTICLE VIII
PAYMENT OF PLAN BENEFITS
8.1 Payment of Benefits.
(a) Subject to the provisions of Section 8.3 and Article XVII, if a
Participant terminates employment for any reason other than death, such
Participant may elect to receive a distribution of his/her entire
vested interest under the Plan as soon as is reasonably practicable
following such termination of employment. Such distribution shall be
made in any of the following forms, at the election of the Participant:
(i) One lump sum distribution made in cash, except to the
extent any of the vested portion of such Participant's
Accounts is invested in the Company Stock Fund, and such
Participant elects a single lump sum distribution of his
entire vested Account, then such distribution may be made in
such stock at the election of the Participant to the extent so
invested in such stock;
(ii) Two or more equal or unequal cash installment
distributions at specified intervals (subject to the
limitations of Section 8.3(c)).
Upon the sale of a subsidiary, as described in Section
401(k)(10)(A)(iii) of the Code, that is an Affiliated Company to an
entity that is not an Affiliated Company, the Committee shall direct
the Trustee to make a distribution of an affected Participant's
distributable benefit in the Trust Fund as if such Participant's
employment had terminated; provided, however, that the portion of such
Participant's distributable benefit that consists of his Tax Deferred
Contributions Account may only be distributed in the form described in
Section 8.1(a)(i) hereof. Prior to January 1, 1993, an affected
Participant shall not be considered to have terminated employment upon
the sale of an entity that is not a subsidiary of an Affiliated
Company. Effective upon the later to occur of (i) January 1, 1993, or
(ii) the date of the transaction, an affected Participant shall be
considered to have terminated employment as a result of the sale of an
entity that is not a subsidiary solely for purposes of receiving
distributions under Section 8.1(a) hereof from Accounts other than such
Participant's Tax Deferred Contributions Account. For purposes of
receiving a distribution from such Participant's Tax Deferred
Contributions Account under Section 8.1(a), an affected Participant
will be considered to have terminated employment only to the extent he
would be considered to have separated from service for purposes of Code
Section 401(k)(2)(B)(i)(I) or any successor provision thereto.
<PAGE>
(b) Subject to the provisions of Article XVII, a Participant who is an
Employee may withdraw amounts from his/her Taxed Contributions Account
or Prior Plans Account at any time. Subject to the provisions of
Article XVII, a Participant who is an Employee and who has withdrawn
all amounts from his/her Taxed Contributions Account and Prior Plans
Account may, prior to termination of employment upon incurring a
Hardship as determined by the Committee, withdraw amounts from his/her
Company Match on Contributions Account, Company Contribution on Pay
(Fully Vested) Account, , and Rollover Account; provided that the
Participant may only withdraw amounts from an Account if the Hardship
persists and all amounts in the next previously enumerated Account have
been withdrawn. If the Hardship persists and all amounts from the
Accounts enumerated in the previous sentence have been withdrawn, the
Participant who is an Employee may withdraw amounts from his/her Tax
Deferred Contributions Account (excluding any earnings on such Account
earned after December 31, 1988). Effective October 1, Committee
determinations on Hardships shall be made in accordance with the
following procedures:
(i) A Hardship distribution shall be made to a Participant
only if the Committee (or its representative) determines that
the Participant has an immediate and heavy financial need and
that a withdrawal from the Plan is necessary in order to
satisfy such need.
(ii) The following situations shall be "deemed" to be
immediate and heavy financial needs:
(A) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse, or any
dependents of the Participants (as defined in Code Section
152);
(B) The purchase (excluding mortgage payments) of a
principal residence for the Participant only;
(C) Payment of tuition for the next twelve (12)
months of post- secondary education for the Participant, the
Participant's spouse, children, or other dependents;
(D) The need to prevent the eviction of the
Participant from his or her principal residence or foreclosure
on the mortgage of the Participant's principal residence; and
(E) Any other situation deemed an immediate and heavy
financial need by the Internal Revenue Service through the
publication of revenue rulings, notices, and other documents
of general applicability.
<PAGE>
(iv) A withdrawal from the Plan is deemed necessary to satisfy
an immediate and heavy financial need if all of the following
requirements are met:
(A) The amount of the withdrawal is not in excess of
the amount required to relieve the financial need or
in excess of the amount that such need could not be
satisfied from other sources that are reasonably
available to the Participant.
(B) The Participant has obtained all distributions,
other than hardship distributions and all nontaxable
loans currently available under all plans maintained
by the Company
(C) The Plan and all other plans maintained by the
Company shall limit the Participant's Tax Deferred
Contributions to the limit under Code Section 402(g)
for that year minus the Participant's Tax Deferred
Contributions for the year of the Hardship
withdrawal.
(D) The Participant shall be prohibited from making
Tax Deferred or Taxed Contributions to the Plan and
all other Plans maintained by the Company for 12
months after receipt of the hardship distribution.
(v) A Participant's resources shall be deemed to include those
assets of his/her spouse and minor children that are
reasonably available to the Participant.
(c) Except as provided in Paragraphs (b), (c) and (f), Participants may
not receive a distribution of their benefits under the Plan prior to
termination of employment.
(d) In the event of the death of a Participant, the Participant's
benefit under the Plan (reduced by any security interest held by the
Plan by reason of a loan outstanding to such Participant pursuant to
Section 14.3 and subject to the rights of any person pursuant to a
Qualified Domestic Relations Order as defined in Section 14.2) shall be
distributed to the Participant's Beneficiary designated pursuant to
Section 8.2. Distributions to the Beneficiary pursuant to this
Paragraph (e) shall be in the same form and at the same time as
specified in Paragraph (a) above, as elected by the Beneficiary,
subject to the limitations of Section 8.3 and Article XVII.
<PAGE>
(e) A Participant who has attained age 59-1/2 may withdraw all or a
portion of the current balance of his/her Accounts at any time by
submitting a request therefor to the Committee in the manner prescribed
by it, subject to the requirements of Article XVII. Withdrawal from
Accounts shall occur in the following order, with each enumerated
Account to be totally depleted before amounts in the next enumerated
Account may be withdrawn: Taxed Contributions Account, Prior Plans
Account, Company Match on Contributions Account, Company Contribution
on Pay (Fully Vested) Account, Rollover Account, Tax Deferred
Contributions Account, and Company Contribution on Pay Account.
(f) Notwithstanding the provisions contained in the foregoing
Paragraphs of this Section 8.1, any provision which restricts or would
deny a Participant through the withholding of consent or the exercise
of discretion by some person or persons other than the Participant (and
where relevant, other than the Participant's spouse) of an alternative
form of benefit, in violation of Code Section 411(d)(6) and the
regulations promulgated thereunder, is hereby amended by the deletion
of the consent and/or discretion requirement
8.2 Designation of Beneficiary.
(a) Each Participant or Beneficiary entitled to receive a benefit under
this Article VIII (collectively referred to as a "Distributee") shall
have the right to designate a Beneficiary or Beneficiaries to receive
his/her interest in the Trust Fund in the event of his/her death before
receipt of his/her entire interest in the Trust Fund. This designation
is to be made on the form prescribed by and delivered to the Committee.
In the case of a Participant who is married as of the date of his/her
death, such Participant's Beneficiary shall be his/her surviving
spouse, unless such Participant has designated another Beneficiary with
the written consent of such spouse. Any such consent must acknowledge
the effect of such designation on the rights of such spouse and must be
witnessed by a Plan Representative or a notary public unless it is
established to the satisfaction of a Plan Representative that such
consent may not be obtained because there is no spouse, because the
spouse cannot be located, or such other circumstances as may be
prescribed in regulations under Code Section 417. For purposes of this
Paragraph (a), "Plan Representative" shall mean the person or persons
designated by the Committee to perform the duties specified herein.
(b) If a deceased Participant shall have failed to designate a
Beneficiary, or if the Committee shall be unable to locate a designated
Beneficiary after reasonable efforts have been made, or if for any
reason the designation shall be legally ineffective, or if the
Beneficiary shall have predeceased the Participant, any distribution
required to be made under the provisions of this Plan shall commence
within five (5) years after the Participant's death to the
Participant's estate. However, if the Committee cannot locate a
<PAGE>
qualified representative of the deceased Participant's estate, or if
administration of the estate is not otherwise required, the Committee
in its discretion may make the distribution under this subparagraph to
the deceased Participant's heirs at law, determined in accordance with
the law of the State of the Participant's domicile in effect as of the
date of the Participant's death.
(c) The Committee shall prescribe such procedures, either in writing or
in practice, as it deems appropriate to implement the provisions of
this Section 8.2.
8.3 Distribution Rules.
Notwithstanding any other provisions of this Article VIII of the Plan
regarding distributions of Participant's Accounts, the following additional
rules shall apply to all such distributions, effective January 1, 1987.
(a) In no event shall any benefits under this Plan, including benefits
upon retirement, termination of employment, or disability, be paid (or
commence to be paid) to a Participant prior to the "Consent Date" (as
defined herein) unless the Participant consents in writing (or on some
electronically recorded device susceptible to written reproduction) to
the payment (or commencement of payment) of such benefits prior to said
Consent Date. As used herein, the term "Consent Date" shall mean the
later of (i) the Participant's 62nd birthday, or (ii) the Participant's
Normal Retirement Age. Notwithstanding the foregoing, the provisions of
this paragraph shall not apply (i) following the Participant's death,
or (ii) with respect to a lump sum distribution of the vested portion
of a Participant's Account if the total amount of such vested portion
does not exceed $5,000.
(b) Unless a Participant elects otherwise pursuant to Paragraph (a)
above, distributions of the vested portion of a Participant's Accounts
shall commence no later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (i) the
Participant's Normal Retirement Age; (ii) the tenth anniversary of the
year in which the Participant commenced participation in the Plan; or
(iii) the termination of the Participant's employment with the Company.
(c) Notwithstanding Paragraph (a) or (b) above, distributions of the
entire vested portion of a Participant's Accounts shall be made no
later than the Participant's Required Beginning Date, or, if such
distribution is to be made over the life of such Participant or over
the lives of such Participant and a Beneficiary (or over a period not
extending beyond the life expectancy of such Participant and
Beneficiary) then such distribution shall commence no later than the
Participant's Required Beginning Date. Required Beginning Date shall
mean:
<PAGE>
(i) For the period prior to January 1, 1989 and after December
31, 1996, April 1 of the calendar year following the later of
the calendar year in which the Participant (A) attains age
70-1/2, or (B) retires; provided, however the foregoing clause
(B) shall not apply with respect to a Participant who is a
Five Percent Owner (as defined in Section 416(i) of the Code)
at any time during the five Plan Year period ending in the
calendar year in which the Participant attains age 70-1/2. If
the Participant becomes a Five Percent Owner during any Plan
Year subsequent to the five Plan Year period referenced above,
the Required Beginning Date under this Subparagraph (1) shall
be April 1 of the calendar year following the calendar year in
which such subsequent Plan Year ends.
(ii) For the period after December 31, 1988 and before January
1, 1997, April 1 of the calendar year following the calendar
year in which the Participant attains age 70-1/2; provided,
however, if the Participant attains age 70-1/2 before January
1, 1988, and the Participant was not a Five Percent Owner (as
defined in Section 416(i) of the Code) at any time during the
Plan Year ending with or within the calendar year in which
such Participant attains age 66-1/2 or any subsequent Plan
Year, then this Subparagraph (ii) shall not apply and the
Required Beginning Date shall be determined under Subparagraph
(i) above.
(d) Notwithstanding anything to the contrary in this Plan, if a
Participant dies before distribution of his/her vested benefit has
begun in accordance with Paragraph (c) above, the Participant's vested
benefit shall be distributed to his Beneficiary within five years from
the date of the Participant's death except that any portion of the
Account balance meeting the following requirements shall not be subject
to this rule:
(i) A Beneficiary has been designated to receive the
Participant's Account balance and such designation is
effective at the Participant's death;
(ii) The Account balance is paid to the Beneficiary over the
Beneficiary's life or over a period not to exceed the
Beneficiary's life; and
(iii) The payments to the Beneficiary commence within one year
of the Participant's death, or, if the Beneficiary is the
spouse, before the time the deceased Participant would have
attained age 70-1/2. If a Participant dies after distributions
have begun in accordance with paragraph (c) above, the
remaining portion of the Participant's vested benefit will be
distributed at least as rapidly as the method of distribution
being used as of the date of the Participant's death.
<PAGE>
(e) All distributions under this Plan shall be made in accordance with
the minimum distribution incidental benefit requirements of Code
Section 401(a)(9)(G) and in accordance with all regulations issued
under Code Section 401(a)(9).
(f) If a distribution is to be made over the life of a Participant or
the joint lives of a Participant and his or her spouse, the life
expectancy of the Participant and/or the life expectancy of the spouse
(if a distribution is to be made over the joint lives of the
Participant and his or her spouse) shall not be recalculated annually
unless the Participant elects recalculation prior to his or her
Required Beginning Date as determined under paragraph (c) above. If a
Participant dies before the distribution of his or her vested benefit
has begun in accordance with paragraph (c) above and the distribution
of the Participant's vested benefit is to be made to the Participant's
spouse over the life of such spouse, the life expectancy of the spouse
shall not be recalculated unless such spouse elects otherwise prior to
the date the deceased Participant would have attained age 70-1/2.
(g) If it is not administratively practical to calculate and commence
payments by the latest date specified in the rules of Paragraphs (b),
(c) and (d) above because the amount of the Participant's benefit
cannot be calculated, or because the Committee is unable to locate the
Participant (or eligible Beneficiary) after making reasonable efforts
to do so, the payment shall be made as soon as is administratively
possible (but not more than 60 days) after the Participant (or
Beneficiary) can be located and the amount of the distributable benefit
can be ascertained.
8.4 Forfeitures.
(a) In the event that a distribution of Company Contributions is made
to a Participant due to a termination of employment when he/she is not
fully vested in such amounts, the non-vested portion of the
Participant's Account(s) shall be forfeited upon the earlier to occur
of the following: (i) the date the distribution is considered made,
determined pursuant to the provisions of Section 6.4, or (ii) the date
upon which the former Participant incurs five consecutive one-year
Breaks in Service.
(b) A Participant who received a distribution described in Paragraph
(a) above may recontribute the amount of the distribution he/she
received. Such a repayment must be made before the earlier of (i) the
end of the first period of five consecutive one-year Breaks in Service
commencing after the payment of the distribution made pursuant to
Section 8.4(a) above, or (ii) five years after the first date on which
the Participant is subsequently reemployed. If the Participant repays
the amount of the distribution within the prescribed time period, the
amount of his/her Account balances shall be completely restored.
<PAGE>
Neither the amount recontributed nor the Account balances shall be
adjusted for gains, losses, or interest in the interim period. A
Participant who receives a distribution subject to the rules of this
Section 8.4 and who does not recontribute such amounts shall not be
entitled to any portion of the non-vested portion of his/her Account
balances (determined as of the date of the first distribution).
(c) Forfeitures shall be used as provided in Section 6.3.
8.5 Valuation of Plan Benefits.
For the purpose of any withdrawal or distribution of benefits under
this Article VIII, the value of a Participant's Accounts shall be equal to the
value determined as of the Valuation Date coinciding with the date the
distribution is considered made, determined pursuant to the provisions of
Section 6.4.
8.6 Lapsed Benefits.
(a) In the event that a benefit is payable under this Plan to a
Participant and after reasonable efforts the Participant and his/her
Beneficiary cannot be located for the purpose of paying the benefit
during a period of two (2) consecutive years, the Participant shall be
presumed dead and the benefit shall be treated as a Forfeiture under
Section 8.4.
(b) Notwithstanding the provisions of Paragraph (a) above, if the
Participant or his/her Beneficiary shall subsequently present a valid
claim to the benefit, the Accounts of the Participant shall be
reinstated (pursuant to Section 6.3(a)) and the benefit shall be
payable to the Participant or Beneficiary.
8.7 Persons Under Legal Disability.
(a) If any payee under the Plan is a minor or if the Committee
reasonably believes that any payee is legally incapable of giving a
valid receipt and discharge for any payment due him/her, the Committee
may have the payment, or any part thereof, made to the person (or
persons or institution) whom it reasonably believes is caring for or
supporting the payee, unless it has received due notice of claim
therefore from a duly appointed guardian or committee of the payee.
(b) Any such payment shall be a payment from the Accounts of the payee
and shall, to the extent thereof, be a complete discharge of any
liability under the Plan to the payee.
<PAGE>
8.8 Additional Documents.
(a) The Committee or the Company may require satisfactory proof of any
matter under this Plan from or with respect to any Employee,
Participant, or Beneficiary, and no person shall be entitled to receive
any benefits under this Plan until the required proof shall be
furnished.
(b) The Committee or Trustee, or both, may require the execution and
delivery of such documents, papers and receipts as the Committee or
Trustee may determine necessary or appropriate in order to establish
the fact of death of the deceased Participant and of the right and
identity of any Beneficiary or other person or persons claiming any
benefits under this Article VIII.
(c) The Committee or the Trustee, or both, may, as a condition
precedent to the payment of death benefits hereunder, require an
inheritance tax release and/or such security as the Committee or
Trustee, or both, may deem appropriate as protection against possible
liability for State or Federal death taxes attributable to any death
benefits.
8.9 Direct Transfers.
(a) Effective with respect to distributions made before January 1,
1993, in the case of any Participant or Participants who have
terminated employment with the Company and all Affiliated Companies, as
determined under the provisions of Section 8.1(a) hereof, and
subsequently become employed by an unrelated successor employer, the
Committee shall, at the request of such Participant or Participants,
direct the Trustee to transfer the assets in the Accounts of such
Participant or Participants either (i) directly to the trustee of any
retirement plan maintained by such successor employer or employers in
lieu of any distribution described in the preceding provisions of this
Article VIII but only if (A) the retirement plan maintained by such
successor employer is determined to the satisfaction of the Committee
to be qualified under Section 401 of the Code, (B) the sponsor and
trustee of such plan consent to the transfer, and (C) such transfer
satisfies the conditions of Section 10.2 hereof, or (ii) directly to
the custodian or trustee of an individual retirement account under
Section 408(a) of the Code or an individual retirement annuity under
Section 408(b) of the Code.
(b) In the case of any Participant or Participants who are or were
employed by a unit of the Company or all or part of an Affiliated
Company which is the subject of a corporate reorganization, sale or
other transaction under circumstances such that it would not be
permissible under Section 8.1(a) hereof solely as a result of such
transaction to make distribution of one or more of the Accounts of such
<PAGE>
Participant or Participants actively employed by the successor entity,
then the Committee may, at its discretion, direct the Trustee to
transfer the assets in the Accounts of such Participant or any or all
such Participants with respect to which no distribution is permitted
under Section 8.1(a) directly to the trustee of any retirement plan
maintained by a successor employer, but only if the transfer meets the
requirements of Paragraph (a) of this Section 8.9.
8.10 Election for Direct Rollover.
(a) To the extent required by Section 401(a)(31) of the Code, a
Participant whose Accounts become payable in an "eligible rollover
distribution," as defined in (b)(i) below, shall be entitled to make an
election for a direct rollover of all or a portion of such eligible
rollover distribution to an "eligible retirement plan," as defined in
(b)(ii) below. Any non-taxable portion of the value of a Participant's
Accounts shall be payable to the Participant as otherwise provided
elsewhere in the Plan.
(b) For purposes of this Section,
(i) an "eligible rollover distribution" shall mean any
distribution of all or any portion of the value of a
Participant's Accounts, except that an eligible rollover
distribution shall not include: any distribution that is one
of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Participant or the joint lives (or joint
life expectancies) of the Participant and the Participant's
designated Beneficiary, or for a specified period of ten years
or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; the portion of
any distribution that is not includable in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); effective
January 1, 1999, any hardship distribution described in
Section 401(k)(2)(B)(i)(IV), and
(ii) an "eligible retirement plan" shall mean any plan
described in Code Section 402(c)(8)(B), the terms of which
permit the acceptance of a direct rollover from a qualified
plan.
(c) A Participant's direct rollover election under this Section shall
specify the dollar or percentage amount of the direct rollover, the
name and address of the eligible retirement plan selected by the
Participant and such additional information as the Committee deems
necessary or appropriate in order to implement the Participant's
election. It shall be the Participant's responsibility to confirm that
the eligible retirement plan designated in the direct rollover election
<PAGE>
will accept the eligible rollover distribution. The Committee shall be
entitled to effect the direct rollover based on its reasonable reliance
on information provided by the Participant, and shall not be required
to independently verify such information, unless it is clearly
unreasonable not to do so.
(d) At least thirty (30) days, but not more than ninety (90) days,
prior to the date the value of a Participant's Accounts become payable,
the Participant shall be given written notice of any right he may have
to elect a direct rollover of his eligible rollover distribution.
Except in the case of a Participant to whom the provisions of Article
XVIII apply, a Participant who has received the direct rollover notice
may waive the thirty (30) day advance notice requirement by making an
affirmative election to make or not to make a direct rollover of all or
a portion of his Accounts.
(e) If a Participant whose Accounts become payable in an eligible
rollover distribution fails to file a direct rollover election with the
Committee within ninety (90) days after receipt of the direct rollover
notice, or if the Committee is unable to effect the rollover within a
reasonable time after the election is filed with the Committee due to
the failure of the Participant to take such actions as may be required
by the eligible retirement plan before it will accept the rollover, the
value of the eligible rollover distribution shall be paid to him in
accordance with the applicable provisions of this Plan, after
withholding any applicable income taxes.
(f) To the extent required by Section 401(a)(31) of the Code, if all or
a portion of the value of a Participant's Accounts is payable to his
surviving spouse in an eligible rollover distribution, or to a former
spouse in accordance with a "qualified domestic relations order," such
surviving spouse or former spouse shall be entitled to elect a direct
rollover of all or a portion of such distribution to an individual
retirement account or an individual retirement annuity in accordance
with the provisions of this Section.
<PAGE>
ARTICLE IX
OPERATION AND ADMINISTRATION OF THE PLAN
9.1 Plan Administration.
(a) Authority to control and manage the operation and administration of
the Plan shall be vested in the Albertson's, Inc. Benefit Plans
Committee ("Committee").
(b) The Members of the Committee shall be appointed by the Board of
Directors and shall hold office until termination of such status in
accordance with the provisions of Section 9.7.
(c) For purposes of ERISA Section 402(a), the Members of the Committee
shall be the Named Fiduciaries of this Plan.
(d) The secretary of the Committee shall cause to be attached to the
copy of the Plan maintained in the office of the Committee an accurate
schedule listing the names of all persons from time to time serving as
the Named Fiduciaries of the Plan for the purpose of inspection.
(e) For purposes of ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder, the Chairman of the Committee shall
be the fiduciary responsible for the provision and distribution of all
information required by such statutory and regulatory requirements.
9.2 Committee Powers.
The Committee shall have all powers necessary to supervise the
administration of the Plan and control its operations. In addition to any powers
of authority conferred on the Committee elsewhere in the Plan or by law, the
Committee shall have, by way of illustration but not by way of limitation, the
following discretionary powers and authority:
(a) To allocate fiduciary responsibilities (other than "Trustee
Responsibilities") among the Named Fiduciaries and to designate one or
more other persons to carry out fiduciary responsibilities (other than
Trustee Responsibilities). However, no allocation or delegation under
this Section 9.2(a) shall be effective until the person or persons to
whom the responsibilities have been allocated or delegated agree to
assume the responsibilities. The term "Trustee Responsibilities" shall
have the meaning set forth in Section 405(c) of ERISA.
<PAGE>
(b) To designate representatives to carry out responsibilities relating
to the Plan, other than fiduciary responsibilities.
(c) To employ such legal, actuarial, medical, accounting, clerical, and
other assistance as it may deem appropriate in carrying out the
provisions of this Plan, including one or more persons to render advice
with regard to any responsibility any Named Fiduciary or any other
fiduciary may have under the Plan.
(d) To establish rules and procedures from time to time for the conduct
of the Committee's business and the administration and effectuation of
this Plan.
(e) To administer, interpret, construe and apply this Plan. To decide
all questions which may arise or which may be raised under this Plan by
any Employee, Participant, former Participant, Beneficiary or other
person whatsoever, including but not limited to all questions relating
to eligibility to participate in the Plan, the amount of service of any
Participant, and the amount of benefits to which any Participant or
his/her Beneficiary may be entitled.
(f) To determine the manner in which the assets of this Plan, or any
part thereof, shall be disbursed.
(g) To direct the Trustee, in writing, from time to time, to invest and
reinvest the Trust Fund, or any part thereof, or to purchase, exchange,
or lease any property, real or personal, which the Committee may
designate. This shall include the right to direct the investment of all
or any part of the Trust in any one security or any one type of
securities permitted hereunder. Among the securities which the
Committee may direct the Trustee to purchase are "Employer Securities"
as defined in Code Section 409(1).
(h) To perform or cause to be performed such further acts as it may
deem to be necessary, appropriate or convenient in the efficient
administration of the Plan.
Any action taken in good faith by the Committee in the exercise of
discretionary authority conferred upon it by this Plan shall be conclusive and
binding upon the Participants and their Beneficiaries. All discretionary powers
conferred upon the Committee shall be absolute. However, all discretionary
powers shall be exercised in a uniform and nondiscriminatory manner. This
Section 9.2 shall be effective on or after January 1, 1987.
<PAGE>
9.3 Investment Manager.
(a) Notwithstanding anything in this Article IX to the contrary, the
Committee, by action reflected in the minutes thereof, may appoint one
or more Investment Managers, as defined in Section 3(38) of ERISA, to
manage all or a portion of the assets of the Plan.
(b) An Investment Manager shall discharge its duties in accordance with
applicable law and in particular in accordance with Section 404(a)(1)
of ERISA.
(c) An Investment Manager, when appointed, shall have full power to
manage the assets of the Plan for which it has responsibility, and
neither the Company nor the Committee shall thereafter have any
responsibility for the management of those assets, except as otherwise
provided by law.
(d) As shall be provided in any contract between an Investment Manager
and the Committee, such Investment Manager shall hold a revocable proxy
with respect to all securities which are held under the management of
such Investment Manager pursuant to such contract except for Company
Stock, and such Investment Manager shall report the voting of all
securities subject to such proxy on an annual basis to the Committee.
9.4 Funding Policy.
(a) At periodic intervals, not less frequently than annually, the
Committee shall review the long-run and short-run financial needs of
the Plan and shall determine a funding policy for the Plan consistent
with the objectives of the Plan and the need to have sufficient funds
and/or shares of Company Stock to pay benefits under the Plan.
(b) In determining the funding policy the Committee shall take into
account, at a minimum, not only the long-term investment objectives of
the Trust Fund consistent with the prudent management of the assets
thereof, but also the short-run needs of the Plan to pay benefits.
(c) All actions taken by the Committee with respect to the funding
policy of the Plan, including the reasons therefore, shall be fully
reflected in the minutes of the Committee.
<PAGE>
9.5 Committee Procedure.
(a) A majority of the members of the Committee as constituted at any
time shall constitute a quorum, and any action by a majority of the
members present at any meeting, or authorized by a majority of the
members in writing without a meeting, shall constitute the action of
the Committee.
(b) The Committee may designate one or more of its members ("Designated
Members") as authorized to execute any document or documents on behalf
of the Committee, in which event the Committee shall notify the Trustee
of this action and the name or names of the Designated Members.
(c) The Trustee, Company, Participants, Beneficiaries, and any other
party dealing with the Committee may accept and rely upon any document
executed by the Designated Members as representing action by the
Committee until the Committee shall file with the Trustee a written
revocation of the authorization of the Designated Members.
9.6 Compensation of Committee Members and Plan Expenses.
(a) Members of the Committee shall serve without compensation unless
the Company shall otherwise determine. However, in no event shall any
member of the Committee who receives full-time pay from the Company
receive compensation from the Plan for his/her services as a member of
the Committee.
(b) All members shall be reimbursed for any necessary or appropriate
expenditures incurred in the discharge of duties as members of the
Committee.
(c) The compensation or fees, as the case may be, of all officers,
representatives, counsel, the Trustee, or other persons retained or
employed by the Committee shall be fixed by the Committee, subject to
approval by the Company.
(d) The expenses incurred in the establishment and administration of
the Plan, including but not limited to the expenses incurred by the
members of the Committee in exercising their duties, shall be paid out
of the Trust assets, to the extent they are not paid by the Company.
(e) Notwithstanding the provisions of Paragraph (d) above, to the
extent provided by rules prescribed by the Committee, the cost of
interest, transfer taxes, and normal brokerage charges which are
included in the cost of securities (or other forms of investments)
purchased by the Trust Fund (or charged to proceeds in the case of
sales) shall be charged and allocated in a fair and equitable manner to
<PAGE>
the Accounts of the Participants to which the securities (or other
forms of investments) are allocated.
9.7 Resignation and Removal of Members.
(a) Any member of the Committee may resign at any time by giving
written notice to the Chairman or Secretary of the Committee, effective
as therein stated.
(b) Any member of the Committee may, at any time, be removed by the
Board of Directors.
(c) In the case of a Committee member who is also an Employee of the
Company, his/her status as a Committee member shall terminate as of the
effective date of the termination of his/her employment, except as
otherwise provided by the Company.
9.8 Appointment of Successors.
(a) Upon the death, resignation, or removal of any Committee member,
the Board of Directors may appoint a successor.
(b) Upon termination, for any reason, of a Committee member's status as
a member of the Committee, the member's status as a Named Fiduciary
shall concurrently be terminated, and upon the appointment of a
successor Committee member the successor shall assume the status of a
Named Fiduciary as provided in Section 9.1.
9.9 Records.
(a) The Committee shall keep a record of all its proceedings and shall
keep, or cause to be kept, all such books, accounts, records or other
data as may be necessary or advisable in its judgment for the
administration of the Plan and to properly reflect the affairs thereof,
and to satisfy the requirements of ERISA Section 107.
(b) However, nothing in this Section 9.9 shall require the Committee or
any member thereof to perform any act which, pursuant to law or the
provisions of this Plan, is the responsibility of the Plan
Administrator (e.g., such as satisfying the reporting and disclosure
requirements, as provided in Section 9.10), nor shall this Section
relieve the Plan Administrator from such responsibility.
<PAGE>
9.10 Reporting and Disclosure.
The Plan Administrator shall be responsible for the reporting and
disclosure of information required to be reported or disclosed pursuant
to ERISA or any other applicable law.
9.11 Reliance Upon Documents and Opinions.
(a) The members of the Committee, the Board of Directors, the Company
and any person delegated under the provisions hereof to carry out any
fiduciary responsibilities under the Plan ("Delegated Fiduciary"),
shall be entitled to rely upon any tables, valuations, computations,
estimates, certificates and reports furnished by any consultant, or
firm or corporation which employs one or more consultants, upon any
opinions furnished by legal counsel, and upon any reports furnished by
the Trustee.
(b) The members of the Committee, the Board of Directors, the Company
and any Delegated Fiduciary shall be fully protected and shall not be
liable in any manner whatsoever for anything done or action taken or
suffered in reliance upon any such consultant or firm or corporation
which employs one or more consultants, Trustee, or counsel, except as
otherwise provided by law.
(c) Any and all such things done or actions taken or suffered by the
Committee, the Board of Directors, the Company, and any Delegated
Fiduciary shall be conclusive and binding on all Employees,
Participants, Beneficiaries, and any other persons whomsoever, except
as otherwise provided by law.
(d) The Committee and any Delegated Fiduciary may, but are not required
to, rely upon all records of the Company with respect to any matter or
thing whatsoever, and may likewise treat those records as conclusive
with respect to all Employees, Participants, Beneficiaries, and any
other persons whomsoever, except as otherwise provided by law.
9.12 Reliance on Committee Memorandum.
Any person dealing with the Committee may rely on and shall be fully
protected in relying on a certificate or memorandum in writing signed by the
Committee Chairman as authorized by the majority of the members of the
Committee, as constituted as of the date of the certificate or memorandum, as
evidence of any action taken or resolution adopted by the Committee.
<PAGE>
9.13 Multiple Fiduciary Capacity.
Any person or group of persons may serve in more than one fiduciary
capacity with respect to the Plan.
9.14 Limitation on Liability.
(a) Except as provided in Part 4 of Subtitle B of Title I of ERISA, no
person shall be subject to any liability with respect to his/her duties
under the Plan unless he/she acts fraudulently or in bad faith.
(b) No person shall be liable for any breach of fiduciary
responsibility resulting from the act or omission of any other
fiduciary or any person to whom fiduciary responsibilities have been
allocated or delegated, except as provided in Part 4 of Subtitle B of
Title I of ERISA.
(c) No action or responsibility shall be deemed to be a fiduciary
action or responsibility except to the extent required by ERISA.
9.15 Indemnification.
(a) To the extent permitted by law, the Company shall indemnify each
member of the Board of Directors and the Committee, and any other
Employee of the Company with duties under the Plan, against expenses
(including any amount paid in settlement) reasonably incurred by
him/her in connection with any claims against him/her by reason of
his/her conduct in the performance of his/her duties under the Plan,
except in relation to matters as to which he/she acted fraudulently or
in bad faith in the performance of such duties.
(b) The preceding right of indemnification shall be in addition to any
other right to which the Board or Committee member or other person may
be entitled as a matter of law or otherwise, and shall pass to the
estate of a deceased Committee member.
(c) For purposes of satisfying its indemnity obligations under this
Section, the Company may (but need not) purchase and pay premiums for
one or more policies of insurance. However, this insurance shall not
release the Company of its liability under this section.
9.16 Bonding.
Members of the Committee and all other Employees having
responsibilities under the Plan shall be bonded to the extent required by
Section 412 of ERISA or any other applicable law.
<PAGE>
9.17 Voting and Other Rights of Company Stock.
(a) With respect to the voting rights of all Company Stock held in
Participant's Accounts (both vested and non-vested), all such voting
rights on all matters submitted to shareholders shall be exercised by
the Trustee as directed by such Participants pursuant to procedures
established by the Committee. Notwithstanding any other provision
hereof, the Participants returning directions on Company Stock held in
their respective Accounts shall be Named Fiduciaries, for purposes of
ERISA, with respect to such directions on such shares. With respect to
the voting rights of Company Stock on which Participants fail to return
directions, such voting rights shall be exercised by the Trustee by
voting such shares on any given issue in the same proportion as are the
voted shares of Company Stock with respect to which Participants do
affirmatively provide directions.
(b) Notwithstanding the provisions of Paragraph (a) above, in the event
the Company is the subject of a tender offer (as such term is used in
Section 14 of the Securities Exchange Act of 1934) for any or all
shares of Company Stock held by the Trust, the Committee shall pass
through to the Participants the right to determine confidentially
whether shares (both vested and non-vested) held subject to the Plan
will be tendered pursuant to the offer, in accordance with the
following rules:
(i) Solely for the purposes of this Section 9.17(b), each
Participant shall be deemed a Named Fiduciary (within the
meaning of Section 402 of ERISA) with respect to Company
Stock held in his Accounts.
(ii) During the pendency of the tender offer, this Plan shall
continue to operate under its respective normal rules
except as expressly provided in this Section 9.17.
Accordingly, Participants may, among other things, continue to
receive withdrawals and distributions, make changes in the
investment of assets held in their respective Accounts and
make changes with respect to the investment of prospective
contributions as per the terms of the Plan.
(iii) To the extent that the tender offer results in the sale
of Company Stock in the Trust, the Committee or an Investment
Manager shall instruct the Trustee as to the investment of the
proceeds of such sale. The sale proceeds shall not be
reinvested in Company Stock except as to Accounts of
Participants who so consent.
(iv) The Trustee shall distribute at the Company's expense
copies of all relevant material filed with the Securities and
<PAGE>
Exchange Commission which are distributed to shareholders of
the Company with such offer or regarding such offer, and shall
seek confidential written instructions from each Participant
as to whether the Company Stock credited to his Accounts
should be tendered pursuant to the tender offer. The
identities and addresses of Participants and the amount of
Company Stock held in their respective Accounts shall be
delivered to the Trustee based on the information provided by
the Committee and maintained by the Trustee in the normal
course as part of its recordkeeping duties.
(v) Each Participant may choose to instruct the Trustee
directly in one of the following three ways: (A) to tender a
specified percentage but less than all of the Company Stock
held in his Accounts regardless of the elections of other
Participants, (B) to tender all Company Stock held in his
Accounts regardless of the elections of other Participants, or
(C) not to tender any Company Stock held in his Accounts
regardless of the elections of other Participants. The Trustee
shall not tender shares of Company Stock for which it has
received no directions from a Participant.
(vi) The Trustee shall follow up with additional mailings as
reasonable under the time constraints then prevailing, to
obtain instructions from Participants not otherwise responding
to such request for instructions.
(c) For purposes of ERISA Section 404(c) and the Department of Labor
Regulations promulgated thereunder, in connection with any investment
in Company Stock, the Chairman of the Committee shall be responsible
for compliance with all required confidentiality procedures associated
with the exercise of any rights appurtenant to the investment in
Company Stock and for ensuring the appointment of an independent
fiduciary in situations where the potential for undue employer
influence indicates the appropriateness of the appointment of an
independent fiduciary, it being contemplated that in the ordinary
course the Trustee shall be such independent fiduciary.
9.18 Prohibition Against Certain Actions.
(a) In administering this Plan, the Committee shall not discriminate in
favor of any class of Employees and particularly it shall not
discriminate in favor of highly compensated Employees, or Employees who
are officers or shareholders of the Company.
(b) Also, the Committee shall not cause the Plan to engage in any
transaction that constitutes a non-exempt Prohibited Transaction under
Section 4975(c) of the Code or Section 406(a) of ERISA.
<PAGE>
(c) The Committee shall not be required to engage in any transaction,
including without limitation, directing the purchase or sale of Company
Stock, which it determines, in its sole discretion, might tend to
subject itself, its members, the Plan, the Company, or any Participant
to liability under federal or state securities law.
(d) No member of the Committee who is also a Participant or former
Participant of this Plan shall vote or decide any matter relating
solely to that person's rights under this Plan.
9.19 Military Service.
Effective December 12, 1994, notwithstanding any provision of this Plan
to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u).
<PAGE>
ARTICLE X
MERGER OF COMPANY, MERGER OF PLAN
10.1 Effect of Reorganization or Transfer of Assets.
In the event of a consolidation, merger, sale, liquidation, or other
transfer of the operating assets of the Company to any other company, the
ultimate successor or successors to the business of the Company shall
automatically be deemed to have elected to continue this Plan in full force and
effect, in the same manner as if the Plan had been adopted by resolution of its
board of directors, unless the successor(s), by resolution of its board of
directors, shall elect not to so continue this Plan in effect, in which case the
Plan shall automatically be deemed terminated as of the applicable effective
date set forth in the board resolution.
10.2 Merger Restriction.
Notwithstanding any other provision in this document, this Plan shall
not in whole or in part merge or consolidate with, or transfer its assets and/or
liabilities to any other plan unless each affected Participant in this Plan
would receive a benefit immediately after the merger, consolidation, or transfer
(if the Plan then terminated) which is equal to or greater than the benefit
he/she would have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated). Provided the
requirements set forth in the preceding sentence are satisfied, the Committee
may direct that the Plan may merge, consolidate with, or transfer its assets
and/or liabilities to another tax-qualified employee pension benefit plan. Any
such transaction shall be effected in accordance with any and all applicable
law.
<PAGE>
ARTICLE XI
PLAN TERMINATION AND
DISCONTINUANCE OF CONTRIBUTIONS
11.1 Plan Termination.
(a) The Company may terminate the Plan and the Trust Agreements at any
time by an instrument in writing executed in the name of the Company by
an officer or officers duly authorized to execute such an instrument,
and delivered to the Trustee.
(b) Upon and after the effective date of the termination, the Company
shall not make any further contributions under the Plan and no
contributions need be made by the Company applicable to the Plan Year
in which the termination occurs, except as may otherwise be required by
law.
(c) The rights of all affected Participants to benefits accrued to the
date of termination of the Plan, to the extent funded as of the date of
termination, shall automatically become fully vested as of that date.
11.2 Discontinuance of Contributions.
(a) In the event the Company decides it is impossible or inadvisable
for business reasons to continue to make Company Contributions under
the Plan, the Company by resolution of its Board of Directors may
discontinue contributions to the Plan. Upon and after the effective
date of this discontinuance, the Company shall not make any further
Company Contributions under the Plan and no Company Contributions need
be made by the Company with respect to the Plan Year in which the
discontinuance occurs, except as may otherwise be required by law.
(b) The discontinuance of Company Contributions on the part of the
Company shall not terminate the Plan as to the funds and assets then
held by the Trustee, or operate to accelerate any payments of
distributions to or for the benefit of Participants or Beneficiaries,
and the Trustee shall continue to administer the Trust Fund in
accordance with the provisions of the Plan until all of the obligations
under the Plan shall have been discharged and satisfied.
(c) However, if this discontinuance of Company Contributions shall
cause the Plan to lose its status as a tax-qualified plan under Code
Section 401(a), the Plan shall be terminated in accordance with the
provisions of this Article XI.
<PAGE>
(d) On and after the effective date of a complete discontinuance of
Company Contributions, the rights of all affected Participants to the
balance in their Accounts as of that date, shall automatically become
fully vested.
(e) The failure of the Company to contribute to the Trust in any year,
if contributions are not required under the Plan for that year, shall
not constitute a complete discontinuance of contributions to the Plan.
11.3 Rights of Participants.
In the event of the termination of the Plan, for any cause whatsoever,
all assets of the Plan, after payment of expenses, shall be used for the
exclusive benefit of Participants and their Beneficiaries and no part thereof
shall be returned to the company, except as provided in Section 5.6 of this
Plan.
11.4 Trustee's Duties on Termination.
(a) On or before the effective date of termination of this Plan, the
Trustee shall proceed as soon as possible to reduce all of the assets
of the Trust Fund to cash and/or common stock and other securities in
such proportions as the Committee shall determine (after approval by
the Internal Revenue Service, if necessary or desirable, with respect
to any portion of the assets of the Trust Fund held in common stock or
securities of the Company).
(b) After first deducting the estimated expenses for liquidation and
distribution chargeable to the Trust Fund, and after setting aside a
reasonable reserve for expenses and liabilities (absolute or
contingent) of the Trust, the Committee shall make the allocations
required under Article VI, where applicable, with the same effect as
though the date of completion of liquidation were an Anniversary Date
of the Plan.
(c) Following these allocations, the Trustee shall promptly, after
receipt of appropriate instructions from the Committee, distribute in
accordance with Article VIII to each former Participant a benefit equal
to the amount credited to his/her Accounts as of the date of completion
of the liquidation. Notwithstanding the foregoing, if the value of all
of a Participant's Accounts exceeds $5,000, no distribution will be
made without his/her written consent before he/she attains Normal
Retirement Age or dies.
(d) The Trustee and the Committee shall continue to function as such
for such period of time as may be necessary for the winding up of this
Plan and for the making of distributions in accordance with the
provisions of this Plan.
<PAGE>
11.5 Partial Termination.
(a) In the event of a partial termination of the Plan within the
meaning of Code Section 411(d)(3), the interests of affected
Participants in the Trust Fund, as of the date of the partial
termination, shall become fully vested as of that date.
(b) That portion of the assets of the Plan affected by the partial
termination shall be used exclusively for the benefit of the affected
Participants and their Beneficiaries, and no part thereof shall
otherwise be applied, except as provided in Section 5.6.
(c) With respect to Plan assets and Participants affected by a partial
termination, the Committee and the Trustee shall follow the same
procedures and take the same actions prescribed in this Article XI in
the case of a total termination of the Plan.
<PAGE>
ARTICLE XII
APPLICATION FOR BENEFITS
12.1 Application for Benefits.
(a) The Committee may require any person claiming benefits under the
Plan to submit an application therefore, together with such other
documents and information as the Committee may require.
(b) In the case of any person suffering from a disability which
prevents such claimant from making personal application for benefits,
the Committee may, in its discretion, permit application to be made by
another person acting on his/her behalf.
(c) The Committee, or its representative, shall be permitted to
consider certain requests or inquiries by or on behalf of a Participant
(or Beneficiary if applicable) as a claim for benefits. If the
Committee considers such a request or inquiry, such Participant (or
Beneficiary if applicable) shall be notified by the Committee or its
representative that such request or inquiry is considered a claim for
benefits.
12.2 Action on Application.
(a) Within ninety (90) days following receipt of an application
described in Section 12.1 and all necessary documents and information,
the Committee's authorized representative reviewing such claim shall
furnish the claimant with written notice of the decision rendered with
respect to such application.
(b) Should special circumstances require an extension of time for
processing the claim, written notice of the extension shall be
furnished to the claimant prior to the expiration of the initial ninety
(90) day period. The notice shall indicate the special circumstances
requiring an extension of time and the date by which a final decision
is expected to be rendered. In no event shall the period of the
extension exceed ninety (90) days from the end of the initial ninety
(90) day period.
(c) In the case of a denial of the claimant's application, such written
notice shall set forth:
(i) The specific reasons for the denial;
(ii) References to the Plan provisions upon which the denial
is based;
<PAGE>
(iii) A description of any additional information or material
necessary for perfection of the application (together with an
explanation why such material or information is necessary);and
(iv) An explanation of the Plan's claim review procedure.
(d) A claimant who wishes to contest the denial of his/her application
for benefits or to contest the amount of benefits payable shall follow
the administrative procedures for an appeal of benefits as set forth in
Section 12.3 below, and shall exhaust such administrative procedures
prior to seeking any other form of relief.
(e) The decision on review shall be in writing and shall include
specific reasons for the decisions, written in a manner calculated to
be understood by the claimant with specific reference to the pertinent
Plan provisions upon which the decision is based.
12.3 Appeals.
(a) In order to appeal the decision rendered with respect to his/her
application for benefits or with respect to the amount of his/her
benefits, the claimant must follow the appeal procedures set forth in
this Section 12.3.
(b) The appeal must be made, in writing, within sixty-five (65) days
after the date of notice of the decision with respect to the
application, or if the application has neither been approved nor denied
within the applicable period provided in Section 12.2 above, then the
appeal must be made within sixty-five (65) days after the expiration of
such period.
(c) The claimant may request that his/her application be given full and
fair review by the Committee. The claimant may review all pertinent
documents and submit issues and comments in writing in connection with
the appeal.
(d) The decision of the Committee shall be made promptly, and not later
than sixty (60) days after the Committee's receipt of a request for
review, unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as
possible, but not later than one hundred twenty (120) days after
receipt of a request for review.
(e) The decision on review shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant with specific reference to the pertinent
Plan provisions upon which the decision is based.
<PAGE>
ARTICLE XIII
LIMITATIONS ON CONTRIBUTIONS
13.1 General Rule.
(a) Notwithstanding anything to the contrary contained in this Plan,
the total Annual Additions under this Plan to a Participant's Accounts
for any Plan Year shall not exceed the lesser of:
(i) Thirty Thousand Dollars ($30,000) (or if greater,
one-fourth of the dollar limit in effect under Section
415(b)(1)(A) or such other amount as may be permitted pursuant
to regulations issued under Section 415(d)(1) of the Code); or
(ii) Twenty-five percent (25%) of the Participant's total
Compensation (determined in accordance with Section 13.1(d)
below) from the Company and any Affiliated Companies for the
year.
(b) For purposes of this Article XIII, the Company has elected a
"Limitation Year" corresponding to the Plan Year.
(c) For purposes of this Article XIII, "Compensation" shall mean a
Participant's earned income, wages, salaries, fees for professional
service and other amounts received for personal services actually
rendered in the course of employment with the Company including, but
not limited to, commissions paid to sales personnel, compensation for
services on the basis of a percentage of profits, commissions on
insurance premiums, tips, and bonuses, and excluding the following:
(i) Any distributions from a plan of deferred compensation
whether or not includable in the gross income of the Employee
when distributed;
(ii) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by
an Employee becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
<PAGE>
(iv) Other amounts which receive special tax benefits or
contributions made by the Company (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract as defined under Code Section 403(b) (whether or not
the contributions are excludable from the gross income of the
Employee).
Compensation for any limitation year is the compensation actually paid
or includable in gross income during such year. In the case of a
Participant who is on a Disability Leave of Absence, Compensation means
the amount of deemed Compensation determined pursuant to Section
6.3(c)(iii). Notwithstanding the foregoing, for all Plan Years
beginning on or after January 1, 1989, Compensation for any limitation
year shall only include so much of any Participant's Compensation as
does not exceed $200,000 and for Plan Years beginning after December
31, 1993, Compensation for any limitation year shall include only so
much of any Participant's Compensation as does not exceed $150,000 (or
such amount as the Secretary of the Treasury shall adjust at the same
time and in the same manner as under Code Section 415(d)).
(d) For Limitation Years beginning after December 31, 1986, the
limitations contained in Section 13.1(a)(ii) shall not apply to amounts
treated as Annual Additions by reason of Section 2.5(d).
13.2 Other Defined Contribution Plans.
If the Company or an Affiliated Company is contributing to any other
defined contribution plan (as defined in Section 414(i) of the Code) for its
Employees, some or all of whom may be Participants in this Plan, then each
Participant's Annual Additions in the other plan shall be aggregated with the
Participant's Annual Additions under this Plan for the purposes of applying the
limitations of Section 13.1.
13.3 Defined Benefit Plans.
If a Participant of this Plan is or has been a Participant of a defined
benefit plan (as defined in Section 414(j) of the Code) to which contributions
are made by the Company or an Affiliated Company, then in addition to the
limitation contained in Section 13.1 of this Plan, the "Combined Plan Fraction"
shall not exceed 1.0.
(a) "Combined Plan Fraction" means the sum of the Defined Contribution
Plan Fraction and the Defined Benefit Plan Fraction.
(b) "Defined Contribution Plan Fraction" means a fraction determined in
accordance with the provisions of Code Section 415(e).
<PAGE>
(c) "Defined Benefit Plan Fraction" means a fraction determined in
accordance with the provisions of Code Section 415(e).
(d) Notwithstanding the above, if a Participant was a participant as of
the first day of the first limitation year beginning after December 31,
1986 in one or more defined benefit plans maintained by the Company
which were in existence on May 6, 1986, and such Participant's current
accrued benefit as of the end of the 1986 limitation year exceeds the
dollar limitations of Code Section 415 as effective January 1, 1987,
such Participant's dollar limitation for purposes of Code Section 415
is the Participant's accrued benefit as of the end of the 1986
limitation year provided the plan met the Code Section 415 requirements
for all limitation years beginning prior to January 1, 1987.
(e) If the accrued benefit of any Participant in a defined benefit plan
exceeds the dollar limitations of Code Section 415 as effective January
1, 1987 (including the protected current accrued benefit), the accrued
benefit shall be reduced as of the first day of the first limitation
year beginning after December 31, 1986 to the level permitted by Code
Section 415 as effective January 1, 1987.
Notwithstanding the foregoing, this section shall not apply to Plan Years
beginning on or after January 1, 2000.
13.4 Adjustments for Excess Annual Additions.
In general, the amount of Company Contributions for any Plan Year under
this Plan and any other defined contribution plans (as defined in Code Section
414(i)) maintained by the Company or an Affiliated Company will be determined so
as to avoid Annual Additions in excess of the limitations set forth in Sections
13.1 through 13.3. However, if as a result of an administrative error in
calculating those Company Contributions, the Annual Additions to a Participant's
Accounts under this Plan (after giving effect to the maximum permissible
adjustments under the other plans) would exceed the applicable limitations
described in Sections 13.1 through 13.3, the excess amount shall be subject to
the following rules:
(a) First, if the Participant had made any Taxed Contributions to the
Plan during the Plan Year (taking into account any after-tax
contributions to any other defined contribution plan that is maintained
by the Company or an Affiliated Company which would be aggregated with
this Plan under Section 13.2) with respect to which no Company Match on
Contributions are deemed to be allocated under Section 6.3(b), these
contributions shall be returned to the Participant to the extent of any
excess Annual Additions;
(b) Next, if the Participant had made any Taxed Contributions (taking
into account any after-tax contributions to any other defined
<PAGE>
contribution plan that is maintained by the Company or an Affiliated
Company which would be aggregated with this Plan under Section 13.2)
with respect to which Company Match on Contributions are deemed to be
allocated for such Plan Year, the portion of such Taxed Contributions
plus the Company Match on Contributions deemed allocated thereto which
constitute excess Annual Additions shall be treated as follows:
(i) Such Taxed Contributions shall be returned to the
Participant; and
(ii) Such Company Match On Contributions shall be allocated as
provided in Paragraph (f).
(c) Next, if the Participant made any Tax Deferred Contributions to the
Plan during the Plan Year with respect to which no Company Match On
Contributions are deemed to be allocated for such Plan Year, the
portion of such Tax Deferred Contributions which constitutes excess
Annual Additions shall be applied to reduce future Company
Contributions. However, the Company shall be obligated to compensate
the Participant promptly in the amount of the annual additions to
reduce future Company Contributions, the Plan may refund such excess
Annual Additions to the applicable participants with any earnings
thereon.
(d) Next, if the Participant made any Tax Deferred Contributions to the
Plan during the Plan Year with respect to which Company Match on
Contributions are deemed to be allocated for such Plan Year, the
portion of such Tax Deferred Contributions plus the Company Match On
Contributions deemed allocated thereto which constitute excess Annual
Additions shall be treated as follows:
(i) Such Tax Deferred Contributions shall be governed under
the rules of Paragraph (c); and
(ii) Such Company Match On Contributions shall be allocated as
provided in Paragraph (f).
(e) For purposes of the application of the ordering rules of this
Section 13.4 only, Company Match On Contributions under Section 6.3(b)
for any Plan Year shall be deemed allocated first to the Sharing
Contributions of Participants which constitute Tax Deferred
Contributions, then, to the extent such Tax Deferred Contributions
constitute less than 6% of such Participant's Compensation, to the
remaining portion, if any, of such Participant's Sharing Contributions
which constitute Taxed Contributions.
(f) Finally, if excess Annual Additions remain, Company Contributions
which give rise to the excess Annual Additions under this Plan (other
than Tax Deferred Contributions) shall be reallocated, to the extent
possible, to the Accounts of the Participants who do not have excess
<PAGE>
Annual Additions in accordance with the allocation formula applicable
to Company Contributions provided under Section 6.3. After each
Participant's Accounts have been credited with a sum equaling his/her
maximum Annual Addition (determined under the foregoing provisions of
Section 13.1 through 13.3), the residue of the foregoing excess amount,
if any, shall be held in a Suspense Account.
(g) Any amounts held in the Suspense Account described in Paragraph (f)
shall be allocated to the Accounts of Participants as of the next
succeeding Anniversary Date in accordance with the allocation formula
provided in Section 6.3 on a first-in, first-out basis. The value of
the Company Stock for purposes of this allocation shall be determined
by applying the rules of Section 5.5 on the date of the allocation. The
Suspense Account shall be exhausted before any Company Contributions
shall be allocated to the Accounts of Participants subsequent to the
date upon which the residue excess described in Section 13.4(f) is
credited to the Suspense Account.
(h) The Trustee shall segregate any amounts held in the Suspense
Account from other assets of the Plan and may place the cash portions
thereof in an interest-bearing account in any bank or savings and loan
institution, including the Trustee's own banking department (if
applicable). Any amounts held in the Suspense Account shall not
participate in any allocation of forfeitures, or net income or loss of
other assets of the Trust Fund under Article VI.
(i) In the event the Plan shall terminate at a time when all amounts in
the Suspense Account have not been allocated to the Accounts of the
Participants, the Suspense Account amounts shall be applied as follows:
(i) The amount in the Suspense Account shall first be
allocated, as of the Plan termination date, to Participants on
the same basis as specified in Section 13.4(g) above, with the
allocation to be made to the maximum extent permissible under
the Annual Additions limitations of this Article XIII, and
(ii) If after those allocations have been made, any further
residue funds remain in the Suspense Account, the residue
shall revert to the Company in accordance with the applicable
provisions of the Code.
(j) The amended provisions of Paragraphs (a), (b), (c), (d) and (e)
shall be effective as of the Effective Date.
(k) Plans in existence on May 6, 1986 shall not be disqualified for any
limitation year beginning before January 1, 1987 only because such plan
provides for Annual Additions or annual benefits which exceed the
limits of Code Section 415 which were effective January 1, 1987,
<PAGE>
provided the plans complied with Code Section 415 as then in effect for
all limitation years beginning before January 1, 1987.
13.5 Affiliated Company.
For purposes of this Article XIII, the status of an entity as an
Affiliated Company shall be determined by reference to the percentage tests set
forth in Code Section 415(h).
<PAGE>
ARTICLE XIV
RESTRICTION ON ALIENATION
14.1 General Restrictions Against Alienation.
(a) The interest of any Participant or Beneficiary in the income,
benefits, payments, claims or rights hereunder, or in the Trust Fund
shall not in any event be subject to sale, assignment, hypothecation,
or transfer. Each Participant and Beneficiary is prohibited from
anticipating, encumbering, assigning, or in any way alienating his/her
interest under the Trust Fund, and is without power to do so, except as
may otherwise be provided for in this Article XIV. The interest of any
Participant or Beneficiary shall not be liable or subject to his/her
debts, liabilities, or obligations, now contracted, or which may be
subsequently contracted.
(b) In the event any person attempts to take any action contrary to
this Article XIV, that action shall be void and the Company, the
Committee, the Trustees and all Participants and their Beneficiaries,
may disregard that action and are not in any manner bound thereby, and
they, and each of them separately, shall suffer no liability for any
disregard of that action, and shall be reimbursed on demand out of the
Trust Fund for the amount of any loss, cost or expense incurred as a
result of disregarding or of acting in disregard of that action.
(c) The preceding provisions of this Section 14.1 shall be interpreted
and applied by the Committee in accordance with the requirements of
Code Section 401(a)(13) and ERISA Section 206(d) as construed and
interpreted by authoritative judicial and administrative rulings and
regulations.
14.2 Qualified Domestic Relations Orders.
The rules set forth in Section 14.1 above shall not apply with respect
to a "Qualified Domestic Relations Order" described below.
(a) A "Qualified Domestic Relation Order" is a judgment, decree, or
order (including approval of a property settlement agreement) that --
(i) Creates or recognizes the existence of an Alternate
Payee's right to, or assigns to an Alternate Payee the right
to, receive all or a portion of the benefits payable with
respect to a Participant,
<PAGE>
(ii) Relates to the provisions of child support, alimony
payments, or marital property rights to a spouse, child or
other dependent of a Participant,
(iii) Is made pursuant to a State domestic relations law
(including a community property law), and
(iv) Clearly specifies:
(A) The name and last known mailing address (if any)
of the Participant and the name and mailing address
of each Alternate Payee covered by the order;
(B) The amount or percentage of Participant's
benefits to be paid to each Alternate Payee, or the
manner in which the amount or percentage is to be
determined,
(C) The number of payments or period to which the
order applies, and
(D) Each plan to which the order applies.
For purposes of this Section 14.2, the term "Alternate Payee" means any
spouse, former spouse, child or other dependent of a Participant who is
recognized by a domestic relations order as having a right to receive
all, or a portion of, the benefits payable with respect to the
Participant. Both the Participant and an Alternate Payee may designate
a representative for the receipt of copies of notices with respect to
an order.
(b) A domestic relations order is not a Qualified Domestic Relations
Order if it requires --
(i) The Plan to provide any type or form of benefit, or any
option, not otherwise provided under the Plan,
(ii) The Plan to provide increased benefits, (determined on
the basis of actuarial value), or
(iii) The payment of benefits to an Alternate Payee that are
required to be paid to another Alternate Payee under a
previous Qualified Domestic Relations Order.
(c) A domestic relations order shall not be considered to fail to
satisfy the requirements of Paragraph (b)(i) above with respect to any
<PAGE>
payment made before a Participant has separated from service solely
because the order requires that payment of benefits be made to an
Alternate Payee --
(i) On or after the date on which the Plan Administrator
notifies the Participant and each Alternate Payee that the
order is a Qualified Domestic Relations Order,
(ii) As if the Participant had retired on the date on which
such payment is to begin under the order (based on the value
of the Participant's Account balances at that time), or
(iii) In any form in which the benefits may be paid under the
Plan to the Participant (other than in the form of a joint and
survivor annuity with respect to the Alternate Payee and his
or her subsequent spouse).
(d) In the case of any domestic relations order received by the
Plan --
(i) The Committee or its delegate shall promptly notify the
Participant and any Alternate Payee of the receipt of the
order and the Plan's procedures as set forth in this Section
14.2 for determining the qualified status of domestic
relations orders, and
(ii) Within a reasonable period after the receipt of the
order, the Committee or its delegate shall determine whether
the order is a Qualified Domestic Relations Order and shall
notify the Participant and each Alternate Payee and any
designated representative of the determination. The Committee
or its delegate may refer such determination to counsel for
the Plan for an opinion on such issue. The Committee or its
delegate shall notify the Participant, each Alternate Payee
and any designated representatives of the determination on the
qualified status of the order, and include with such
notification a copy of any legal opinion rendered on the
question. If the order is determined to be a Qualified
Domestic Relations Order, the terms and directions as to
payment and entitlement contained in the order will be
promptly communicated to each payee and any designated
representative.
(e) To the extent provided in any Qualified Domestic Relations Order,
the former spouse of the Participant shall be treated as a surviving
spouse of the Participant for purposes of applying the rules of Article
XVII (relating to minimum survivor annuity requirements) and any
current spouse of the Participant shall not be treated as a spouse of
the Participant for such purposes.
(f) The Committee or its delegate shall, in determining the qualified
status of domestic relations orders and administering distributions
under Qualified Domestic Relations orders observe the following:
<PAGE>
(i) During any period in which the issue of whether a domestic
relations order is a Qualified Domestic Relations order is
being determined (by the Committee or its delegate, by a court
of competent jurisdiction, or otherwise), the Committee shall
segregate in a separate account in the Plan (or in an escrow
account) the amounts which would have been payable to the
Alternate Payee during the period if the order had been
determined to be a Qualified Domestic Relations Order.
(ii) If within the "Eighteen Month Period" (as defined below)
the order (or modification thereof) is determined to be a
Qualified Domestic Relations Order, the Committee or its
delegate shall pay the segregated amounts (adjusted for
investment experience) to the person or persons entitled
thereto.
(iii) If within the "Eighteen Month Period" --
(A) It is determined that the order is not a Qualified
Domestic Relations Order, or
(B) The issue as to whether Qualified Domestic Relations
Order is not resolved,
then the Plan Administrator shall pay the segregated amounts
(adjusted for investment experience) to the person or persons
who would have been entitled to the amounts if there had been
no order, including restoration of such amounts to the
Account(s) of the Participant (assuming such benefits were
otherwise payable). If the order is determined not to be a
Qualified Domestic Relations Order within the 18-month period,
the Committee or its delegate may delay payment until the
expiration of the 18-month period if the Committee or its
delegate receives notice that the parties are attempting to
rectify any deficiencies in the order.
(iv) Any determination that an order is a Qualified Domestic
Relations Order that is made after the close of the Eighteen
Month Period shall be applied prospectively only. For the
purposes of this Paragraph (f), the "Eighteen Month Period"
shall mean the eighteen month period beginning on the date on
which the first payment would be required to be made under the
domestic relations order.
(g) Unless directed otherwise by a court order, upon receipt of an
order, a subpoena or similar court order requesting information
regarding a Participant's benefits under the Plan (but which does not
purport actually to order or direct payment) in connection with a
domestic relations proceeding involving the Participant, the committee
shall restrain 50% (or such other amount, if any, specified in the
<PAGE>
order) of the Participant's account balance under the Plan to prevent
loans, withdrawals or distributions. Such restraint shall remain in
place until the earliest of the following:
(i) A division of the account is made pursuant to an order
entered in the proceeding which is determined to be a
Qualified Domestic Relations Order;
(ii) Receipt by the Committee of an order entered in the
proceeding purporting to divide the marital or community
estate and making no assignment of an interest in the Plan to
an alternate payee;
(iii) Receipt by the Committee of a written waiver of the
restraint by the party (e.g., Participant's spouse) to the
domestic relations proceeding who is adverse to the
Participant; or
(iv) The lapse of 18 months following imposition of the
restraint; provided that the Committee is not aware of efforts
to enter an order which would assign the Participant's
benefits under the Plan.
14.3 Authorized Participant Loans.
The Committee may authorize loans from the Trust Fund to Participants
at such times and upon such conditions as determined pursuant to procedures
developed by the Committee in writing. These procedures shall be designed to
ensure that the loans satisfy the requirements of Code Sections 4975(d)(1) and
72(p), and the provisions of any other statutes that are, or may become
applicable. These procedures shall provide that:
(a) The loans shall be available to all Participants who are Eligible
Employees of the Company and who have attained at least age eighteen
(18) and such other individuals as determined by the Committee
consistent with or as required by applicable law, on a reasonably
equivalent basis; provided that the Committee may, in its discretion,
establish a minimum loan amount, applicable to all Participants
uniformly, not to exceed $1,000.
(b) The loans are not made available to Participants who are officers
or shareholders of the Company or who are highly compensated Employees
in amounts greater than the amounts made available to other
Participants.
(c) The rate of interest charged for a loan approved in a particular
month shall be:
(i) The quoted rate of one-year U.S. Treasury Securities for
any loan with a one-year repayment period;
<PAGE>
(ii) The quoted rate for five-year U.S. Treasury Securities
for any loan with a two to five year repayment period; and
(iii) The quoted rate for ten-year U.S. Treasury Securities
for any loan with a six to ten year repayment period.
The quoted rate to be applied for any particular month shall be the
rate for the applicable U.S. Treasury Securities as of the last
business day of the preceding month, rounded to the nearest 1/4%.
Notwithstanding the foregoing, the Committee shall establish any other
interest rate it deems appropriate at any time or from time to time in
order to comply with applicable statutes or regulations.
(d) The security for the loan shall be the balance in the Participant's
Accounts. Notwithstanding the foregoing, not more than one-half of the
vested amount of a Participant's Accounts may be used as security for
any loan made hereunder.
(e) The amount of the loan, including principal and interest, shall be
amortized in equal monthly installments over a period not exceeding
five (5) years. The preceding sentence shall not apply to any loan used
to acquire any dwelling unit which within a reasonable time is to be
used (determined at the time the loan is made) as a principal residence
of the Participant. Any such loan shall be repaid in monthly
installments over a period not exceeding 10 years. Payments for all
loans shall be made by means of payroll deductions during the time in
which the Participant is employed by the Company.
(f) The Participant who receives the loan must pay the administrative
costs associated with the origination, servicing, and other incidental
expenses associated with the loan not so paid by the Company or the
Trust.
(g) The funding of the loan shall be disbursed from the Accounts
enumerated in Section 14.3(g)(iii) hereof in the order set forth
therein with no amount to be disbursed from an Account until all
amounts in the next previously enumerated Account have been disbursed.
The amount of any loan to a Participant, when added to the outstanding
balance of any of his or her previous loans from the Plan, and, when
added to the outstanding balances of any loans from any other plans
maintained by the Company or any Affiliated Companies, shall not exceed
the lesser of:
(i) Fifty Thousand Dollars ($50,000), reduced by the excess
(if any) of:
(A) the highest outstanding balance of loans from the
Plan during the one-year period ending on the day
before the date on which such loan is made, over
<PAGE>
(B) the outstanding balance of loans from the Plan on
the date on which such loan is made;
(ii) One-half (1/2)of the Participant's vested interest in his
or her Accounts; or
(iii) The sum of the balances of a Participant's Taxed
Contributions Account, Prior Plans Account, Company Match On
Contributions Account, Company Contribution on Pay (Fully
Vested) Account, Rollover Account, and Tax Deferred
Contributions Account.
(h) If, for any reason, repayment of any loan granted to a Participant
pursuant to this Section 14.3 can no longer be made by means of payroll
deduction, including but not limited to separation from service, and
such Participant does not, immediately upon the request of Plan
administrators, submit payment for the outstanding balance of such
loan, the Plan administrator shall permit such Participant to continue
voluntarily to make regularly scheduled loan payments other than by
payroll deduction. If such Participant does not make all such payments
as scheduled, the loan shall be considered in default, with the
outstanding balance of the loan immediately due and payable. Upon such
default, the Participant's interest in his or her Accounts, as security
for such loan, shall be reduced by the amount of such outstanding
balance and such reduction shall be treated as a distribution under
this Plan. Notwithstanding the foregoing, any amounts in the
Participant's Tax Deferred Contributions Account shall not be reduced
in satisfaction of the outstanding loan balance unless or until such
Participant has separated from service or unless such Participant
qualifies for a Hardship distribution pursuant to Section 8.1(b).
(i) A loan shall be considered made on the date specified in Section
6.4(e)(iii) hereof.
(j) If a Participant's Accounts are subject to the Provisions of
Article XVII of this Plan, the spousal consent provisions of Section
17.7 must be met before a loan may be made to the Participant.
(k) At no time shall a Participant be permitted to have more than two
(2) loans outstanding with respect to his Accounts under this Plan.
<PAGE>
14.4 Group Insurance Payments Through December 31, 1992.
(a) Notwithstanding anything in the Plan to the contrary (including the
provisions of Section 14.1 above), upon receipt of written
authorization from a Participant or Beneficiary, as applicable, who
continues to participate in the Company's group insurance plan for
retirees, the Committee may make periodic distributions from the
individual's Account to the Company through the period ending December
31, 1992, in payment of the individual's cost of participation in such
plan.
(b) The Committee shall prescribe such rules and procedures as it deems
necessary or appropriate for purposes of implementing the provisions of
this Section 14.4; provided, however, that no distributions shall be
made to the Company pursuant to paragraph (a) after December 31, 1992.
<PAGE>
ARTICLE XV
SPECIAL TOP-HEAVY RULES
15.1 Applicability.
(a) Notwithstanding any provision in this Plan to the contrary, the
provisions of this Article XV shall apply in the case of any Plan Year
in which the Plan is determined to be a Top-Heavy Plan under the rules
of Section 15.3.
(b) Except as is expressly provided to the contrary, the rules of this
Article XV, shall be applied after the application of the Affiliated
Company rules of Section 2.3.
15.2 Definitions.
(a) For purposes of this Article XV, the term "Key Employee" shall mean
any Employee who, at any time during the Plan Year or any of the four
(4) preceding Plan Years, is or was --
(i) An officer of the Company having an annual compensation
from the Company greater than fifty percent (50%) of the
amount in effect under Section 415(b)(1)(A) of the Code for
the applicable Plan Year. However, no more than fifty (50)
Employees (or, if lesser, the greater of three (3) or ten
percent (10%) of the Employees) shall be treated as officers;
(ii) One of the ten (10) employees having annual compensation
from the Company of more than the limitation in effect under
Code Section 415(c)(1)(A) and owning (or considered as owning
within the meaning of Code Section 318) the largest interests
in the Company. For this purpose, if two (2) Employees have
the same interest in the Company, the employees having greater
annual compensation from the Company shall be treated as
having a larger interest;
(iii) A Five Percent Owner of the Company; or
(iv) A One Percent Owner of the Company having an annual
compensation from the Company of more than one hundred fifty
thousand dollars ($150,000.00).
(b) For purposes of this Section 15.2, the term "Five Percent Owner"
means any person who owns (or is considered as owning within the
<PAGE>
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Company or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Company. The rules of Subsections (b), (c), and (m) of Code Section 414
shall not apply for purposes of applying these ownership rules.
(c) For purposes of this Section 15.2, the term "One Percent Owner"
means any person who would be described in Paragraph (b) if "one
percent (1%)" were substituted for "five percent (5%)" each place where
it appears therein.
(d) For purposes of this Section 15.2, the rules of Code Section
318(a)(2)(C) shall be applied by substituting "five percent (5%)" for
"fifty percent (50%)."
(e) For purposes of this Article XV, the term "Non-Key Employee" shall
mean any Employee who is not a Key Employee.
(f) For purposes of this Article XV, the terms "Key Employee" and
"Non-Key Employee" include their Beneficiaries.
15.3 Top-Heavy Status.
(a) The term "Top-Heavy Plan" means, with respect to any Plan
Year --
(i) Any defined benefit plan if, as of the Determination Date,
the present value of the cumulative accrued benefits under the
Plan for Key Employees exceeds sixty percent (60%) of the
present value of the cumulative accrued benefits under the
plan for all Employees, and
(ii) Any defined contribution plan, if, as of the
Determination Date, the aggregate of the account balances of
Key Employees under the Plan exceeds sixty percent (60%) of
the present value of the aggregate of the account balance of
all Employees under the plan.
For purposes of this Paragraph (a), the term "Determination Date"
means, with respect to any plan year, the last day of the preceding
plan year. In the case of the first plan year of any plan, the term
"Determination Date" shall mean the last day of that plan year.
(b) Each plan maintained by the Company required to be included in the
Aggregation Group shall be treated as a Top-Heavy Plan if the
Aggregation Group is a Top-Heavy Group.
(i) The term "Aggregation Group" means --
<PAGE>
(A) Each Plan of the Company in which a Key Employee is
a Participant, and
(B) Each other plan of the Company which enables any plan
described in Subdivision (A) to meet the requirements of
Code Sections 401(a)(4) or 410.
Also, any plan not required to be included in an Aggregation Group
under the preceding rules may be treated as being part of such a group
if the group would continue to meet the requirements of Code Sections
401(a)(4) and 410 with the plan being taken into account.
(ii) For purposes of determining --
(A) The present value of the cumulative accrued benefit
of any Employee, or
(B) The amount of the account balance of any Employee,
such present value or amount shall be increased by the
aggregate distributions made with respect to the Employee
under the plan during the five (5) year period ending on
the Determination Date. The preceding shall also apply to
distributions under a terminated plan which, if it had
not been terminated, would have required to be included
in any Aggregation Group. Also, any rollover contribution
or similar transfer initiated by the Employee and made
after December 31, 1983 to a plan shall not be taken into
account with respect to the transferee plan for purposes
of determining whether such plan is a Top-Heavy Plan (or
whether any Aggregation Group which includes such plan
is a Top-Heavy Group).
(c) If any individual is a Non-Key Employee with respect to any plan
for any plan year, but the individual was a Key Employee with respect
to the plan for any prior plan year, any accrued benefit for the
individual (and the account balance of the individual) shall not be
taken into account for purposes of this Section 15.3.
(d) If any individual has not performed services for the Company at any
time during the five (5) year period ending on the Determination Date,
any accrued benefit for such individual (and the account of the
individual) shall not be taken into account for purposes of this
Section 15.3 even though such individual may have received payments
from the Company after separation from service.
(e) In applying the foregoing provisions of this Section, the accrued
benefit of a Non-Key Employee shall be determined (i) under the method,
if any, which is used for accrual purposes under all plans of the
<PAGE>
Company and Affiliated Companies, or (ii) if there is no such uniform
method, as if such benefit accrued not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C).
15.4 Contributions.
For each Plan Year in which the Plan is Top-Heavy, the minimum
contributions for that year shall be determined in accordance with the rules of
this Section 15.4.
(a) Except as provided below, the minimum contribution for each Non-Key
Employee shall be not less than three percent (3%) of his Compensation.
For this purpose, the individual's Compensation shall be determined in
accordance with the rules of Code Section 415.
(b) Subject to the following rules of this Paragraph (b), the
percentage set forth in Paragraph (a) above shall not be required to
exceed the percentage at which contributions (including amounts
deferred by an individual under a cash or deferred arrangement under
Section 401(k) of the Code) are made (or are required to be made) under
the Plan for the year for the Key Employee for whom the percentage is
the highest for the year. This determination shall be made by dividing
the contributions for each Key Employee by so much of his total
compensation for the year as does not exceed two hundred thousand
dollars ($200,000.00) for Plan Years beginning prior to January 1,
1994, or $150,000 for Plan Years beginning on or after January 1, 1994.
For any year in which the Plan is Top Heavy, each Non-Key Employee will
receive the minimum contribution if the Non-Key Employee has not
separated from service at the end of the Plan Year, regardless of
whether the Non-Key Employee has less than 1000 Hours of Service (or
the equivalent) and regardless of the Non-Key Employee's level of
Compensation. For purposes of this Paragraph (b), all defined
contribution plans required to be included in an Aggregation Group
shall be treated as one plan. However, the rules of this Paragraph (b)
shall not apply to any plan required to be included in an Aggregation
Group if the Plan enables a defined benefit plan to meet the
requirements of Code Sections 401(a)(4) or 410.
(c) The requirements of this Section 15.4 must be satisfied without
taking into account contributions under Chapters 2 or 21 of the Code,
Title II of the Social Security Act, or any other Federal or State law.
(d) In the event a Participant is covered by both a defined
contribution and a defined benefit plan maintained by the Company, both
of which are determined to be Top-Heavy, the Company may elect, in its
discretion, to satisfy either the defined benefit minimum with
regulations issued under Code Section 416(f).
<PAGE>
(e) In no instance may the Plan take into account an Employee's
compensation in excess of the first two hundred thousand dollars
($200,000) for Plan Years beginning prior to January 1, 1994 or one
hundred fifty thousand dollars ($150,000) for Plan Years beginning on
or after January 1, 1994 (or such greater Section 416(d)(2) of the
Code).
15.5 Maximum Annual Additions.
(a) Except as set forth below, in the case of any Top-Heavy Plan the
definitions of Section 13.4(b) and (c) shall be applied by substituting
"1.0" for "1.25".
(b) The rule set forth in Paragraph (a) above shall not apply if the
requirements of Subparagraphs (i) and (ii) are satisfied.
(i) The requirements of this Subparagraph (i) are satisfied if
the rules of Paragraph (a) above would be satisfied after
substituting "four percent (4%)" for "three percent (3%)"
where it appears therein.
(ii) The requirements of this Subparagraph (ii) are satisfied
if the Plan would not be a "Top-Heavy Plan" if "ninety percent
(90%)" were substituted for "sixty percent (60%)" each place
it appears in Section 15.3(a)(ii).
(c) The rules of Paragraph (a) shall not apply with respect to any
individual as long as there are no --
(i) Company Contributions, forfeitures, or voluntary nonde-
ductible contributions allocated to the individual, or
(ii) Accruals to the individual under a defined benefit plan
maintained by the Company.
(d) In the case where the Plan is subject to the rules of Paragraph (a)
above, the definitions of Section 13.4(b) shall be applied by
substituting "$41,500" for "$51,875."
15.6 Vesting Rules.
In the event that the Plan is determined to be Top-Heavy in accordance
<PAGE>
with the rules of Section 15.3, then the vesting schedule of the Plan set forth
in Section 7.2 must be changed to that below.
Years of Service Unforfeitable Percentage
2 20%
3 40%
4 60%
5 80%
6 100%
15.7 Noneligible Employees.
The rules of this Article XV shall not apply to any Employee included
in a unit of employees covered by an agreement which the Secretary of
Labor finds to be a collective bargaining agreement between employee
representatives and one or more employees if there is evidence that
retirement benefits were the subject of good faith bargaining between
such employee representatives and the employer or employers.
<PAGE>
ARTICLE XVI
PLAN AMENDMENTS
16.1 Amendments.
The Board of Directors or the Committee (to the extent consistent with
its charter as may be in effect from time to time) may at any time, and from
time to time, amend the Plan by an instrument in writing executed in the name of
the company by an officer or officers duly authorized to execute such
instrument, and delivered to the applicable trustee. However, no amendment shall
be made at any time, the effect of which would be:
(a) To cause any assets of the Trust Fund to be used for or diverted
to purposes other than providing benefits to the Participants and
their Beneficiaries, and defraying reasonable expenses of
administering the Plan, except as provided in Section 5.6;
(b) To have the effect, retroactive or otherwise, of reducing,
restricting or depriving, either directly or indirectly, the accrued
benefit provided any Participant prior to the amendment; or
(c) To alter or increase the responsibilities or liabilities of a
Trustee or an Investment Manager without his/her written consent.
Notwithstanding the foregoing, Sections 5.2, 5.5(c), 5.5(d), 5.5(e)
and 6.3 shall not be amended more than once in any six month period,
except as may be required to comply with changes in the Code, ERISA or
the regulations promulgated thereunder.
(d) Any Employee who was a Participant as of the later of the
effective date or adoption date of any amendment to the Plan's vesting
schedule and who completed 3 years of service may elect to have his
nonforfeitable percentage determined under the Plan without regard to
such amendment. Notwithstanding the foregoing, for Plan Years
beginning before January 1, 1989, or with respect to Employees who
fail to complete at least 1 Hour of Service in a Plan Year beginning
after December 31, 1988, 5 shall be substituted for 3 in the foregoing
sentence.
<PAGE>
16.2 Retroactive Amendments.
Notwithstanding any provisions of this Article XVI to the contrary, the
Plan may be amended prospectively or retroactively (as provided in Section
401(b) of the Code) to make the Plan conform to any provision of ERISA, any Code
provisions dealing with tax-qualified employees' trusts, or any regulation under
either.
<PAGE>
ARTICLE XVII
SURVIVOR ANNUITY REQUIREMENTS
17.1 Application of Article.
The provisions of this Article XVII shall apply only to those
Participants with respect to whom the Plan constitutes a transferee of a tax
qualified retirement plan to which the minimum survivor annuity requirements of
Code Section 401 (a)(11) apply and to Participants who also participate in the
[ABS floor plan] . The provisions of this Article XVII shall be effective
January 1, 1985, except as otherwise expressly provided in this Article XVII.
17.2 Definitions.
(a) "Qualified Joint and Survivor Annuity" shall mean an annuity
that commences immediately
(i) For the life of the Participant with a survivor annuity
for the life of the spouse which is not less than fifty
percent (50%) and is not greater than one hundred percent
(100%) of the amount of the annuity which is payable during
the joint lives of the Participant and the spouse, and which
is the actuarial equivalent of a single life annuity for the
life of the Participant, or
(ii) For an unmarried Participant, an annuity for the life of
the Participant unless the Participant elects otherwise during
the Applicable Election Period.
Such term shall also refer to any annuity in a form having the effect
of an annuity described above.
(b) "Qualified Pre-retirement Survivor Annuity" shall mean an annuity
for the life of the surviving spouse the actuarial equivalent of which
is not less than fifty percent (50%) of the Account balance of the
Participant as of the date of his death. Notwithstanding the
foregoing, in the case of a Participant who separates from service
prior to death and dies on or before the date on which the Participant
would have attained the earliest retirement age, shall be calculated
by reference to the actual date of separation from service rather than
the date of death. For purposes of determining the amount of a
Qualified Pre-retirement Survivor Annuity, any security interest held
by the Plan by reason of a loan outstanding to the Participant shall
be taken into account.
<PAGE>
(c) "Earliest Retirement Age" shall mean the earliest date on which,
under the Plan, the Participant could elect to receive retirement
benefits.
(d) "Annuity Starting Date" shall mean (i) the first day of the first
period for which an amount is payable as an annuity, however, the
first day of the first period for which a benefit is to be received by
reason of a Disability shall be treated as the Annuity Starting Date
only if such benefit is not an auxiliary benefit within the meaning of
Code Section 417 (f)(2)(B); or (ii) in the case of a benefit not
payable in the form of an annuity, the first day on which all events
have occurred which entitle the Participant to such benefit.
(e) "Application Election period" shall mean --
(i) In the case of an election to waive the Qualified Joint
and Survivor Annuity, the ninety (90) day period ending on the
Annuity Starting Date, or
(ii) In the case of an election to waive the Qualified
Pre-retirement Survivor Annuity, the period that begins on the
first day of the Plan Year in which the Participant attains
the age thirty-five (35) and ends on the date of the
Participants death.
In the case of a Participant who has separated from service, the period under
Subparagraph (ii) with respect to benefits accrued before the date of separation
shall not begin later than the date of the separation.
17.3 Form of Benefits Provided.
Except as otherwise provided under Sections 17.4 and 17.5 --
(a) In the case of a Participant with a vested interest in the Plan who
retires, the vested portion of his or her Accounts shall be paid in the
form of a Qualified Joint and Survivor Annuity, and
(b) In the case of a Participant with a vested interest who dies before
his or her Annuity Starting Date and who has a surviving spouse, the
vested portion of his or her Accounts shall be paid in the form of a
qualified Pre-retirement Survivor Annuity to such Participant's
surviving spouse.
17.4 Elections With Respect to Survivor Annuities.
(a) At any time during the Applicable Election Period,each participant
may--
<PAGE>
(i) Elect to waive the Qualified Joint and Survivor Annuity or
the Qualified Pre-retirement Survivor Annuity (or both) for
all or any portion of his or her Accounts, and
(ii) Revoke any such election.
(b) An election under Paragraph (a) (i) above shall not take effect
unless --
(i) The spouse of the Participant consents in writing to the
election, such election designates a beneficiary or a form of
benefits (including remaining benefits that a beneficiary may
receive) which may not be changed without spousal consent
(unless the original consent (1) acknowledges the right to
limit consent to a specific beneficiary and (2) expressly
permits designations by the Participant without the
requirement of any further consent by the spouse), and the
spouse's consent acknowledges the effect of the election and
is witnessed by a Plan representative or a notary public; or
(ii) It is established to the satisfaction of a Plan
Representative that the consent required by Subparagraph (i)
above may not be obtained because there is no spouse, because
the spouse cannot be located, or because of such other
circumstances as may be set forth in regulations under Code
Section 417 (a)(2), and
(iii) Any consent (or establishment that the consent of a
spouse may not be obtained) under this Paragraph (b) shall be
effective only with respect to that spouse.
For purposes of this Paragraph (b), "Plan Representative" shall mean
the person or persons designated by the Committee to perform the duties
required specified herein.
(c) Within a reasonable period of time before the Participant's Annuity
Starting Date (and consistent with regulations under Section 417
(a)(3)(A) of the Code) each Participant shall receive a written
explanation of --
(i) The terms and conditions of the Qualified Joint and
Survivor Annuity,
(ii) The Participant's right to make, and the effect of, an
election under Paragraph (a) above to waive the Qualified
Joint and Survivor Annuity form of benefit,
(iii) The rights of the Participant's spouse under Paragraph
(b) above, and
<PAGE>
(iv) The right to make, and the effect of, a revocation of an
election under Paragraph (a) above.
(d) To the extent and in the manner required under applicable
Regulations, each Participant shall be given a written explanation with
respect to the Qualified Pre-retirement Annuity comparable to that
required under Paragraph (c) above. The explanation shall be given to
the Participant within the "applicable period". The "applicable period"
shall mean whichever of the following ends latest; (i) the period
beginning with the first day of the Plan Year in which the Participant
attains age 32 and ending with the close of the Plan Year in which the
Participant attains age 35; (ii) a reasonable period after becoming a
Participant; (iii) a reasonable period after the survivor benefit
applicable to a Participant is no longer subsidized as defined in Code
ss.417(a)(4); (iv) a reasonable period after the survivor benefit
provisions of ss.401(a)(11) become applicable with respect to a
Participant; or (v) a reasonable period after separation of service in
he case of a Participant who incurs a severance prior to attaining age
35. Notwithstanding the above, (i) in the case of Participant who
separates from service prior to attaining age 32, such applicable
period shall be within one year after the date of separation; or (ii)
in the case of an Employee who becomes a Participant after attaining
age 32, such applicable period shall be no later than the end of the
three-year period beginning with the first day of the Plan Year in
which the Employee becomes a Participant. The provisions of the
Paragraph (d) shall be interpreted and carried out in a manner that is
consistent with the regulations issued under Code ss.417(a)(3)(B).
(e) The above provisions of this Section 17.4 shall not apply with
respect to any benefits attributable to a plan if the failure to waive
the Qualified Joint and Survivor Annuity or the Qualified
Pre-retirement Survivor Annuity would not result in a (i) decrease in
any benefit payable with respect to the Participant or (ii) increased
contributions from the Participant.
17.5 Marriage Requirement.
(a) Except as provided in Paragraph (b) below, a Qualified Joint and
Survivor Annuity (or a Qualified Pre-retirement Survivor Annuity) will
not be provided unless the Participant and his/her spouse have been
married throughout the one (1) year period ending on the earlier of (i)
the Participant's Annuity Starting Date, or (ii) the date of the
Participant's death.
(b) If (i) a Participant marries within one (1) year of his/her Annuity
Starting Date, and (ii) the Participant and the Participant's spouse in
such marriage have been married for at least a one (1) year period
ending on or before the date of the Participant's death, the
Participant and such spouse shall be treated as having been married
<PAGE>
throughout the one (1) year period ending on the Participant's Annuity
Starting Date.
17.6 Lump Sum Distributions
(a) Notwithstanding the preceding provisions of this Article XVII, if
the present value of the Participant's benefit (payable in either the
Qualified Joint and Survivor Annuity or in the Qualified Pre-retirement
Survivor Annuity) does not exceed thirty-five hundred dollars ($3,500),
or, for Plan Years beginning after August 5, 1997, five thousand
dollars ($5,000), the benefit shall be paid in a single lump sum.
However, no such lump sum benefit shall be paid after the Participant's
Annuity Starting Date, unless the Participant and the spouse of the
Participant (or where the Participant has died, the surviving spouse)
consents in writing to such distribution in the same manner as required
under Section 17.4.
(b) If (i) the present value of the Participant's benefit exceeds
thirty-five hundred dollars ($3,500), or for Plan Years beginning after
August 5, 1997, five thousand dollars ($5,000) and (ii) the Participant
and the spouse of the Participant (or where the participant has died,
the surviving spouse) consent in writing to the distribution in the
same manner as required under Section 17.4, the benefit may be paid in
a lump sum.
(c) For purposes of this Section 17.6, the present value of a qualified
Joint and Survivor Annuity or a Qualified Pre-retirement Survivor
Annuity shall be determined as of the date of distribution and by using
the interest rate which could be used (as of the date of the
distribution) by the Pension Benefit Guaranty Corporation for purposes
of determining the present value of a lump sum distribution on plan
termination.
17.7 Security for Loans.
If the use of any Participant's Accounts (or any portion
thereof) as security for a loan made pursuant to Section 14.3 meets the
requirements of this Section 17.7, nothing in this Section or any
Section of this Plan intended to comply with Code Section 411(a)(11)
shall prevent any distribution required by failure to comply with the
terms of such loan. The requirements of this section are satisfied if:
(i) the spouse of the Participant (if any) consents in writing
to such use during the 90 day period ending on the date on
which the loan is to be so secured, and
(ii) requirements comparable to the requirements of Section
17.4 (b) are met with respect to such consent.
<PAGE>
The provisions of this Section 17.7 shall apply to all loans made after
August 18, 1985.
17.8 Purchase of Annuity Contract to Provide Benefits.
The Committee shall provide any of the forms of benefits payable under
Section 17.3 by the application of the Participant's Account balances
to the purchase of an annuity or other insurance contract issued by any
insurance company authorized to conduct an insurance business under the
authority of any state government. Any annuity or other insurance
contract purchased by the Trustee and distributed to a Participant or a
spouse to provide benefits under the Plan shall satisfy the applicable
requirements of this Article XVII. It is the intention of the Company
that whenever an annuity or other insurance contract providing benefits
is purchased, the benefits anticipated to be provided under such
contract shall be the actuarial equivalent of the Participant's Account
balances applied to the purchase of such contract. However, the
purchase of such a contract at reasonable annuity purchase rates
prevailing at the time of purchase shall be deemed to be the purchase
of benefits having an actuarial equivalent value of the amount of the
Participant's Account balances applied to purchase such contract. The
purchase of any such contract shall be a full and complete discharge of
the Plan, the Trustee, the Company, and any Committee acting on behalf
of the Plan, with respect to the payment of benefits of the Participant
or his spouse under this Plan.
<PAGE>
ARTICLE XVIII
MISCELLANEOUS
18.1 No Enlargement of Employee Rights.
(a) This Plan is strictly a voluntary undertaking on the part of the
Company and shall not be deemed to constitute a contract between the
Company and any Employee, or to be consideration for, or an inducement
to, or a condition of, the employment of any Employee.
(b) Nothing contained in this plan or the Trust shall be deemed to give
any Employee the right to be retained in the employ of the Company or
to interfere with the right of the Company to discharge or retire any
Employee at any time.
(c) No Employee, nor any other person, shall have any right to or
interest in any portion of the Trust Fund other than as specifically
provided in this Plan.
18.2 Inspection of Records.
No Participant, other than a Participant of the Committee or an
individual authorized by the Committee or the Company, may inspect the records
of the Committee relating to any other Participant.
18.3 Mailing of Payments and Addresses.
(a) All payments under the Plan shall be delivered in person or mailed
to the last address of the Participant (or, in the case of death of the
Participant, to the last address of any other person entitled to such
payments under the terms of the Plan).
(b) Each Participant shall be responsible for furnishing the Committee
with his/her correct current address and the correct current name and
address of his/her Beneficiary or Beneficiaries.
18.4 Notices and Communications.
(a) All applications, notices, designations, elections, and other
directions and correspondence from Participants shall be communicated
in the form and manner prescribed by the Committee.
(b) Each notice, report, remittance, statement, and other communication
directed to Participant or Beneficiary shall be in writing and may be
<PAGE>
delivered in person or by mail. An item shall be deemed to have been
delivered and received by the Participant when it is deposited in the
United States Mail with postage prepaid, addressed to the Participant
or Beneficiary at his/her last address of record with the Committee.
18.5 Governing Law.
All legal questions pertaining to the Plan shall be determined in
accordance with the provisions of ERISA and the laws of the State of Delaware.
18.6 Interpretation.
(a) Article and Section headings are for convenient reference only and
shall not be deemed to be part of the substance of this instrument or
in any way to enlarge or limit the contents of any Article or Section.
(b) Unless the context clearly indicates otherwise, masculine gender
shall include the feminine, and the singular shall include the plural
and the plural the singular.
(c) The provisions of this plan shall in all cases be interpreted in a
manner that is consistent with this Plan satisfying the requirements of
Code Section 401 (a) for qualification as an employees' trust.
18.7 Withholding For Taxes.
Any payments out of the Trust Fund may be subject to withholding for
taxes as may be required by any applicable federal or state law.
18.8 Successors and Assigns.
This Plan and the Trust established hereunder shall insure to the
benefit of, and be binding upon, the parties hereto and their successors and
assigns.
18.9 Counterparts.
This plan document may be executed in any number of identical
counterparts. Each such counterpart shall be deemed a complete original in
itself and may be introduced in evidence or used for any other purpose without
the production of any other counterparts.
<PAGE>
IN WITNESS WHEREOF, in order to record the restatement of this plan,
ALBERTSON'S INC. has caused this instrument to be executed by its duly
authorized officer on the 24th day of September, 1999.
ALBERTSON'S INC.
By: /s/ Gary G. Michael
Gary G. Michael
Title: Chairman of the Board and
Chief Executive Officer
Exhibit 5.1
[ALBERTSON'S INC. LETTERHEAD]
September 24, 1999
Albertson's, Inc.
250 Parkcenter Boulevard
P.O. Box 20
Boise, Idaho 83726
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I am the Executive Vice President and General Counsel of Albertson's,
Inc., a Delaware corporation (the "Company"). The Company is filing with the
Securities and Exchange Commission a Registration Statement on Form S-8 (the
"Registration Statement") covering 5,000,000 shares (the "Shares") of Common
Stock, par value $1.00 per share, of the Company, and an indeterminate amount of
interests issuable pursuant to Albertson's Savings & Retirement Estates (the
"ASRE").
All assumptions and statements of reliance herein have been made
without any independent investigation or verification on my part except to the
extent otherwise expressly stated, and I express no opinion with respect to the
subject matter or accuracy of such assumptions or items relied upon.
In connection with this opinion, I have (i) investigated such questions
of law, (ii) examined originals or certified, conformed or reproduction copies
of such agreements, instruments, documents and records of the Company, such
certificates of public officials and such other documents, and (iii) received
such information from officers and representatives of the Company, as I have
deemed necessary or appropriate for the purposes of this opinion. In all
examinations, I have assumed the legal capacity of all natural persons executing
documents, the genuineness of all signatures, the authenticity of original and
certified documents and the conformity to original or certified copies of all
copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to the opinions expressed herein, I have relied upon,
and assume the accuracy of, representations and warranties contained in
documents and certificates and oral or written statements and other information
of or from representatives of the Company and others and assume compliance on
the part of all parties to the documents with their covenants and agreements
contained therein. Based upon the foregoing and subject to the limitations,
qualifications and assumptions set forth herein, I am of the opinion that the
Shares, when issued or sold, and when delivered in accordance with the
provisions of the ASRE, will be duly authorized, validly issued, fully paid and
non-assessable.
The opinion expressed herein is limited to the General Corporation Law
of the State of Delaware, as currently in effect.
<PAGE>
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, I do not hereby admit that I am
in the category of such persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended.
The opinions expressed herein are solely for your benefit in connection
with the Form S-8 and may not be relied on in any manner or for any purpose by
any other person or entity.
Very truly yours,
ALBERTSON'S, INC.
/s/ Thomas R. Saldin
By: Thomas R. Saldin
Executive Vice President and
General Counsel
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Albertson's, Inc. of our report dated June 23, 1999, appearing in
the Annual Report on Form 11-K of Albertson's Employees' Tax Deferred Savings
Plan for the year ended December 31, 1998, and of our report dated September 17,
1999, appearing in the Current Report on Form 8-K of Albertson's, Inc. and
subsidiaries on the consolidated financial statements for the year ended January
28, 1999, filed with the Securities and Exchange Commission on September 22,
1999.
/s/ Deloitte & Touche LLP
Deloitte & Touch LLP
Boise, Idaho
September 23, 1999
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to Albertson's Savings & Retirement Estates of
our reports (a) dated March 17, 1999 with respect to the consolidated financial
statements of American Stores Company for the year ended January 30, 1999
appearing in the Current Report on Form 8-K of Albertson's, Inc. and
subsidiaries and (b) dated June 23, 1999, with respect to the financial
statements and schedule of the American Stores Retirement Estates included in
its annual Report (Form 11-K) for the year ended December 31, 1998 filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Salt Lake City, Utah
September 17, 1999
